Streamlining Bank Charters: A Call to Action

A group of lawyers has urged U.S. banking authorities to simplify the process for obtaining bank charters, arguing that current bureaucratic hurdles impede competition. Emphasizing the need for innovation, the lawyers call for realistic benchmarks and improved transparency in the application process amid a pro-business climate expected under U.S. President Donald Trump.

Lawyers are calling on U.S. authorities to streamline the process of obtaining bank charters, which they argue is fraught with bureaucratic inefficiencies. The group has written a letter to incoming banking agency leaders, underscoring the need for the industry to modernize as fintech companies become more prominent.

Currently, securing a new bank charter in the U.S. is a complex undertaking, often taking over a year and requiring engagement with multiple agencies. The letter, seen by Reuters, comes amid hopes for regulatory reforms championed by U.S. President Donald Trump, who advocates for reduced red tape in business practices.

Between 2010 and 2023, an average of only five bank charter applications were approved annually, a significant decrease from earlier years. The lawyers encourage more realistic standards for new bank applications, emphasize recognizing the inherent risks of failure, and call for a consistent 120-day review period to foster a more dynamic banking sector.

(With inputs from agencies.)