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FDIC Rescinds De Novo Time Period Extension
On Wednesday, April 6, 2016, the Federal Deposit Insurance Corporation (FDIC) rescinded Financial Institution Letter (FIL) 50-2009, Enhanced Supervisory Procedures for Newly Insured FDIC-Supervised Depository Institutions. The FIL, among other measures, extended the de novo period for newly organized, state nonmember institutions from three to seven years for examinations, capital maintenance, and other requirements. It was issued to address an elevated number of newly insured institutions that had either failed or had been identified as problem banks during the financial crisis.
"The entry of new banks has helped to preserve the vitality of the community banking sector over time," FDIC Chairman Martin Gruenberg said at a conference hosted by the FDIC to discuss community banking. "De novo institutions fill important gaps in our local banking markets, providing credit and services to communities that may be overlooked by larger institutions. The FDIC welcomes applications for deposit insurance."