Acting OCC Chief Criticizes FDIC on De Novo Applications

Aug 08, 2017

A 104-year-old thrift in Chicago with no financial problems was abruptly shut down by federal regulators following the suicide of its chief executive

Acting Comptroller of the Currency Keith A. Noreika has called the Federal Deposit Insurance Corp. (FDIC) to task for failing to provide deposit insurance to 14 de novo banks.

According to a Bloomberg report, the Office of the Comptroller of the Currency is tasked with approving bank charters, but the new banks are unable to begin business until the FDIC approves their applications for deposit insurance. In a podcast from last week, Noreika complained that the FDIC’s failure to act on applications for deposit insurance has prevented new banks from opening.

“We, ourselves, since 2001 have chartered 14 institutions, and the FDIC hasn’t acted on a single—any of those 14 applications,” Noreika said. “They just let it hang out there forever, so that the organizers wasted all their money trying to get insurance, and then they gave up. And to me, that’s unconscionable for a regulatory agency.”

The FDIC has approved nine new deposit insurance applications since 2009, and five applications are now pending approval. FDIC spokesperson Barbara Hagenbaugh credited her agency with maintaining fiscal responsibility in its deposit insurance application process.

“The statutory provision mandating that the FDIC approve applications for deposit insurance was established in 1991 in the aftermath of the banking and thrift crisis,” said Hagenbaugh. “A key lesson learned from that experience was that the incentives of chartering agencies often were not the same as those of the FDIC in the protection of the deposit insurance fund.”

About the author

Phil Hall

Link copied

Published

Aug 08, 2017

People On The Move

Christensen, Andrus Added At CE Class Leader

Maximum Acceleration hires mortgage exec. as education director, adds banking manager

Brandon Christensen, a longtime mortgage broker and trainer, has been named Director of Education and National Instructor for Maximum Acceleration LLC, a leading NMLS-approved course provider for mortgage pre-license and continuing education. "Having Brandon join our amaz...

Analysis and Data

Mortgage Rates Surpass 7% For First Time This Year

Freddie Mac reported the 30-year fixed-rate mortgage averaged 7.10%.

Freddie Mac today released its Primary Mortgage Market Survey, revealing the 30-year fixed-rate mortgage (FRM) averaged 7.10%, breaching the 7% threshold for the first time this year. “The 30-year fixed-rate mortgage surpassed 7% for the first time this year, jumping from...