FDIC approves deposit insurance application for Ohio tech-focused bank

The FDIC board of directors approved a deposit insurance application for Erebor Bank, N.A., clearing a key regulatory step toward the establishment of the newly chartered national bank..Erebor Bank will be headquartered in Columbus, Ohio. Its business model includes providing deposit and lending services to businesses and individuals in the technology, payments, investment and defense sectors, including participants in virtual currency markets.The Office of the Comptroller of the Currency granted preliminary approval for the de novo in mid-October. Erebor is being launched by Palmer Luckey, an entrepreneur credited with revolutionizing the virtual reality space, and prominent venture capitalist Peter Thiel. Erebor is a reference to the name of a mountain in “Lord of the Rings”, that was the main destination for Bilbo and the dwarves. Erebor Bank will be required to have FDIC-compliant protocols for deposit account processing in the event of a bank failure, maintain a minimum 12% tier 1 leverage ratio during its first three years of operations, and ensure access to additional capital through a capital call agreement if it falls below “well capitalized” standards. FDIC approval will expire if Erebor Bank is not established within 12 months, unless the agency grants an extension.