FDIC reduces de novo scrutiny period

The Federal Deposit Insurance Corp., decreased the period of heightened regulatory scrutiny for de novos back to three years..That period was raised to seven years in the wake of the Recession by a 2009 Financial Institution Letter..The FDIC attributed the move to the adoption of regulations and guidance that strengthen institutions' resiliency and risk-management.."The entry of new banks has helped to preserve the vitality of the community banking sector over time," FDIC Chair Martin J. Gruenberg said Wednesday 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.".The FDIC also issued a supplement to its November 2014 guidance related to the Statement of Policy on Applications for Deposit Insurance. The document focuses on the development of business plans..Both the Independent Community Bankers of America and the American Bankers Association have expressed concern about the lack of recent de novo activity and praised the move.