In the United States, the process for obtaining a banking license involves several steps and requires regulatory approval from both federal and state authorities.
- Determine the type of banking license you need: There are different types of banking licenses, including commercial banks, savings banks, and credit unions. The type of license you need will depend on the type of banking activities you plan to engage in and the legal structure of your organization.
- Choose a charter: You can choose to charter your bank as a national bank, a state bank, or a thrift institution. National banks are chartered and regulated by the Office of the Comptroller of the Currency (OCC), a federal agency, while state banks are chartered and regulated by the state in which they are located. Thrift institutions, which include savings banks and savings and loan associations, are chartered and regulated by the Office of Thrift Supervision (OTS), a federal agency.
- Prepare an application: To apply for a banking license, you will need to submit a detailed business plan outlining your proposed banking activities and financial projections. You will also need to provide information about the owners and directors of your bank, including their backgrounds and financial resources.
- Submit the application: You will need to submit your application to the appropriate regulatory agency, which will review your application and conduct an on-site examination of your bank. If your application is approved, you will be granted a charter and authorized to engage in banking activities.
- Obtain insurance: Once you have obtained a charter, you will need to obtain insurance for your bank. This is typically done through the Federal Deposit Insurance Corporation (FDIC), a federal agency that provides insurance for depositors in case of bank failure.
In addition to the federal agencies mentioned above, state regulatory agencies also play a role in the process of obtaining a banking license. These agencies may have additional requirements that you must meet in order to operate a bank in their state.
Additional steps you may need to take in order to obtain a banking license in the United States:
- Comply with federal and state laws: As a bank, you will be subject to a range of federal and state laws that regulate banking activities. These laws cover issues such as consumer protection, financial reporting, and money laundering prevention. It is important to understand and comply with these laws in order to operate your bank legally and avoid potential legal consequences.
- Meet capital requirements: Banks are required to maintain a certain level of capital, or financial resources, in order to operate safely and meet regulatory requirements. The amount of capital you need to maintain will depend on the size and complexity of your bank, as well as the type of banking activities you engage in.
- Obtain necessary approvals: Depending on the location and size of your bank, you may need to obtain approvals from local authorities, such as city or county governments, before you can begin operating.
- Obtain necessary licenses and permits: In addition to a banking license, you may need to obtain other licenses and permits in order to operate your bank, such as a business license or a tax identification number.
- Ongoing supervision and examination: Once you have obtained a banking license and begun operating, you can expect to be subject to ongoing supervision and examination by regulatory agencies. This may include regular on-site examinations to ensure that you are operating in compliance with all applicable laws and regulations.
- Seek legal and financial advice: The process of obtaining a banking license can be complex and may involve a range of legal and financial considerations. It can be helpful to seek the advice of an attorney or financial professional who has experience with the process.
- Be prepared for a lengthy process: Obtaining a banking license can be a lengthy process, and it may take several months or even longer to complete. It is important to be patient and to stay in close communication with regulatory agencies throughout the process.
- Consider the costs: The cost of obtaining a banking license will vary depending on a range of factors, including the type of license you need and the location of your bank. You should be prepared to cover the costs of preparing and submitting your application, as well as any fees associated with regulatory approval and ongoing supervision.
- Keep your business plan up to date: As you work to obtain a banking license, it is important to keep your business plan up to date and to be prepared to make any necessary adjustments. This will help ensure that your bank is well positioned for success once it is up and running.
This page was last updated on January 2, 2023.