The Federal Deposit Insurance Corporation (FDIC) published a policy update speech by Acting Chairman Travis Hill outlining planned work on de novo bank formation, crypto- and blockchain-related activities, insured depository institution (IDI) resolution planning, and regulatory asset thresholds. Hill said updated frequently asked questions will be issued in the coming days to adjust expectations for upcoming IDI Rule resolution plan submissions, alongside separate initiatives including a request for information on industrial loan company applications and analysis of whether key thresholds should be raised or indexed. On new bank formation, Hill linked the long-term decline in bank charters to a sharp fall in de novo activity and said the FDIC is actively considering ways to encourage more entrants while maintaining rigorous statutory approval standards. Options under review include scenarios where certain applicants could be subject to adjusted standards, including up-front and ongoing capital expectations, such as traditional, noncomplex community banks proposed for regions without a community bank headquarters, affecting around 68 million Americans, and a reassessment of how deposit insurance applications are processed for organizers with innovative business models. The agency is also actively working on issuing a request for information to solicit input on issues related to industrial loan company applications. On digital assets, Hill highlighted a Financial Institution Letter that rescinded the FDIC’s prior notification requirement for crypto- and blockchain-related activities and clarified that FDIC-supervised institutions may engage in permissible activities without prior FDIC approval, with institutions expected to manage the associated risks and coordinate with supervisors; additional guidance is being considered on permissibility, banks’ use of public permissionless blockchains, stablecoin-related issues including pass-through deposit insurance, and tokenized deposits. For resolution planning, Hill argued that bridge-bank-centered approaches can be costly due to post-failure deposit runs, citing USD 67 billion of outflows at Silicon Valley Bank’s bridge bank and around USD 35 billion at Signature, and said the forthcoming FAQs will waive several content requirements, deemphasize a prescriptive strategy narrative and remove the expectation that firms build plans around a hypothetical failure scenario, in favor of information that supports rapid marketing and, if needed, short-term operation while pursuing a sale. Additional steps include outreach to large institutions as potential acquirers, engagement with potential nonbank bidders, work to improve receivership borrowing arrangements, and an internal review of numerical thresholds where inflation has eroded real values, including the USD 100 billion tailoring threshold, which Hill noted is equivalent to about USD 124 billion based on inflation since 2019, and USD 10 billion thresholds used for the FDIC’s large bank deposit insurance assessment scorecard and continuous examination program. The speech also referenced interagency work on capital reforms including the supplementary leverage ratio, options to reform supervision, and a planned rulemaking to restrict supervisory actions based on reputational risk and to address debanking.
Federal Deposit Insurance Corporation 2025-04-08
Federal Deposit Insurance Corporation previews content waivers for insured depository institution resolution plans and an industrial loan company request for information
FDIC Acting Chairman Travis Hill outlined initiatives on de novo bank formation, digital assets, and insured depository institution resolution planning. Key points include potential adjustments to capital expectations for new banks, rescinding prior notification requirements for crypto activities, and revising resolution planning FAQs to focus on rapid marketing and short-term operations. Hill also mentioned reviewing regulatory asset thresholds and interagency work on capital reforms and supervisory actions.