Starting a bank involves a long organization process, and permission from several regulatory authorities. Extensive information about the organizers, the business plan, senior management team, finances, capital adequacy, risk management infrastructure, and other relevant factors must be provided to the appropriate authorities.
The proposed bank must first receive approval for a federal or state banking charter. Before granting a charter, the chartering regulator must determine that the applicant bank has a reasonable chance for success and will operate in a safe and sound manner.
Next, the proposed bank must obtain approval for deposit insurance from the Federal Deposit Insurance Corporation. Additional approvals are required from the Federal Reserve if, at formation, a holding company would control the new bank or a state-chartered bank would become a member of the Federal Reserve.