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#2030706 - 07/30/15 01:59 PM This is pretty telling....
MB Guy Offline
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Way, way south.
So, what do you think is the cause?

Quote:
Only 3 New U.S. Banks Opened Since 2010

Data from the FDIC shows that an average of more than 100 banks were started each year prior to the financial crisis, but since 2010, only three new banks have opened. Some experts attribute the drought to the Dodd-Frank law, which requires banks to hold more capital to deal with a crisis and imposes more restrictions on lending, but others attribute the dearth of new banks to extremely low interest rates since the financial crisis, making banking less profitable. It generally takes startup banks several years to turn a profit, but interest rates near zero means it takes even longer. Experts say there is more interest in peer-to-peer lending companies these days, as they do not have the same requirements as traditional banks. However, Federal Reserve economists believe 75 to 80 percent of the decrease in new banks is not related to regulation and would have occurred anyway as a normal course of business. Since 2010, only New Haven, Conn.-based Start Community Bank, Bank of Bird in Hand in Pennsylvania, and Lakeside Bank in Lake Charles, La., have opened; Bedford, N.H.-based Primary Bank has been approved but has yet to open.

From "Only 3 New U.S. Banks Opened Since 2010"
CNNMoney (07/29/15) Long, Heather
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#2030711 - 07/30/15 02:08 PM Re: This is pretty telling.... MB Guy
YosemiteSamIAm Offline
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Mr. Rank and File:

"I think that greedy Wall Street tycoons are tying up all the money that could be used to start new banks and they are all doing it deliberately to try and stick it to the 99% and (froths at mouth) we need to make them give money for new banks (head spins 360 degrees) and then make them work minimum wage jobs so they can so what it is like..." (grabs chest, falls to knees, shakes fist at unfairness of the universe)...(turns on MSNBC...)/sarc off
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#2030726 - 07/30/15 02:37 PM Re: This is pretty telling.... MB Guy
SociallyInept Offline
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Somewhere out there.
I'll take answer E) All of the above.
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#2030736 - 07/30/15 03:04 PM Re: This is pretty telling.... MB Guy
Pale Rider Offline
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under the Lone Star
Rates at near zero since January 2009....if the Fed doesn't raise them soon, we are going to head into another recession with the Fed lacking any ability to impact the economy with monetary policy.

It is a monumental government cluster.
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#2030737 - 07/30/15 03:05 PM Re: This is pretty telling.... MB Guy
MyBrainHurts Offline
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Illinois
I was at a banking conference in Chicago in December 2009. An FDIC speaker on the regulatory panel point blank said they wanted to see fewer bank charters in the area, not more, and really didn't want to see de novo charter applications.

Add on to that attitude the mass of regulation since 2009, mix in the cost of compliance, then low interest rates, and it's amazing there are any community banks left.
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#2030742 - 07/30/15 03:08 PM Re: This is pretty telling.... Pale Rider
YosemiteSamIAm Offline
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Originally Posted By Pale Rider
Rates at near zero since January 2009....if the Fed doesn't raise them soon, we are going to head into another recession with the Fed lacking any ability to impact the economy with monetary policy.

It is a monumental government cluster.
Pale, did you forget to put a word in your post? shocked
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#2030776 - 07/30/15 03:53 PM Re: This is pretty telling.... MB Guy
califgirl Offline
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There are numerous requirements for a new bank charter, with capital being only one of many.

How many years do you have to project out in a business plan, in today's rate environment (let alone 2010's) to reach profitability? How many columns are there in an Excel spreadsheet? Infinity and beyond?

Regulators require a business plan that shows profitability in some reasonable time frame.
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#2030779 - 07/30/15 03:56 PM Re: This is pretty telling.... MB Guy
MB Guy Offline
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Way, way south.
califgirl, has that changed since 2009?
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#2030870 - 07/30/15 07:40 PM Re: This is pretty telling.... MB Guy
califgirl Offline
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The O.C., California
I don't think so.
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#2030875 - 07/30/15 07:45 PM Re: This is pretty telling.... MB Guy
MB Guy Offline
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So, what do you think is the cause of the slow/no growth of new banks? Regulatory requirements with D-F? A local group of former bankers who sold out their old one to 5/3 here just could not get get their new bank opened as the regulators just kept dragging their feet and requiring different items. In the end, the regulators told them to just buy an existing bank instead, and that's what they did. Why are regulators pushing back against these new bank start-ups?
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#2030948 - 07/30/15 10:08 PM Re: This is pretty telling.... MB Guy
califgirl Offline
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What I said earlier - new bank organizers can't create a business plan that leads to profitability in the foreseeable future. I don't know the specifics of the 3 that were approved, other than the Amish bank in PA. If you have a well defined market area, plenty of free demand deposits, lots of capital and enough loan demand, you can create something that makes sense. Apparently the Amish did that.

Otherwise,the regulators will keep pushing back. They won't tell you what's wrong with your projections or what you might change. They will just say it's unacceptable, please re-submit. They will ask for more information, as you said. And guess who has the deepest pocket and the most patience? The regulators.
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#2031024 - 07/31/15 02:24 PM Re: This is pretty telling.... MB Guy
noelekal Offline
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Texas
Yep califgirl. You're right.

Shame of it is their deep pockets are replenished with taxpayer (our) money. So we pay for our own government-inflicted misery.
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#2031086 - 07/31/15 04:17 PM Re: This is pretty telling.... MB Guy
homestar Offline
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It's a better risk to throw your money to a smartphone App developer.
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