Pub. 18 2021 Issue 4

10 n EXECUTIVE VICE PRESIDENT’S MESSAGE continued from page 9 ● Regulators will review applications and recommend any modifications ● A de novo bank may open only after receiving approval from the FDIC and FID Regulatory Orders: All de novo banks are subject to no less than one order proving that regulatory requirements are met and are issued concurrently with approval to open A. FDIC order includes that deposit insurance is approved and remain in place for seven years B. FID order provides charter is approved and contains provisions similar to the FDIC order Order Provisions: ● Unique to each de novo bank with some provisions being satisfied before the bank opens and other provisions are ongoing requirements Compliance with Order: ● Noncompliance with order to include monetary fines against bank, board, and senior management Ongoing Provisions: ● Order sets minimum capital level and capital should never decline below the minimum ● Must adhere to the business plan and the bank must operate within FDIC-approved business plan Deviations: ● Deviating from a business plan is the most common deviation ● All orders granting deposit insurance require a bank to receive prior approval from FDIC before any deviation ● Banks must contact FDIC immediately to discuss areas deviated from without prior approval Deviations That Require Prior Approval: ● Changes to the balance sheet of off-balance sheet ● Changing funding structure ● Lending outside of approved activities Ultimately, the legislative committee chose not to endorse the state bank legislation. However, we anticipate that public bank legislation will be introduced in the 2022 Legislature. n In October, several bankers, including Lonnie Talbert, Jay Jenkins, Jason Wyatt, Angel Reyes and Jed Fanning testified before the Legislative Finance Authority Oversight Committee against creating a public bank.