Fintech · Industry brief

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De novo bank chartering is increasing under the Trump administration, with five new banks approved in 2025 and seven granted so far in 2026, putting the year on pace for the most new entrants since 2023. However, a Federal Reserve Bank of Kansas City study found that technological and structural changes—not just regulatory burden—are the primary drivers of the long-term decline in new bank formation, which averaged fewer than seven charters annually from 2010 through 2024 compared to 185 per year from 1960 through 2006. The study notes that even significant reductions in regulatory burden and initial capital requirements would only produce approximately five to six additional de novo banks per year and would not return chartering to pre-crisis levels. Current de novo applicants differ markedly from traditional community banks, with the wave overwhelmingly coming from nonbanks pursuing narrow-purpose trust or payments charters rather than full-service community lenders. Industry groups including the Independent Community Bankers of America and the Conference of State Bank Supervisors have cited post-crisis regulatory requirements—including over $25 million in upfront capital requirements and compliance costs consuming 11% to 15.5% of community bank payroll—as deterrents to traditional bank formation, contributing to industry consolidation where exits have far outpaced new entrants since 2008.

The European Commission and UK authorities proposed targeted regulatory easing measures aimed at improving competitiveness and market-risk model practicality, according to Fitch Ratings. The changes are expected to support bank consolidation and lending capacity while maintaining stable credit profiles with limited material impacts.

On September 11, 2026, the OCC, Federal Reserve Board, FDIC, and NCUA jointly issued proposed interagency guidance rescinding the June 2023 third-party risk management guidance. The agencies acknowledged the 2023 guidance was interpreted too broadly and led to overly process-driven approaches rather than tailored risk-based judgment. The new proposal emphasizes magnitude and likelihood of harm rather than "critical activities," allows streamlined reviews for lower-risk vendors, permits incomplete due diligence if supported by supplemental information, recognizes reliance on shared assessments and outside reviews, and states examiners will give due consideration to reasonable bank judgments. Comments are due November 16, 2026. The OCC, Federal Reserve Board, and FDIC also issued a joint statement on community banks' core service provider relationships, noting the concentrated market limits negotiating power and identifying three supervisory factors: transparency, contract features, and technology. The agencies suggested core providers may qualify as "institution-affiliated parties" under the Federal Deposit Insurance Act, potentially expanding enforcement reach. The Federal Reserve separately proposed a community bank guide for organizations under $30 billion in assets addressing operational resilience, security, compliance, and financial resilience across eight vendor categories.