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Applying for a Bank Charter 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.

Analysis of the timeline of previous fintechs who have received bank charters suggests that the bank charter approval should be in the near future (within ~6 months).

Key Takeaways. A chartered bank is a financial institution governed by a state or national charter that provides monetary transactions such as distributing loans or protecting deposits. Chartered banks can be issued by the state or federal government.

Chartering agencies ensure that new banks have the necessary capital and management expertise to meet the public's financial needs. The charterer is an institution's primary regulator, with front-line duty to protect the public from unsafe and unsound banking practices.

A bank's actual charter lays out operational guidelines for the bank, along with how it will comply with relevant regulations. This might include how the bank will maintain a certain minimum capital requirement.

Operating through a bank charter also provides access to the payments system operated by the Board of Governors of the Federal Reserve System (Federal Reserve) and access to wholesale funding, such as the Federal Reserve discount window, Federal Home Loan Bank advances, and the federal funds market.

Applying for a Bank Charter 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.