Banking Regulations

Are they anti-bank?  They’re certainly in the way of getting new organizations into the banking business.  The total number of banks in the US has fallen from a peak over 18,000 to under 6,900 this year.  The first new bank to be Federally chartered since December 2010 [sic], the Bank of Bird-in-Hand in Bird-in-Hand, PA, opened last week after spending 7 months in charter Hell working on getting permission to open.  Here’s a sample of what BiH had to go through to be allowed to operate as a private business.

  • [T]he backers behind the Bird-in-Hand group raised about $17 million from investors.
  • Brent Peters, Bank of Bird-in-Hand CEO, estimated the group spent about $800,000 in preparing its application for a new charter
    • consulting and legal fees
    • rent on a temporary office
    • salaries of top managers, four of whom were on the payroll one month before the bank won FDIC approval
  • [L]ay out internal policies and procedures in detail
  • [S]pecify the systems in place to, for example, guard against cyberattacks
  • Paid consultants analyzed the local lending market and the feasibility of opening a bank there
  • The FDIC interviewed senior management and contacted banks competing nearby

All that because the feasibility of doing business and that business’ internal practices are for government to determine, not that business.

Government asks competitors what they think because competitors get a voice in whether a new bank should be allowed to operate in their territory.

Sounds pretty anti-bank to me.

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