# Starting a Bank

> The de novo path: OCC and FDIC applications, the statutory factors, standard conditions, the three-year plan, the fintechs that chartered, and buying a bank.

Starting a bank takes three approvals, a business plan the regulators will hold the bank to for three years, capital raised before it opens, a management team each agency has cleared by name, and a core, a BSA program and a set of policies that pass a preopening examination before the first deposit. It takes most organizers well over a year and can take several: Varo's path from preliminary approval to opening took about three years and, by its CEO's estimate, nearly $100 million.

For most of the 2010s almost nobody did it, and fintechs rented charters from sponsor banks instead ([Banking as a Service](https://www.syntaqx.com/books/banking-and-lending/banking-as-a-service)). That changed in 2025 and 2026: the OCC issued conditional approvals to Nubank, Mercury, Upstart and others, and to a wave of crypto and payments trust banks, and the FDIC approved industrial banks for Ford, GM and Stellantis. This chapter is the path itself, as the OCC's licensing manual, the FDIC's handbook for organizers and the approval letters describe it, then the fintechs that took it and the alternative of buying a bank. The charter types and agencies are in [Charters & Regulators](https://www.syntaqx.com/books/banking-and-lending/charters-and-regulators).

## How the Platforms Do It

As of October 2026, from approval letters, agency releases and company announcements:

| Company | Route | Charter | Milestones | What the approval required |
| --- | --- | --- | --- | --- |
| Varo | De novo | National bank | Final OCC approval and FDIC and Fed sign-off July 2020 | At least $104.4 million of capital (FDIC); deposits had been held at The Bancorp Bank since 2017 |
| SoFi | Acquisition | National bank | OCC and Fed approval January 18, 2022 to acquire Golden Pacific Bancorp | $750 million capital contribution to the renamed SoFi Bank, N.A. |
| Erebor | De novo | National bank | Granted late 2025 | Not reviewed here |
| Nubank, VALT, Mercury | De novo | National bank | OCC conditional approvals January, March and April 2026 | FDIC and, for holding companies, Fed approvals still to come at the time |
| Augustus National Bank | De novo | National bank | OCC conditional approval May 8, 2026; FDIC deposit insurance August 4, 2026 | Not reviewed here |
| Upstart Bank | De novo | National bank | OCC conditional approval July 23, 2026 | FDIC insurance and Fed holding company applications pending |
| Revolut Bank US | De novo | National bank | OCC preliminary conditional approval announced September 2026 | At least $95 million paid-in capital net of pre-opening costs; tier 1 leverage of at least 10% for three years; retail FX excluded until a separate non-objection; Fed and FDIC approvals needed |
| Ford Credit Bank, GM Financial Bank | De novo | Utah industrial bank | FDIC conditional approvals January 2026; to be established within 12 months | $1.5 billion and $667 million initial capital; 15% leverage ratio; FDIC non-objection on contracts, incentive plans and dividends in the first three years |
| Circle | De novo | National trust bank | Conditional approval December 12, 2025; final approval July 10, 2026 | Trust charter: no deposit insurance application |
| Laser Digital (Nomura) | De novo | National trust bank | Preliminary conditional approval May 29, 2026 | $6.5 million tier 1 capital, liquidity floors, business plan lock (detailed below) |

The pattern: a full-service bank needs the OCC (or a state), the FDIC and usually the Fed; capital floors are set per bank and are far above the statutory minimums for a risky or novel plan; and conditions name specific products the bank may not launch without asking.

## The Path

The OCC grants a national charter "in two steps: preliminary approval and final approval," and between them is the organization phase. With the FDIC and Fed steps alongside, a de novo full-service bank goes through:

1. **Prefiling.** Organizers meet the OCC (and the FDIC and state, as applicable) before filing; the OCC expects the proposed CEO to attend. The FDIC's handbook encourages a formal prefiling meeting as well.
2. **Applications.** The charter application and the deposit insurance application (the agencies use an interagency form), a Federal Reserve application if a holding company will control the bank, and biographical and financial reports for every organizer, director, executive officer and 10% shareholder.
3. **Public notice and comment.** Standard charter applications have a 30-day comment period. The OCC "seeks to make a decision within 120 days after receipt of a complete application or as soon as possible thereafter."
4. **FDIC review.** The FDIC acknowledges receipt within three business days, says within 30 to 45 days whether the application is substantially complete, runs a field investigation with the chartering agency that "should generally be completed within 60 to 90 days" of acceptance, then proposes any non-standard conditions and finalizes its recommendation within another 30 to 60 days.
5. **Preliminary conditional approval.** The bank becomes a body corporate "in organization." Capital must be raised within 12 months and the bank opened within 18 months, or the approval expires, and the OCC "is opposed to granting extensions."
6. **Organization phase.** Hire, raise capital, sign the core and other vendor contracts, write policies, build the BSA and compliance programs, prepare premises.
7. **Preopening examination.** Requested by letter at least 60 days before the planned opening, certifying the bank is "fully operationally ready."
8. **Final approval and opening.** The charter issues once all conditions are met and the FDIC insurance and any Fed approvals are in place.

Since June 2026 the OCC has said it may return a "materially deficient filing before meaningful processing" and plans to deny filings with significant supervisory, CRA or compliance concerns, so the completeness of the first submission now sets the schedule.

## The FDIC's Statutory Factors

A full-service bank needs deposit insurance, and the FDIC must weigh seven factors set by 12 USC 1816:

1. The financial history and condition of the institution.
2. The adequacy of its capital structure.
3. Its future earnings prospects.
4. The general character and fitness of its management.
5. The risk it presents to the Deposit Insurance Fund.
6. The convenience and needs of the community to be served.
7. Whether its corporate powers are consistent with the purposes of the FDI Act.

The FDIC's handbook says the soundness of the business plan, the qualifications of the board and management, and the adequacy of capital are its "key considerations in evaluating the overall proposal and the statutory factors," and that applications involving a bank owned by a commercial or financial company, or significantly involved with its parent and affiliates, "present unique characteristics." A fintech applicant is the second kind: its bank will do business with its parent's app, data and servicing, and the FDIC will want those contracts, their pricing and the bank's independence from the parent spelled out (12 CFR Part 354 formalizes this for industrial banks, [Charters & Regulators](https://www.syntaqx.com/books/banking-and-lending/charters-and-regulators#industrial-loan-companies)).

## Capital, Liquidity and the Three-Year Plan

The OCC has no single minimum capital amount; it expects projected capital to stay at or above well capitalized and "a tier 1 leverage ratio of no less than 8.0 percent for the first three years of operations or until the bank is expected to maintain stable profitability," and it can require more. The FDIC's standard conditions likewise include minimum initial capital and ongoing capital maintenance through the three-year de novo period. In practice the floor rises with the novelty of the plan: 10% for Revolut, 15% for the Utah industrial banks.

The business plan covers the first three years with projected balance sheets and income statements, and for those three years the bank must run inside it. The FDIC requires prior approval "for any material change to, or major deviation from, the business plan," and gives examples: a new geographic market, branching, new products or services, "new activities or third-party relationships, growth that significantly exceeds or falls short of projections." The OCC's version is a condition requiring 60 days' notice and a written non-objection before any "significant deviation or change from its business plan or operations," which includes "material changes to the Bank's products and services as well as changes to its risk and operating limits."

A worked example, using the conditions in the OCC's May 2026 approval of Laser Digital National Trust Bank:

| Condition | Requirement | Illustration |
| --- | --- | --- |
| Minimum tier 1 capital | $6.5 million | Raised before opening |
| Capital held as Eligible Liquid Assets | The greater of 50% of tier 1 capital or $3.25 million | $3.25 million, since 50% of $6.5 million is $3.25 million |
| Operating expense reserve | 180 days of operating expenses, in additional Eligible Liquid Assets, not double counted | A wind-down budget of $9 million a year needs about $4.4 million more |
| Total liquid assets the conditions imply | | About $7.7 million before any customer business |

Eligible Liquid Assets there means unencumbered cash, deposits at insured banks and Treasuries maturing within 90 days, in excess of all liabilities to repay funds, and the operating expense figure counts the costs of "a distressed, wind-down scenario." The point for a builder: a new bank's treasury system has to compute these numbers daily against the conditions, because breaking them is breaking an enforceable order.

## Standard Conditions

The conditions in an approval letter are "conditions imposed in writing by a Federal banking agency" and therefore enforceable under 12 USC 1818, the same statute behind consent orders ([Exams, Ratings & Call Reports](https://www.syntaqx.com/books/banking-and-lending/exams-and-supervision#enforcement)). The OCC's 2026 letter is a good template of what they cover:

- **The business plan lock** above, through the organization period and the first three years.
- **Capital and liquidity floors**, assessed quarterly, with "such higher amounts ... as it determines necessary."
- **People.** OCC no-objection before appointing any director or senior executive officer, with the definition extended to the chief compliance officer, the BSA officer, the chief technology officer and the chief information security officer, for the same period.
- **Shareholders.** Each person subscribing to 10% or more of the initial offering is cleared before buying.
- **Audit.** An independent external audit from formation, annually for at least three years.
- **Programs.** Board-approved policies for all OCC regulations and a BSA/AML/OFAC program with trained staff, finished before the preopening examination request.
- **Deadlines.** Capital in 12 months, opening in 18, a 60-day notice before opening.

The FDIC's standard conditions add fidelity bond coverage and financial statement audits during the de novo period, and its common non-standard conditions require FDIC approval of business plan changes and of changes in directors and senior officers.

## The Organization Phase as a Systems Project

The period between conditional approval and opening is when the bank is built, and the regulators examine the build before it opens. What has to exist by the preopening examination:

- **A core and its satellites.** CEOs of successful de novo banks told the FDIC that the core processing choice is "one of the most important decisions to be made" and the initial contract negotiation "critical," and the handbook asks for a technology plan naming each outsourced function and vendor with diligence, costs and dependency risk, plus "back-up and disaster recovery, incident response, cyber threat intelligence" and independent review of controls. Vendor contracts should be contingent on the charter and insurance approvals (Core Banking Systems covers vendor choice).
- **BSA, OFAC and CIP running end to end**, from account opening to monitoring to filing ([KYC & Account Opening](https://www.syntaqx.com/books/banking-and-lending/kyc-and-account-opening), [BSA/AML Programs](https://www.syntaqx.com/books/banking-and-lending/bsa-aml)).
- **Policies for every regulation the bank's products touch**, adopted by the board at its first meeting.
- **Reporting.** The first call report is due 30 days after the first quarter end the bank is open ([Exams, Ratings & Call Reports](https://www.syntaqx.com/books/banking-and-lending/exams-and-supervision#call-reports)).
- **Condition monitoring:** the capital, liquidity and business plan metrics the approval set.

A fintech that charters usually has a working product on a sponsor bank, and the hard part is moving it: accounts, card BINs, routing numbers, ledgers and disclosures from the partner to the new bank, often while both run in parallel, inside a business plan the regulators approved and that the migration itself must not deviate from. [Banking as a Service](https://www.syntaqx.com/books/banking-and-lending/banking-as-a-service) covers moving between banks; the migration discipline is in Core Modernization & Conversions.

## Fintechs That Chartered

- **Varo** received its national charter and FDIC and Federal Reserve approvals in July 2020, after "a three-year journey" that its CEO put at nearly $100 million, with the FDIC requiring at least $104.4 million of capital. It had held deposits at The Bancorp Bank since 2017; as a national bank it holds its own, and it has had to keep raising capital since ([Neobanks & Consumer Fintech](https://www.syntaqx.com/books/banking-and-lending/neobanks) has its results).
- **SoFi** bought a bank instead of building one: the OCC and Fed approved its acquisition of Golden Pacific Bancorp on January 18, 2022, SoFi committed $750 million of capital, and the bank became SoFi Bank, N.A., which SoFi said would let it pay "high-yielding interest in checking and savings."
- **The 2026 approvals.** The OCC gave conditional approvals to full-service national banks for Nubank (January), VALT (March), Mercury (April), Augustus (May 8, with FDIC insurance approved August 4) and Upstart (July 23), after Erebor's late in 2025, and announced Revolut's in September. Upstart's FDIC and Fed applications were still pending in August; Revolut's needed both.
- **Industrial banks** for commercial parents (Ford, GM, Stellantis, Edward Jones) went through the FDIC rather than the OCC ([Charters & Regulators](https://www.syntaqx.com/books/banking-and-lending/charters-and-regulators#industrial-loan-companies)).
- **Trust banks** for crypto and payments firms (Circle, Ripple, BitGo, Fidelity Digital Assets, Paxos, Laser Digital) took the uninsured national trust route, which skips deposit insurance and so the FDIC application.

Each move trades sponsor dependence for capital, examinations and, above $10 billion in assets, the debit interchange cap: Lender Licensing & Bank Partnerships covers the trade for lenders.

## Buying a Bank Instead

Acquiring an existing bank replaces the de novo application with change-of-control filings. Anyone acquiring control (the power to direct management or policies, or to vote 25% or more of a class of voting securities) of an insured bank must give the appropriate agency 60 days' prior written notice under the Change in Bank Control Act, which the agency can extend by 30 days and then up to twice more by 45 days; it can disapprove for monopoly, for the "competence, experience, or integrity" of an acquirer, or for an acquirer's financial condition. A company that will control a bank also becomes a bank holding company and needs Federal Reserve approval, which is what SoFi obtained.

What buying gets and costs:

- **Faster and more predictable** than a de novo, with a charter, deposit insurance, routing numbers, a core and examined policies already in place.
- **The target's history comes with it:** its CRA record, enforcement actions, loan book and core contract. Merger and acquisition applications consider CRA records ([Exams, Ratings & Call Reports](https://www.syntaqx.com/books/banking-and-lending/exams-and-supervision#cra)).
- **The business plan still changes,** and the regulators will treat a small community bank becoming a national fintech's balance sheet as exactly that.
- **A conversion is immediate work:** moving the acquired bank's customers to the acquirer's systems, or the acquirer's program onto the bank's core, is a core conversion with all its risks.

## How to Build It

These are deltas against the core model's `institutions` and `programs` ([The Core Data Model](https://www.syntaqx.com/books/banking-and-lending/banking-business#the-core-data-model)). A bank in organization and in its first three years runs under conditions that are dated, enforceable and measurable, so they are records with owners, metrics and evidence, not a PDF in a shared drive:

```sql
CREATE TABLE regulatory_approvals (        -- charter, insurance, holding company, change in control
  id               UUID PRIMARY KEY DEFAULT uuidv7(),
  institution_id   UUID NOT NULL REFERENCES institutions (id),
  agency           TEXT NOT NULL,            -- 'occ', 'fdic', 'frb', state agency
  kind             TEXT NOT NULL CHECK (kind IN ('charter_preliminary', 'charter_final',
                     'deposit_insurance', 'holding_company', 'change_in_control',
                     'fed_membership', 'business_plan_change', 'new_activity')),
  decision_ref     TEXT NOT NULL,            -- 'OCC CA 1377', FDIC order number
  document_uri     TEXT NOT NULL,            -- the letter, archived
  decided_on       DATE NOT NULL,
  expires_on       DATE,                     -- e.g. 18 months to open
  status           TEXT NOT NULL CHECK (status IN ('pending', 'granted', 'expired',
                     'satisfied', 'withdrawn', 'denied'))
);

CREATE TABLE approval_conditions (         -- each enforceable condition, as data
  id               UUID PRIMARY KEY DEFAULT uuidv7(),
  approval_id      UUID NOT NULL REFERENCES regulatory_approvals (id),
  number           TEXT NOT NULL,            -- as numbered in the letter
  text             TEXT NOT NULL,            -- verbatim
  kind             TEXT NOT NULL CHECK (kind IN ('capital', 'liquidity', 'business_plan',
                     'personnel', 'ownership', 'audit', 'program', 'deadline', 'other')),
  metric           TEXT,                     -- 'tier1_leverage', 'eligible_liquid_assets', ...
  threshold        NUMERIC(20, 6),
  owner            TEXT NOT NULL,            -- accountable officer
  in_force         DATERANGE NOT NULL,       -- e.g. organization period plus three years
  UNIQUE (approval_id, number)
);

CREATE TABLE condition_tests (             -- every measurement against a condition
  condition_id     UUID NOT NULL REFERENCES approval_conditions (id),
  business_date    DATE NOT NULL,
  measured_value   NUMERIC(20, 6),
  passed           BOOLEAN NOT NULL,
  evidence_ref     TEXT NOT NULL,            -- the report, GL extract or board minute
  PRIMARY KEY (condition_id, business_date)
);

CREATE TABLE business_plan_projections (   -- the approved plan, to test deviation against
  institution_id   UUID NOT NULL REFERENCES institutions (id),
  plan_version     INT NOT NULL,             -- a non-objected change creates a new version
  period_end       DATE NOT NULL,
  metric           TEXT NOT NULL,            -- 'total_assets', 'deposits', 'loans_by_type', ...
  projected        NUMERIC(20, 2) NOT NULL,
  tolerance_pct    NUMERIC(5, 2),            -- the bank's own trigger for asking first
  PRIMARY KEY (institution_id, plan_version, period_end, metric)
);
```

Design notes:

- **A product launch checks the plan first.** Any new `products` row or `programs` row at a bank inside its three-year window should require a link to a `business_plan_change` approval or a recorded determination that it isn't a significant deviation; that check belongs in the product release workflow, not in a lawyer's memory ([Rules as Data](https://www.syntaqx.com/docs/architecture/rules-as-data#record-which-rule-decided)).
- **Conditions are tested on a schedule.** Capital and liquidity conditions daily from the GL, personnel conditions on every HR change of a covered role, deadlines as computed dates with alerts ([Deadlines Are Computed and Stored](https://www.syntaqx.com/docs/architecture/rules-as-data#deadlines-are-computed-and-stored)).
- **Deviation is measured, not argued.** Actuals against `business_plan_projections` with the tolerance the board set, so growth that "significantly exceeds or falls short of projections" is seen before the examiner sees it.
- **Moving a program is a new `programs` row at the new institution**, with each account migrated as an event and the old program set to `winding_down`, never an update of `institution_id` on live accounts.

## Auditing

- **Every approval and condition, verbatim, with the archived letter** and the period each condition was in force.
- **Every condition test and its evidence,** including failures and what was done, because a missed condition is a violation the examiner will cite.
- **Business plan versions and the non-objections behind them,** and for each new product or partner, the determination that it was or wasn't a significant deviation.
- **Clearances for covered people:** the no-objection for each director and senior officer, including the BSA officer, CTO and CISO, dated before they started.

## What This Means for the System You Build

- **Budget for a long road.** Three agencies, a 30-day comment period, a 120-day target that starts only when the application is complete, 12 months to raise capital and 18 to open; plan the product migration around the approval dates, not the reverse.
- **Treat the business plan as a contract.** For three years, new products, partners, markets and unexpected growth may need a regulator's non-objection first; the release process has to know.
- **Make conditions machine-checked.** Capital, liquidity and personnel conditions are enforceable orders; monitor them like SLOs with an owner and evidence.
- **Build what the preopening exam will test.** Core, BSA/OFAC, policies, security and recovery are reviewed before opening, and the core contract signed in the organization phase is the one the bank lives with.
- **Compare with buying.** An acquisition trades application risk for a target's history and an immediate conversion.

## References

**Law and regulation**

- [12 USC 1816: Factors to be considered](https://www.law.cornell.edu/uscode/text/12/1816), the seven deposit insurance factors
- [12 USC 1817(j): Change in control of insured depository institutions](https://www.law.cornell.edu/uscode/text/12/1817), the 60-day notice, extensions, grounds for disapproval and the control definition

**Regulators and guidance**

- [OCC: Comptroller's Licensing Manual, Charters (December 2021)](https://www.occ.gov/publications-and-resources/publications/comptrollers-licensing-manual/files/charters.pdf), the two-step approval, organization phase, 12- and 18-month deadlines, 30-day comment period, 120-day target, 8% leverage expectation and three-year conditions
- [OCC: Conditional Approval No. 1377, Laser Digital National Trust Bank (May 29, 2026)](https://www.occ.treas.gov/topics/charters-and-licensing/interpretations-and-decisions/2026/cd1377.pdf), the business plan, capital, liquidity, personnel, audit and deadline conditions and their enforceability under 12 USC 1818
- [FDIC: Applying for Deposit Insurance, A Handbook for Organizers of De Novo Institutions](https://www.fdic.gov/sites/default/files/2024-03/handbook_0.pdf), key considerations, standard and non-standard conditions, the three-year business plan, technology planning and the review timeline (April 2017 edition as posted)
- [OCC: Conditional approvals of national trust bank charters (NR 2025-125, December 12, 2025)](https://www.occ.gov/news-issuances/news-releases/2025/nr-occ-2025-125.html), the December 2025 trust bank approvals

**In practice**

- [Banking Dive: Varo becomes first challenger bank to win national bank charter (July 31, 2020)](https://www.bankingdive.com/news/varo-first-challenger-bank-charter-occ/582686/), the final approvals, the $104.4 million capital requirement, the three years and the cost
- [SoFi: SoFi receives regulatory approval to become a national bank (January 18, 2022)](https://www.sofi.com/press/sofi-receives-regulatory-approval-become-national-bank/), the Golden Pacific acquisition and the $750 million contribution
- [Davis Wright Tremaine: OCC signals digital asset charter momentum (August 2026)](https://www.dwt.com/blogs/financial-services-law-advisor/2026/08/occ-signals-digital-asset-charter-momentum), the 2025-26 national bank and trust bank approvals, pending applications and the OCC's June 2026 filing guidance
- [Banking Dive: Revolut nabs conditional OCC charter (September 4, 2026)](https://www.bankingdive.com/news/revolut-nabs-conditional-occ-charter/829703/), capital, the 10% leverage condition, the retail FX exclusion and the remaining approvals
- [Goodwin: FDIC approves deposit insurance applications for ILCs proposing specialty business models (June 2026)](https://www.goodwinlaw.com/en/insights/publications/2026/06/insights-technology-fs-fdic-approves-deposit-insurance-applications-ilcs-specialty-business-models), the Ford, GM, Stellantis and Edward Jones conditions
- [ICBA Independent Banker: FDIC approves ILC applications for Ford, GM (January 23, 2026)](https://www.independentbanker.org/w/fdic-approves-icba-opposed-ilc-applications-for-ford-gm), the 12-month establishment deadline

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