FDIC’s McWilliams highlights de novo formation, reduced reg burden, innovation office in 2019 plan

Activities underway to promote more de novo formation, reduced regulatory burden for community banks, and creation of an Office of Innovation are highlighted in the chairman’s message for the Federal Deposit Insurance Corp.’s (FDIC) 2019 annual performance plan, released Wednesday.

FDIC Chairman Jelena McWilliams, in her message, noted her agency’s request for comments on the deposit insurance application process to identify potential improvements that would help encourage the formation of new banks. (Comments are due March 31; see story). She also noted the agency’s work underway to streamline evaluations of deposit insurance applications and said it has launched a process to receive and review draft deposit insurance proposals. “Through these initiatives, we seek to improve the quality of submissions and reduce the time necessary to review and process applications, particularly those involving complex proposals,” she wrote.

McWilliams also noted the FDIC’s “Back to Basics” initiative, designed to tailor regulatory requirements to the risk presented by community banks; she said FDIC is looking to ease unnecessary burden for community banks “without sacrificing consumer protection or prudential requirements.”

The FDIC chairman also reiterated the agency’s plan to establish an Office of Innovation that will partner with banks and non-banks to understand the effects of technology on the business of banking. This office, she wrote, will be tasked with addressing the following:

  1. How can the FDIC provide a safe regulatory environment to promote the technological innovation that is already occurring?
  2. How can the FDIC promote technological development at community banks that often have limited research and development funding to support independent efforts?
  3. What changes in policy – particularly in the areas of identity management, data quality and integrity, and data usage or analysis – must occur to support innovation while promoting safe and secure financial services and institutions?
  4. How can the FDIC transform – in terms of our technology, examination processes, and culture – to enhance the stability of the financial system, protect consumers, and reduce the compliance burden on our regulated institutions?

McWilliams also noted the agency’s leadership is undertaking a comprehensive review of supervisory processes and the organization, workforce structure, and capabilities supporting FDIC’s supervisory mission; and will increase focus on underserved or unbanked communities. She said the FDIC has issued a request for information soliciting feedback on steps the agency can take to better enable FDIC-supervised banks to offer small dollar credit to consumers.

FDIC 2019 Annual Performance Plan

RR: Deposit insurer extends comment deadline for RFI about insurance application process (Feb. 12, 2019)

FDIC Requests Information on the Deposit Insurance Application Process (FIL 80-2018)

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