Passed
405 Yea4 Nay21 Not voting2/3 required
HR-4544-119
Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Sponsored by Maxine Waters (D-CA)
What it does
This bill would require federal financial regulators to review and streamline the process for approving new (de novo) banks and credit unions. Regulators would be required to minimize duplicative information requests by collecting data from other agencies on an applicant's behalf, review how new institutions raise startup capital, and develop outreach plans to help interested parties understand the regulatory process. At an applicant's request, regulators would also assign a dedicated caseworker and provide a list of established institutions willing to serve as mentors.
Who benefits
Entrepreneurs and community groups seeking to charter new banks or credit unions, particularly in underserved or rural areas that lack adequate banking access. Communities currently designated as "banking deserts" that may gain new local financial institutions. Small businesses and low-income households in those areas who would gain access to credit and deposit services. Minority depository institution applicants who have historically faced higher barriers to charter approval. Existing banks and credit unions willing to serve as mentors, who may gain goodwill and potential future partners.
Who is hurt
Existing banks and credit unions that may face increased local competition from newly chartered institutions. Larger national banks that benefit from the current high barriers to entry in the banking sector. Federal regulators (FDIC, OCC, NCUA) that would bear new administrative burdens and costs to implement caseworker programs, interagency data-sharing, and stakeholder engagement plans. Taxpayers who may indirectly fund those implementation costs. Potentially, depositors at poorly managed de novo institutions if streamlining reduces scrutiny of applicant qualifications.
Supporters argue
Supporters argue that the number of new bank charters has collapsed — fewer than 10 de novo banks were approved annually in most years since the 2008 financial crisis, compared to over 100 per year in the early 2000s — leaving millions of Americans in banking deserts without access to affordable credit or basic deposit accounts. They contend that the current application process is so burdensome and opaque that qualified applicants are deterred before they even apply, and that assigning caseworkers and mentors addresses a well-documented information asymmetry without lowering safety standards.
Opponents argue
Opponents argue that the existing rigorous charter application process exists precisely to protect depositors and the broader financial system from undercapitalized or poorly managed institutions, and that streamlining it — even procedurally — risks approving banks that are not adequately prepared to operate safely. They contend that the post-2008 decline in de novo charters reflects regulators appropriately raising the bar after a crisis caused in part by lax oversight, and that adding caseworkers and mentor lists may create the appearance of regulatory endorsement, potentially misleading applicants and communities about an institution's viability.
Constitutional context
Congress has broad authority to regulate the formation and operation of depository institutions under the Commerce Clause (Art. I, §8, cl. 3), as banking activity is quintessentially interstate commerce under Wickard v. Filburn's aggregation principle. This bill directs agencies rather than delegating broad new rulemaking power, so it is unlikely to raise major questions doctrine concerns under West Virginia v. EPA (2022); however, post-Loper Bright (2024), any implementing regulations agencies issue would face independent judicial scrutiny rather than deference.
Checks and balances
Congress gains authority by directing federal regulators (FDIC, OCC, NCUA) to modify their internal processes; existing checks include agency rulemaking procedures, congressional oversight, and judicial review of any implementing regulations under the post-Loper Bright independent judgment standard.
Historical precedent
The FDIC issued updated de novo bank application guidance in 2016 to reduce barriers after the post-2008 charter drought, representing a prior administrative — though not statutory — effort to address the same problem.
Passed