fbpx

How to Apply For a Banking License in the USA

How to apply for a banking license in the USA

Two of our previous posts, Offshore Banking License in Puerto Rico and USA Banking Representation Office For Foreign Banks, show the different options to start a banking operation in the USA. Now we will focus on establishing a banking subsidiary in the USA.

New Bank Charter

If you are a foreign bank, license requirements to establish a subsidiary in the USA will depend on the type of application: Federal or State banking license also called a Federal or State Charter.  If you apply for a Federal Charter, the application process will include:

  

  • Organizing a group of five or more individuals.
  • Application to the Office of the Controller of the Currency (OCC).
  • Business Plan.
  • Detailed biographical and financial information of each organizer, director, officer, and shareholder.
  • Filing of Articles of association and By-laws.
  • Application to the Federal Deposit Insurance Corporation (FDIC).

If you apply for a State Charter the application process will include:

  • Organizing a group of five or more individuals.
  • Application to the State regulator.
  • Business Plan.
  • Detailed biographical and financial information of each organizer, director, officer, and shareholder.
  • Filing of Articles of association and By-laws.
  • Application to the Federal Deposit Insurance Corporation (FDIC).

The capital amount for a new bank application varies by state. In Puerto Rico, the minimum capital requirement is 5 million dollars for establishing an international bank. Click here for more information. In the two types of charters, the directors and officers should show a long track of banking experience in the United States.

Acquiring an existing Bank

The other option to enter the US market if you are a foreign bank is to buy an established bank. The process starts with finding a potential target bank. But you cannot buy any shares unless you receive the approval of the Federal Reserve (Fed) and if the bank is a Publicly Held Company, you will also need the approval of the SEC. This process is lengthy and long due diligence is needed, as well as the approval of the shareholders and directors of the target bank and approval of State banking supervision authorities.

If you are buying an existing bank in the US the process goes like this:

  • Application to the Fed including detailed information of the foreign bank applicant’s finance, business, management and system of home country supervision.
  • Fed will solicit public comments or objections.
  • Fed will evaluate management and financial resources of both the acquirer and the target bank.
  • Fed will evaluate the consolidated AML effectiveness of the applicant.
  • Fed will evaluate the supervision and reporting to which the applicant is subject to its home country.
  • The applicant will provide information to the Fed about any other affiliate office.
  • The applicant will prove to Fed that all Parent, subsidiary to buy and any other affiliate office are well capitalized and well managed. For the subsidiary to buy, the Fed requires, in addition, satisfactory credit ratings.

Buying an existing bank involves additional considerations such as the location of the target bank in relation to the buyer market, especially if the buyer is a foreign bank willing to target Expats living in the US. Additionally, the extensive due diligence and legal advice needed as well as the ability to locate the right target, make the buying of an existing target a little more expensive option than starting a new bank in the USA.

Offshore Company

Offshore Companies

Our team is trained to provide you with the necessary information for the formation of your project.

Like this article? Join our Linkedin group Offshore Banking Intelligence

 

Testimonials

Thanks to FAS & CPA Consultants and Fulton Abraham Sanchez, CPA, I was able to resolve a debt of $479,677.71 that I had with the IRS.

Gala Cedeño

My experience with FAS CPA & Consultants has been incredible, their professionalism is impeccable. I highly recommend them.

Carlos Lange

I highly recommend FAS CPA & Consultants, they are responsible, efficient and very dedicated.

David Barceló

 

Request a Confidential Consultation

FAS CPA & Consultants

9000 SW 137 AV Suite 224 Miami, FL 33186 T: 786-462-7899 E: support@fascpaconsultants.com

Your Name (required)

Your Email (required)

Subject

Your Message

Fulton Abraham Sanchez, CPA

Fulton Abraham Sánchez, CPA is a Certified Public Accountant, specialized In Tax Planning, International Business, Wealth Management and Offshore Banking. You can email him to fa@fascpaconsultants.com or follow us on Facebook : FAS CPA & Consultants.

You may also like...

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

error: Content is protected !!