Fallen off a cliff: 3 ways Travis Hill wants to boost de novos

Ladies and gentlemen, buckle up! We're diving headfirst into the world of banking, where the new sheriff in town, Travis Hill, is shaking things up at the FDIC. Hill, the acting chairman, has a clear mission: to boost de novo formations and revitalize the banking sector. Let's break down his three-pronged attack plan to get new banks off the ground and flying high!

1. Encourage More De Novo Activity

Hill is on a mission to bring back the glory days of de novo formations. He's calling for a healthy pipeline of new entrants in the banking sector, and he's not alone. Just under half of directors and executives surveyed by Bank Director in 2025 want to see more de novo formation, with many hoping for 10 to 25 new bank charters per year. Hill's plan? Think creatively about how to get more individuals into the system. This means streamlining the application process for deposit insurance and providing more support to new institutions during their early stages. Hill's message is clear: "We need to think creatively about how we can get more individuals into the system."

2. Address the Underlying Reasons for Bank Consolidation

Hill knows that rising compliance costs and ever-increasing technology expenses are major barriers to entry for new banks. He's determined to tackle these issues head-on. By addressing these costs, Hill aims to create a more favorable environment for new banks to enter the market and compete with established institutions. Hill's focus on innovation and technology adoption, particularly in fintech partnerships and digital assets, is designed to encourage the adoption of new technologies, which can be a significant draw for potential new bank entrants. This is particularly relevant given the increasing interest in fintech and digital assets, which can provide new revenue streams and competitive advantages for new banks.

3. Improve the Bank Merger Approval Process

Hill is not just talking the talk; he's walking the walk. He plans to improve the bank merger approval process and replace the 2024 Statement of Policy to ensure that merger transactions that satisfy the Bank Merger Act are approved in a timely way. This measure aims to reduce delays in the approval process for mergers, which can artificially slow industry consolidation and hinder the entry of new banks. Hill's message is clear: "We need to get these mergers approved quickly and efficiently, so new banks can enter the market and compete."

Hill's push for de novo formation is not just about boosting the number of new banks; it's about promoting a more vibrant and growing economy. By encouraging the entry of new financial institutions, Hill aims to fill gaps in local banking markets and provide credit services to communities that may be overlooked by other financial institutions. This initiative is part of a broader effort to shift the FDIC's stance toward M&A and promote a more dynamic banking sector.

So, what does this mean for you? It means that the banking sector is about to get a whole lot more exciting. With Hill at the helm, we can expect to see a surge in new bank formations, increased competition, and a more dynamic banking sector. So, buckle up and get ready for the ride of your life! The banking sector is about to take off, and you don't want to miss out on the action.