FDIC Eliminates the Competition: New Banks Banned

Joe Rauch
Atlanta Business Chronicle
December 17, 2008

The Federal Deposit Insurance Corp. may be implementing what is effectively a ban on new banks in metro Atlanta and other distressed areas nationwide, as the financial industry’s and broader economy’s deterioration accelerates.

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The FDIC, the nation’s bank deposit guarantor, has increased scrutiny of new banks applying for deposit insurance in select areas of the Southeast and other regions, including Western states, industry insiders said.

The new reviews, insiders said, make approval difficult in practice, if not impossible.

“It is a de facto ban,” said Stephen Johnson, CEO of Alpharetta-based consultant T. Stephen Johnson & Associates Inc. “I’ve never seen a time this difficult to get a charter.”

Johnson is a longtime bank organizer and consultant in Atlanta, raising $500 million for various bank investments during his two-decade career.

Spurring the new rules are worsening industry performance and an increasing skepticism that new banks can succeed in the same places where others have failed this year, those familiar with the process said.

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