The Bank Charter Gold Rush: Who's Buying In and Why You Should Care

Something is happening that hasn't happened in a generation: non-banks want to become banks.

Not through partnerships. Not through rent-a-charter BaaS arrangements. They want actual charters. And for the first time in years, regulators are saying yes.

Edward Jones — the brokerage firm with 19,000 financial advisors and $2.1 trillion in client assets — just received FDIC approval for an industrial loan company charter in Utah. The bank plans to open in 2027 with at least $330 million in initial capital, offering deposits and certificates of deposit.

The OCC has issued a final rule simplifying licensing requirements for banks with less than $30 billion in assets. The FDIC just opened failed bank auctions to private equity firms. And the shelf charter process — which lets non-bank investors pre-position themselves to bid on failed banks — is being streamlined from years to weeks.

The barriers to entry in banking are lower than they've been since the savings and loan era. Community bank boards need to understand what's coming through the door.

The Edward Jones Precedent

Edward Jones' ILC charter is the biggest new bank charter in years — and it's a preview of what's coming.

The firm applied for the charter in 2020. It took six years to get approved. But the approval itself signals a fundamental shift in the FDIC's posture toward non-traditional charter applicants.

Here's what Edward Jones gets with its ILC charter:

• FDIC-insured deposits: The ability to gather deposits directly from its 8 million clients, rather than sweeping them to third-party banks
• Lending authority: The ability to originate loans — potentially including margin lending, securities-based lending, and personal loans to its advisory clients
• Deposit funding advantage: FDIC-insured deposits are the cheapest source of funding in finance. Edward Jones' bank will have access to a massive, pre-existing customer base to gather those deposits
• Regulatory framework: Subject to FDIC and Utah DFI supervision, but exempt from Federal Reserve holding company oversight (the ILC loophole)

For community banks, the competitive implications are significant. Edward Jones' 19,000 advisors sit in offices across rural and suburban America — the same communities that community banks serve. Those advisors already have deep, trusted relationships with the same customers your bank is trying to attract.

When Edward Jones can offer its clients an FDIC-insured savings account paying a competitive rate, a CD, and eventually a lending product — all within the existing advisory relationship — your bank loses a customer it never saw leave.

The OCC's Licensing Reforms

While Edward Jones navigated the ILC route, the OCC has been quietly making it easier for traditional banks to form, merge, and restructure.

The OCC's March 2026 final rule simplifies licensing requirements for banks under $30 billion in assets. Key changes include:

• Streamlined application processes: Reduced documentation requirements for "routine" corporate activities like branch openings, officer changes, and subsidiary formations
• Expedited review timelines: The OCC commits to faster processing for applications from well-capitalized, well-managed institutions
• Conditional approvals: The ability to grant preliminary charter approvals before all conditions are met, allowing organizers to begin capital-raising with greater certainty

For de novo banks — brand-new bank charters — the reform is particularly meaningful. The de novo application process has been so slow and uncertain that the number of new bank charters issued annually dropped from hundreds in the early 2000s to single digits in many recent years. In 2024, only 7 new bank charters were issued nationwide.

The OCC's reforms won't single-handedly reverse this trend, but they signal that the regulatory environment is shifting from "why should we approve this?" to "how do we make this work?"

Who Else Is Coming

Edward Jones is the headline, but it's not the only non-bank entity pursuing a charter:

Fintech companies that exhausted the BaaS model are looking at direct charters. After the regulatory crackdowns on bank-fintech partnerships in 2023–2025 — including consent orders at Sutton Bank, Blue Ridge Bank, Evolve Bank, and others — some fintechs have concluded that owning their own charter is safer than renting one. The cost and complexity of obtaining a charter is now weighed against the regulatory risk and operational friction of partner banking.

Crypto firms are pursuing various charter types. Multiple cryptocurrency exchanges and stablecoin issuers have applied for or obtained trust company charters, money transmitter licenses, and state banking licenses. The GENIUS Act's framework for permitted payment stablecoin issuers created a new category of quasi-bank entity that can issue dollar-denominated digital currency backed by reserves.

Private equity firms can now bid on failed banks thanks to the FDIC's policy rescission. While this isn't a new charter per se, it effectively allows PE to acquire an existing charter through the resolution process — potentially faster and cheaper than applying for a de novo charter.

Large retailers and technology companies continue to explore financial services. Walmart obtained a fintech charter in 2024. Amazon, Apple, and Google all offer financial products through bank partnerships, but the strategic logic of owning their own charter grows stronger as their financial services ambitions expand.

Why This Matters for Your Bank

The banking industry has been consolidated for decades. The number of FDIC-insured banks has fallen from over 14,000 in 1985 to approximately 4,200 today. Community bank boards have grown accustomed to a shrinking competitive set — fewer banks, less new entry, and organic growth from market share gains as competitors merged away.

That dynamic is reversing.

The new entrants aren't traditional banks. They're well-capitalized firms with existing customer relationships, sophisticated technology, and business models that cross-subsidize banking with other revenue streams. Edward Jones doesn't need its bank to be independently profitable — it needs its bank to be the gravitational center that holds $2.1 trillion in client assets on its platform.

This changes the competitive calculus for community banks in several ways:

Deposit competition intensifies. Every new charter adds another deposit-gatherer to the market. Edward Jones' bank alone could pull billions in deposits from existing bank relationships — not through aggressive pricing, but through the convenience of offering deposits within an existing advisory relationship.

Talent competition accelerates. New charters need experienced bankers to run them. Where do they recruit? From existing community banks. Your best credit officers, compliance managers, and branch managers are targets for well-capitalized new entrants willing to pay above-market compensation.

Customer expectations rise. New entrants bring consumer-grade technology and user experience expectations into banking. Edward Jones' clients are accustomed to a seamless digital experience. When the advisory firm offers banking products through the same app and advisor relationship, the technology bar for your bank's mobile experience rises by default.

The Counter-Argument: Barriers Still Exist

It's worth noting that obtaining a bank charter remains expensive, time-consuming, and regulatory-intensive. Even with the OCC's streamlined processes, a de novo bank needs:

• $15–30 million in initial capital (minimum)
• A management team with verifiable banking experience
• A viable three-year business plan
• BSA/AML, CRA, and fair lending compliance frameworks in place before opening
• A physical presence (the OCC has not approved purely digital national bank charters to date)

These barriers ensure that the "gold rush" won't produce hundreds of new banks overnight. But the direction of travel is clear: the regulatory posture has shifted from restrictive to facilitative, and the types of entities seeking charters are larger, better-capitalized, and more strategically ambitious than the typical de novo organizer of the past.

What Your Board Should Do

1. Know your competitive landscape. Identify which non-bank entities operate in your market and could plausibly seek or acquire a bank charter. Edward Jones is obvious, but consider: which fintech companies serve your customers? Which national retailers have branches in your footprint? Which PE firms have been acquiring banks in your region?

2. Strengthen your deposit franchise. The most valuable asset your bank has isn't its loan portfolio — it's its deposit relationships. New entrants will target deposits first because they need funding. Deepen your operating account relationships with commercial customers. Make your retail deposits stickier through digital engagement, relationship pricing, and service quality. The banks with the strongest deposit franchises will be the hardest to displace.

3. Invest in technology. New entrants will compete on user experience. Your mobile banking app, online account opening process, and digital payment capabilities need to be competitive with the best in the market — not the best among community banks, but the best period. If your customer can open an FDIC-insured savings account at Edward Jones in 60 seconds through their existing app, your 15-minute branch-based process won't cut it.

4. Consider strategic M&A. If your bank is too small to compete with well-capitalized new entrants, consider whether a merger with another community bank creates the scale needed to invest in technology, talent, and products. The community banks that thrive in the next decade will likely be larger and better-capitalized than today's average.

5. Double down on what new entrants can't replicate. Edward Jones can offer deposits and loans. It cannot offer a 30-year relationship with the local business owner, a detailed understanding of the local real estate market, or a loan officer who coached the borrower's kid in Little League. Community banking's competitive advantage has always been relationships. In a market with more competitors, that advantage becomes more valuable, not less.

6. Engage with regulators. If you have concerns about the competitive impact of new charter entrants in your market, raise them. The OCC and FDIC solicit comments on charter applications. Your voice matters — not to block competition, but to ensure that new entrants face the same regulatory expectations that you do.

The Bottom Line

The bank charter gold rush is real. Well-capitalized, technologically sophisticated non-bank entities are entering the banking industry through multiple pathways — ILC charters, de novo national charters, failed bank acquisitions, and fintech charters. The barriers to entry, while still significant, are lower than they've been in decades.

Community banks can respond in one of two ways: circle the wagons and hope the new entrants fail, or recognize that the competitive landscape is evolving and evolve with it.

The banks that survived the last wave of disruption — from interstate banking, from online banking, from the 2008 crisis — were the ones that adapted fastest. The next wave is already here.

The question isn't whether new competitors will enter your market. It's what you'll have built by the time they arrive.