Overview

• Fintech and crypto companies are increasingly applying for state and national bank charters to expand their operations and reduce borrowing costs.
• The Trump administration's pro-growth regulatory stance has encouraged firms to pursue charters, with regulators emphasizing innovation and expedited approvals.
• Despite renewed interest, obtaining a charter remains challenging, requiring significant capital investment and compliance with stringent regulations like anti-money laundering laws.
• The number of new bank charters has dropped sharply since the 2008 financial crisis, with only four approved in 2023, but activity is now picking up.
• The collapse of Synapse Financial Technologies has prompted proposed regulatory reforms for banks working with fintech partners, highlighting the risks in the evolving financial landscape.