As we navigate through 2025, the financial services industry faces a dynamic environment shaped by a new government administration, evolving leadership at key regulatory bodies like the Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation (FDIC), and Consumer Financial Protection Bureau (CFPB), and a reported openness from the acting FDIC Chairman to encourage de novo banks. At CCG Catalyst Consulting, we have been asked whether now is a good time to launch a new bank, and if so, what type of bank holds the most promise. This article examines the current climate, including specific considerations for industrial charter banks, to provide clarity for prospective founders.
The regulatory landscape in 2025: a window of opportunity?
The transition to a new administration often brings shifts in regulatory priorities, and 2025 appears to be no exception. The acting FDIC Chairman has reportedly signaled support for de novo banks, suggesting a desire to see more new charters to foster competition and innovation in the banking sector. This stance could translate into more streamlined application processes or clearer guidance, which has historically spurred periods of de novo growth. For instance, over 1,000 new banks emerged in the early 2000s when regulatory conditions were similarly encouraging.
However, the broader regulatory environment remains nuanced. The OCC, FDIC, and CFPB are undergoing leadership transitions, and while a pro-business administration might lean toward deregulation, potentially easing capital requirements or compliance burdens, new banks typically face rigorous scrutiny to ensure stability. Political and economic uncertainties tied to the new administration could also introduce volatility, requiring founders to remain adaptable. Engaging early with regulators through prefiling meetings can help founders to navigate these complexities and align with expectations.
Economic and market conditions: balancing risks and opportunities
Economic conditions in 2025 play a critical role in assessing the viability of a new bank. While specific data for this year is not yet available, recent trends suggest rising interest rates and inflationary pressures could persist, offering higher loan margins but also increasing funding costs. A potential economic slowdown might dampen loan demand, while heightened competition from established banks and fintechs poses challenges. However, digital banking continues to reshape consumer expectations, lowering barriers to entry for new banks that can operate with lean, tech-driven models. Underserved markets such as rural communities, small businesses, or specific demographics like Gen Z present fertile ground.
FDIC support for de novo banks: a positive signal amid challenges
The acting FDIC Chairman’s reported encouragement of de novo banks is a significant factor. If this support translates into actionable policies like faster approvals or reduced initial capital hurdles, it could lower the traditional barriers to entry. However, de novo banks still face a steep climb, typically requiring 3-5 years to achieve profitability. Key challenges include:
Despite these hurdles, the FDIC’s openness suggests a potential easing of the path forward, particularly for well-prepared applicants with robust business plans.
Types of banks: where lies the greatest promise?
Not all bank models are created equal, and the type of bank matters as much as the timing. Below, we explore several options:
1. Digital-first community banks
A digital-first community bank, focusing on underserved regions or demographics, offers a compelling model. By combining the trust of a local institution with low-cost digital delivery — think mobile apps and online platforms — these banks can serve markets like rural areas (where over 600 US counties rely solely on community banks) or small businesses needing tailored lending. This model minimizes overhead while maximizing reach, making it a strong contender in today’s environment.
2. Niche specialty banks
Banks targeting specific industries or customer segments such as healthcare professionals, gig workers, or sustainable businesses can differentiate themselves effectively. Specialization allows for customized products (e.g., high-yield savings accounts for freelancers or ESG-focused loans) and builds loyalty. Regulatory leniency toward smaller, niche players could further enhance their appeal in 2025.
3. Industrial charter banks
Industrial charter banks, also known as industrial loan companies (ILCs), are state-chartered, FDIC-insured institutions often owned by nonfinancial companies. They offer flexibility, as they are exempt from the Bank Holding Company Act, allowing commercial firms to own them without Federal Reserve oversight. States like Utah have become hubs for ILCs, with charters enabling nationwide branching and niche lending.
In 2025, ILCs could be promising due to the FDIC’s de novo support and their ability to serve underserved markets or integrate with parent company ecosystems (e.g., a tech firm offering banking services). However, they face challenges, including heightened regulatory scrutiny over nonfinancial ownership and past controversies (e.g., Walmart’s withdrawn ILC application). Founders must be prepared for rigorous oversight and ensure alignment with FDIC expectations, but the model’s flexibility makes it a viable option for innovative ventures.
4. Fintech partnership banks
Banks partnering with fintechs to offer Banking-as-a-Service (BaaS) or embedded finance act as regulated backbones for fintechs needing deposit accounts, payment processing, or lending infrastructure. While this model taps into the growing demand for integrated financial services, it requires careful risk management, especially given regulatory scrutiny of fintech partnerships. Nonetheless, it is a promising avenue for tech-savvy founders.
Which type of bank holds the most promise?
Among these options, digital-first community banks and niche specialty banks stand out as the most promising in 2025. They align with current trends — digitalization, personalization, and serving underserved markets — while offering manageable entry points. Industrial charter banks also hold potential, particularly for founders with strong parent company backing and a clear niche, but they require navigating additional regulatory complexities.
CCG Catalyst’s recommendation: proceed with strategic caution
Is 2025 a good time to start a new bank? The answer hinges on preparation and strategy. The acting FDIC Chairman’s support for de novo banks, combined with potential deregulatory tailwinds, creates a window of opportunity. However, economic uncertainties, competition, and operational challenges demand a meticulous approach. At CCG Catalyst Consulting, we advise prospective founders to take the following steps:
The most promising banks in 2025 will be those that blend innovation with a clear focus whether that is a digital community bank, a niche specialty player, or a fintech partner. Industrial charter banks offer a unique path for those with the right backing. While the timing offers potential, success hinges on execution. If you are considering a de novo bank, CCG Catalyst can guide you through strategic planning, regulatory navigation, and operational setup to maximize your chances of thriving in this dynamic landscape.
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