Three Charters, Three Tracks, One Senate Vote
By: Paul Schaus
June 9, 2026
In my recent piece on the Federal Reserve's payment account proposal, I argued that community and regional bank leadership should treat the May 20 Federal Reserve action as a community and regional banking story, not a fintech-and-crypto story. A reader asked a follow-up question: are ILC applicants going to land on a 90-day review track under the Trump's May 19 executive order the same way Fed Tier 3 access has been frozen? The honest answer requires distinguishing between three separate chartering regimes that the news organizations have been blurring together. They are moving in different directions, at different speeds, and through different agencies. And one of them is about to be reshaped by a Senate vote that has gotten almost no attention in the banking trade press.
The de novo community bank track. De novo banks that go with a national charter go through the OCC alone, with state-chartered de novo's going through the FDIC plus a state regulator. For national bank applications, Comptroller Jonathan Gould has restructured the chartering organization to report directly to him, pulled supervision examiners into one- to two-year rotations to absorb the volume, and is holding his team to a 120-day approval target. The OCC took in 18 charter applications in 2025 — matching the prior four years combined, with six already conditionally approved and Erebor Bank already open — in the first 7 weeks it grew to $1.1 billion. FDIC Chair Travis Hill has called de novo formation having "fallen off a cliff" post-2008 and is actively working to reverse it. Treasury Secretary Bessent has made new bank formation a public priority. A credible community bank de novo with capital, a viable business plan, and a real management team should expect 6 to 9 months at the OCC and a comparable timeline at the FDIC today. That is the fastest chartering environment for community bank formation we have had since the financial crisis.
The industrial loan company track. ILC applications flow through the FDIC and a state chartering authority, primarily the Utah Department of Financial Institutions and the Nevada Financial Institutions Division. They are designed for commercial parents that want to operate an FDIC-insured depository without registering as a bank holding company. The application universe today includes PayPal (December 2025), Affirm (January 2026), Nissan (June 2025), and the recently approved Ford, GM, Stellantis, and Edward Jones. The historical norm I documented in my February 2026 Consulting Magazine piece was 12 to 18 months. Stellantis cleared in 15. Edward Jones came through in 10 on resubmission. The realistic compression today is 9 to 12 months for the cleanest captive-finance cases and 12-plus for commercial-parent fintechs where the industry opposition keeps the comment period live.
The Fed payment account / Tier 3 track. This is the regime I covered in detail in the payment account piece. The Board has paused Tier 3 master account decisions through year-end while it finalizes the new payment account framework. It is a narrow policy-development hold on a specific population — uninsured depository institutions and non-bank financial firms seeking direct Reserve Bank payment access. It does not apply to ILC applications. It does not apply to de novo community bank applications. The pause and the payment account framework live entirely inside the Federal Reserve's Account Access Guidelines, not the FDIC's chartering process or the OCC's.
The administration's May 19 executive order touches all three tracks differently. Its 90-day clock runs on agencies to identify regulations that "unduly impede" fintech-bank partnerships, not on individual application decisions at any of the three agencies. Its 180-day clock requires agencies to act. That does not translate into 90-day ILC reviews, and it does not collapse de novo timelines to a quarter.
The Senate passed the 21st Century ROAD to Housing Act 89-10 on March 12, 2026. The trade-press coverage focused — reasonably — on Section 901, which would have banned large institutional investors from purchasing single-family homes and imposed a seven-year forced divestiture. The White House publicly backed the Senate version. House Republicans went the other way and amended Section 901 to add build-to-rent exemptions and drop the divestiture rule. The House passed its amended bill 396-13 on May 20.
Section 901 is what the news cycle has been tracking. The piece that matters for community bank chartering is Title 6.
The Senate's March bill stripped out the community bank package entirely. The House restored it on May 20. Senate concurrence on the House version is now the deciding factor on whether the community bank chartering environment improves materially in 2026 or stays at today's already-improved baseline.
The House's restored Title 6 includes the provisions that actually compound the existing administrative momentum at the OCC and FDIC:
Section 611 — Promoting New Bank Formation. Directs the FDIC, OCC, and Federal Reserve to pilot a two-year phase-in period for capital requirements on de novo community banks under $10 billion, and to allow greater flexibility for those banks to modify approved business plans after charter. The specific glide path — what capital ratios apply in year one versus year two, whether it touches the Community Bank Leverage Ratio or the Tier 1 leverage ratio — is left to the agencies to design through rulemaking. Eligibility is limited to banks chartered between January 1, 2026, and December 31, 2028.
Section 610 — American Access to Banking. Directs federal regulators to streamline the de novo application process and improve coordination between federal and state regulators, including for minority depository institutions and rural banks. This is the statutory backstop to what Gould is already doing administratively.
Sections 601 and 602. Exempt custodial deposits from brokered-deposit classification for well-capitalized institutions under $10 billion and expand the reciprocal deposit exclusion. Material to a de novo's funding model in the first three years.
Sections 603 and 604. Lift the asset threshold for the longer 18-month examination cycle from $3 billion to $6 billion and simplify exams for well-managed institutions under $6 billion.
Taken together, the Title 6 package compounds the Gould-Hill administrative momentum with two-year capital flexibility, lighter brokered-deposit treatment, and a more proportionate exam cadence as a de novo crosses early growth milestones. Senate concurrence with the House Title 6 language is the base case given the 396-13 House margin and substantive overlap with Senate Banking Chair Tim Scott's stated priorities. The Independent Community Bankers of America and the Independent Bankers Association of Texas have both publicly pushed for the Senate to take up the House version.
Three things in the next sixty days.
First, the Senate's calendar for taking up the House-amended H.R. 6644. If Section 901 negotiations stall, Title 6 stalls with it. The community bank trade groups need to keep Title 6 visible as a distinct priority that should not be held hostage to the institutional investor fight.
Second, the OCC's pace through the 18 applications already in the pipeline. The conditional approvals already issued — Erebor Bank, N.A., Augustus Bank, N.A., and the trust charters granted to crypto custody firms — are the operational evidence of whether Gould's 120-day target holds at volume. Three to four additional approvals over the next sixty days would confirm it.
Third, the PayPal and Affirm ILC decisions. PayPal applied in December 2025. Affirm in January 2026. A PayPal decision before October would be the cleanest signal that the administration's chartering velocity push is real at the FDIC, not just the OCC.
For regional banks, the consequence of the chartering environment is twofold. New de novo entrants in your geography are now a more realistic competitive consideration than they have been at any point post-Dodd-Frank. And acquisition pricing for early-stage charters — both de novo and converted ILC — will rise as the pipeline strengthens. The institutions that build a structured view of their local chartering pipeline now will price acquisition opportunities differently than the institutions that wait for the next regulatory cycle.
Three chartering tracks, three different timelines, three different agency mechanics. The Fed Tier 3 pause is a narrow hold that lifts at year-end. ILC compression is real but bounded by dual-regulator review and ICBA opposition. The de novo community bank track is the one with the real strategic momentum and the one whose ultimate shape over the next three years depends on a Senate vote on Title 6 of the 21st Century ROAD to Housing Act.
The institutions that treat this as a single "chartering is faster now" story will get the analysis wrong. The institutions that map each track to its specific regulatory regime, watch the right legislative signal, and position commercial and acquisition strategy against the de novo wave that is now operationally feasible will be the ones who define how community and regional banking looks in 2028.
CCG Catalyst advises community and regional banks, credit unions, fintech companies, and prospective de novo founders on chartering strategy, regulatory engagement, and the operational build-out from application through opening. If your institution is evaluating its position against the current chartering environment, reach out to our team at www.ccgcatalyst.com.
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By: Paul Schaus | Founder & Managing Partner, CCG Catalyst Consulting
Disclaimer: The views expressed in this article represent the perspective of CCG Catalyst Consulting based on our direct experience advising financial institutions. This commentary is intended to stimulate industry discussion and does not constitute legal, accounting, or regulatory advice.
