Thirteen …
Oregon has only 13 state-chartered banks left (soon to be 12).
In fact, the last bank formed in Oregon was in 2007.
Recognizing this drought, Oregon is making big moves to change that.
Last week, Oregon passed a historic bill to incentivize new banks in the Beaver State.
Here are the details:
- The $3 Million Offer. Forming a bank is expensive. To help grease the skids, Oregon is offering up to $1 million in annual tax credits for the first 3 years of a new bank’s operations. On top of that, any unused tax credits can roll over from year to year.
- Unanimous Support. The bill was passed without a single “no” vote. Both sides of the aisle can agree: The lack and dwindling number of banks in Oregon is a serious problem.
- Hey, That’s a Good Idea! Oregon got the idea from Ohio. Ohio passed a similar law in 2021 –since then, they have seen 6 new banks formed in the Buckeye State.
- Capital Requirements. Forming a new bank requires a lot of upfront capital. Although the FDIC does not have a “set” minimum, it is common to see ranges from $20 million to $40 million. Of course, this minimum will vary depending upon a proposed bank’s business plan, location, and risk profile, among other factors.
- The Approval Process. It can be a long process to obtain regulatory approval to form a new bank and obtain FDIC insurance. In the years following the financial crisis, it was common to see applications take more than 2 years to receive approval. Since then, that processing timeline has shortened significantly. Nowadays, it is common to see approvals within 12 months of filing (and oftentimes less).
Oregon has officially rolled out the red carpet for hungry organizers. On top of that, many believe the regulatory appetite for new banks is the most favorable it has been in years. Keep your eyes peeled for the next generation of founders looking to build the next great Oregon bank.
This article is provided for informational purposes only—it does not constitute legal advice and does not create an attorney-client relationship between the firm and the reader. Readers should consult legal counsel before taking action relating to the subject matter of this article.
