Start Your Own Bank (Really)

Community Comments

Long-Term Game Plan 
“I’ve enjoyed it so far,” Ryan says. “We don’t view this as a short-term operation. This is a long-term game plan here. I’m just lucky I’m young and healthy because I’m going to be doing this for a while.”    
     The banking industry is highly regulated, and new charter applications go through a rigorous screening process with the federal and/or state governments, according to banking consultants. The regulators place the business plan and senior officers under strict scrutiny and generally try to flag problems early, says Jim Avery, a San Luis Obispo-based banking consultant.     
     That means half-baked proposals don’t get far before they are shot down, while those that get more than halfway there tend to make it over the finish line, says Avery, who has worked on about 60 applications over 30 years, with only three rejections.     
     “People who are sophisticated realize they can make a great deal of money by starting a bank,” Avery says. For example, he says, he serves as the director of a bank that was started in San Luis Obispo about six years ago. The initial investment of around $2 a share has now climbed to $21 a share.     
     “Particularly considering that it’s a safe investment and your investment is watched over by regulators who are very concerned about the health of the industry. They examine the bank: they go through everything and meet with the directors and tell them what’s going right, and what’s going wrong — mostly what’s going wrong.”  

Looking for Diversity 
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