Start Your Own Bank (Really)
From August 2005
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Howard Gould, commissioner of the California Department of Financial Institutions, which approves and oversees state-chartered banks, says one of the key things regulators look for during the application process is a board that represents the community with a diversity of community interests beyond banking. The actual day-to-day management team should have sufficiently deep banking experience.
“We like folks who are leaders in the local market, who can help the bank grow, who are looked at as community leaders so the reputation of the bank is significant,” Gould says. “We want somebody, naturally, with a financial background, but we also want people with community backgrounds. We want a nice, varied group of people on the board to give perspective.”
He says the charter application approval process generally takes about two to three months. Very few applications are flatly rejected in the end, he says, simply because regulators try to warn applicants early about problems, and bad applications tend to be withdrawn by applicants who take the hint.
“There’s no point in having somebody go to all that effort and have us say no,” Gould says. “We’d (prefer) they either fix it along the way or they don’t pursue it.”
Banker John DiMichele, who is heading a team proposing a new community bank headquartered in West Sacramento, says the application process involves sorting through almost two feet of paperwork.
Work and Detail
“It’s a substantial amount of work,” says DiMichele. “There’s a lot of detail. There are financial exhibits, there are financial projections. There’s a lot of information on the background of the directors and the organizers. There are a lot of signatures that have to be notarized. There’s a full business plan and full policy statements on the key areas of the bank. There’s fingerprinting. It takes a lot — you just have to keep on it.”
DiMichele is the likely CEO of the proposed Community Business Bank, which will have a second office in Lodi. Starting up two locations at the same time, he says, is even more challenging, but he and his business partner, Chad Meyer, felt they were up for it, having already started one bank.
Continued...
“We like folks who are leaders in the local market, who can help the bank grow, who are looked at as community leaders so the reputation of the bank is significant,” Gould says. “We want somebody, naturally, with a financial background, but we also want people with community backgrounds. We want a nice, varied group of people on the board to give perspective.”
He says the charter application approval process generally takes about two to three months. Very few applications are flatly rejected in the end, he says, simply because regulators try to warn applicants early about problems, and bad applications tend to be withdrawn by applicants who take the hint.
“There’s no point in having somebody go to all that effort and have us say no,” Gould says. “We’d (prefer) they either fix it along the way or they don’t pursue it.”
Banker John DiMichele, who is heading a team proposing a new community bank headquartered in West Sacramento, says the application process involves sorting through almost two feet of paperwork.
Work and Detail
“It’s a substantial amount of work,” says DiMichele. “There’s a lot of detail. There are financial exhibits, there are financial projections. There’s a lot of information on the background of the directors and the organizers. There are a lot of signatures that have to be notarized. There’s a full business plan and full policy statements on the key areas of the bank. There’s fingerprinting. It takes a lot — you just have to keep on it.”
DiMichele is the likely CEO of the proposed Community Business Bank, which will have a second office in Lodi. Starting up two locations at the same time, he says, is even more challenging, but he and his business partner, Chad Meyer, felt they were up for it, having already started one bank.
Continued...
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