Starting a bank might sound like easy money, and you'd expect that a lot of people would give it a try. Instead, there only are about 20 applications to start banks in the U.S. each year, according to Carpenter. And just 10 new federally chartered banks opened in the first three quarters of 2019. That's because starting a bank requires a lot of work and money. Typically, the process takes about a year and a half.
At the start, when potential bank founders come in to seek help from Carpenter, he first wants to look at their business plans. "The bottom line when people come in is, does it make sense or not make sense, based on competition and the business plan?" he explains. (From the Banking Law Journal, here's a list of questions that prospective bank owners should be able to answer.)
If it looks as if a new bank has a good chance of success, that's when the complicated part begins. Bank founders need to put together a board of directors to oversee management, and then they have to go out and raise enough capital to fund the bank's operations. We're not talking just taking a loan out of your 401(k), either — this requires serious money. "Most likely at the low end, we're talking about $10 million," Carpenter says. "We just opened a bank in New York for which they raised $130 million."
------ “There is no fate that cannot be surmounted by scorn.” -Albert Camus