Bank charter resurgence in a rapidly evolving regulatory landscape

Evolving administrative priorities and a regulatory environment that encourages innovation in the financial services industry have turned the tide on once-stagnant federal bank charter applications. In 2025, more applications were submitted than at any time since 2008, and 2026 is already on track to surpass that number. Fintechs and virtual asset service providers (VASPs) are increasingly seeking bank charters to expand their product and service offerings and reach new markets.  

Launching or reconfiguring a banking institution requires early focus on building the underlying operating model. Key priorities typically include developing governance and staffing structures, defining policies and procedures, mapping processes, establishing risk and control frameworks, and implementing enabling technology and vendor relationships. These foundational elements support critical activities such as product delivery, client onboarding, and account servicing. 

What's driving this renewed charter activity 

The current regulatory environment is a major driver of the recent increase in bank charter applications. A 2026 executive order mandating fintech and digital asset integration into regulatory frameworks and removal of unnecessary regulatory barriers to entry signals a more innovative approach to bank formation. The recently passed 21st Century ROAD to Housing Act includes provisions to streamline the de novo bank application process and reduce the burden on raising capital. And leaders with The Office of Comptroller for Currency and Federal Deposit Insurance Corporation have signaled their commitment to the current administration’s priority of creating a pathway for fintech firms and VASPs to become federally supervised banks.  

As fintechs and VASPs mature, many are re-evaluating partner-driven banking-as-a-service models in pursuit of greater scale, control, and growth. For these firms, a bank charter unlocks growth across deposits, lending, payments, custody, and trading. Many of the organizations driving this resurgence have spent years operating adjacent to the regulated system and are now moving closer to its core. Achieving this transition requires firms to operationalize the commitments set forth in the charter application, meet regulatory expectations, internalize risk and compliance models, and operate under a unified national regulatory framework. 

Key bank charter challenges  

The bank charter process represents a comprehensive transformation requiring organizations to translate strategy into a credible operating model. From application through execution, they must demonstrate business model viability and their capacity for operating compliantly and at scale.  

This journey is particularly complex for fintechs and VASPs moving beyond partner-dependent models because it requires them to internalize capabilities that were historically outsourced. The challenge begins with regulatory approval and extends to building and operationalizing a bank-ready institution. 

Demonstrating a bank-ready operating model 

The bank charter application phase presents a fundamental credibility challenge. An organization must demonstrate that it’s a well-developed institution with a viable business model showing how it will expand access, drive innovation and competition, and protect customers while meeting regulatory requirements. 

Charter applications aren’t viewed as a conceptual proposal. Regulators expect comprehensive plans supported by detailed capital, financial, risk management, and operational frameworks that demonstrate a reasonable likelihood of safe, sound banking operations. Application submissions that lack sufficient detail or fail to verify how products and services will be operationalized risk being deemed “materially deficient” and returned without review.  

For fintechs and VASPs, particularly those built on partner or BaaS models, this represents a step change because it requires them to demonstrate bank-grade governance, compliance programs, and infrastructure that historically may have been outsourced or underdeveloped. 

Building a regulator-ready operating model 

Regulators expect governance, risk management, and compliance capabilities to be operational from day one. Following approval, institutions must quickly translate their application into a functioning bank by implementing governance frameworks, operationalizing key processes, and demonstrating that critical controls work effectively in practice. Those controls include clearly defined board oversight, management accountability, three lines of defense, and comprehensive policies across areas such as BSA/AML, consumer protection, and operational risk. 

For fintechs and VASPs, this often requires bringing previously outsourced capabilities in-house and proving that they can operate as a safe, scalable, sustainable bank. 

Executing a regulator-ready operating model 

The most successful charter programs treat execution as an operating model transformation, not a project plan. From conditional approval through launch, institutions must build and validate the governance, risk, compliance, technology, and operational capabilities required to function as a regulated bank. Regulators increasingly expect these capabilities to operate as an integrated whole rather than as separate workstreams. 

Key areas of focus include: 

• Compliance and risk framework implementation: Operationalizing risk and compliance programs, validating controls, completing independent testing, and demonstrating ongoing monitoring and reporting capabilities 
• BSA/AML, fraud, and financial crimes readiness: Establishing and testing financial crime controls, governance, investigation processes, and regulatory reporting capabilities before launch 
• Third-party selection and oversight: Implementing vendor and partner governance structures, conducting due diligence, defining accountability, and establishing ongoing monitoring processes 
• Technology and data readiness: Validating system integrations, data quality, reporting capabilities, monitoring tools, cybersecurity controls, and technology resilience 
• Governance and organizational readiness: Ensuring operational effectiveness of board oversight, management committees, staffing models, training programs, and issue management processes 
• Regulatory engagement and issue closure: Tracking commitments, managing regulatory feedback, resolving open items, and demonstrating that approval conditions have been fully satisfied 

The goal isn’t simply to launch a bank but to establish a sustainable institution capable of supporting future growth. Achieving that outcome requires governance, risk, compliance, operations, and technology capabilities that function together as a cohesive operating model. 

The renewed interest in bank charters reflects a broader shift in financial services as firms that once operated alongside the banking system are increasingly seeking to operate within it. The organizations that succeed will be those that recognize a charter isn’t simply a regulatory achievement but the foundation for building a resilient, scalable, sustainable banking institution.