The Federal Deposit Insurance Corp. on Tuesday gave conditional approval for Erebor Bank, backed by billionaire investor Peter Thiel, to receive deposit insurance coverage.
The green light marks another hurdle crossed on the crypto-focused lender’s journey to opening. The Office of the Comptroller of the Currency conditionally approved the Columbus, Ohio-based company’s de novo charter application in October.
As part of Erebor’s agreement with the FDIC, it must have initial paid-in capital totaling at least $276 million and maintain a tier 1 leverage ratio of no less than 12% for its first three years.
Also during its first three years, Erebor must give its primary federal regulator written notice – and obtain non-objection – before making any proposed major deviation or material change from its submitted business plan.
The company must also obtain the FDIC’s written approval for any changes in proposed management or control of 10% or more of the bank’s stock, and it must submit to the FDIC’s Chicago office final employment agreements and compensation arrangements for any of the bank’s directors or senior executive officers.
The deposit insurance approval will expire if the bank does not open within a year, the FDIC said.
The FDIC’s nod for Erebor is one of several advancements regulators have signaled this past week toward the opening of new banks. The OCC conditionally approved five digital asset firms, including Circle, Ripple and Paxos, for de novo national trust bank charters, the regulator announced Friday.
Additionally, the FDIC received an application from payments giant PayPal, which is seeking the agency’s approval to establish a Utah-chartered industrial loan company.
