February 2024: Fintech can save the American banking system. Regulators should help

Over the past 40 years total US banking assets expanded > 10x, from ~$2 trillion in 1984 to >$22 trillion in late 2023. During that same period the number of commercial banks in the US has shrunk from ~14k to ~4k. The number of active bank charters has shrunk from ~18k to around 5k over the same time period. This reduction in charters/active banks is primarily M&A driven. During that period, an average of ~350 banks get acquired each year. The consolidation is partly driven by the loosening of geographic restrictions on US banking institutions beginning in the late 70s. In contrast, around 2800 banks have failed in that period, or 70 per year (~2200 of these happened between 1984 and 1994). Most bank failures occur during localized crises (like Texas in the 1980s) or more general recessions. At the same time, fewer charters get issued each year, than the number of acquisitions and failures. Between 2010 and 2022, only 62 new FDIC insured commercial bank charters were issued to de novo

Over the past 40 years total US banking assets expanded > 10x, from ~$2 trillion in 1984 to >$22 trillion in late 2023. During that same period the number of commercial banks in the US has shrunk from ~14k to ~4k. The number of active bank charters has shrunk from ~18k to around 5k over the same time period. This reduction in charters/active banks is primarily M&A driven. During that period, an average of ~350 banks get acquired each year. The consolidation is partly driven by the loosening of geographic restrictions on US banking institutions beginning in the late 70s. In contrast, around 280