[quote=Allan from Fallbrook][quote=davelj]My guesstimate is that we’ll see two more years of extremely elevated failure figures before they decline to drips and drabs. Painful but necessary.[/quote]

Do you see any opportunities for investors, with the right pedigree, to possibly purchase some of these local banks that are going under?

Reason for the question, I have had some discussions with friends, regarding buying a bank. I understand that the group has to include members who are experienced in banking and have the requisite certifications and background, in order to secure the charter.[/quote]

The problem is that you can’t participate in the FDIC auction process for a failed bank unless you already have a charter. So, that restricts the auction process to relatively healthy banks and investor groups that have a “shelf charter” (that is, they don’t have a bank yet, but they’ve got a charter to start one that avoids their having “de novo” status). Shelf charters are VERY hard to obtain, even more so now that the shit’s hit the fan. In fact, I believe there are less than 10 shelf charters currently (in)active.

So, you could start a “de novo” bank (basically, a start-up bank), but there are two problems. One, the FDIC isn’t allowing de novos to form right now, for all intents and purposes. Second, de novo banks that are less than seven years old can’t participate in the FDIC auctions.

That’s a long way of saying that it’s virtually impossible to either start a bank right now or to purchase a bank from the FDIC unless you’ve already got a bank that’s up and running.