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Options for delivering financial services:
1. Chartering new (de novo) financial institutions
2.Establishing new full-service branch offices
3. Setting up limited-service facilities
No one can start a major financial firm inside the United States without the express approval of federal or state authoritites and sometimes both.
-Especially true for depository institutions
Government chartering agencies believe financial-service providers need special scrutiny for several reasons
1. they hold the public's savings and unregulated chartering activity might result in poorly capitalized institutions that fail
2. many financial firms are at the heart of the payments process to support trade and commerce, so thier failure could disrupt business acitivty and
3. they often create money (immediate spending power), which suggests that chartering too may might result in excessive money creation and inflation.
Only the banking commissions in each of the 50 states and the Office of the Comprtoller of the Currency (OCC)-a division of the Treasury Department-can issue a charter of incorporation to start a new U.S bank. Generally speaking, federal standards for receiving a bank charter are more rigorous than the rules of the state banking commissions.
-However, organizers often seek a federal bank charter for the added prestige it conveys in the minds of customers, especially large depositors.
Deciding between pursuing a federal or a state charter usually comes down to weighing the benefits and costs of each for the particular bank and location the organizers have in mind.