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Erebor Bank Clears FDIC Hurdle for Launch
19 Dec
Summary
- FDIC approved Erebor Bank on December 16 with specific conditions.
- The bank needs final approval from the OCC before launching.
- Erebor Bank's valuation was reported at $2 billion earlier this year.
Erebor Bank, a finance startup founded by Palmer Luckey and backed by prominent tech investors, has taken a crucial step towards its launch. The Federal Deposit Insurance Corp. granted conditional approval on December 16, imposing a stringent capitalization requirement and mandating that the bank secure commitments for additional funding from investors if triggered.
The bank is still awaiting final clearance from the Office of the Comptroller of the Currency, having received preliminary approval in October. Experts anticipate Erebor Bank could receive its charter to open in early 2026. The FDIC's requirement for a capital-call agreement is noted as unusual but fitting for a business plan involving significant tech and crypto risks.
With a reported valuation of approximately $2 billion and talent drawn from tech and regulatory backgrounds, Erebor Bank is making strides. The FDIC's approval process for Erebor was notably swift, completed in approximately five months, significantly faster than the median application time.
