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Comment by ballard | Hacker News Reader

So I know this article is BS whining for two reasons:

0. Someone I met acquired the charter of a failing Midwestern local regional bank in order to save a ton of cash on moving funds into the us. This person was under 30 at the time. And it was tax and banking legal considering the law firm.

1. Defensibility of a business model is your friend, not you enemy. Look to how incumbents do it. What can you improve on? Just remember that the harder it is for you the harder it is for everyone else. If it were easy, everyone would do it and the competition would be even more cutthroat elsewhere (patents, distribution, connections, etc.).

To potential investors they probably signaled lack of hustle to find creative solutions to get past their current and all other future dilemmas. Without an unique, defensible, competitive advantage there's really no for an investor to throw down on a venture.

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Regarding (0): could I ask how your acquaintance ended up obtaining the regional bank's charter?

Finding them, contacting them, money, paperwork, lawyers and stickytoitiveness. In the end it saved like a few pct over just paying taxes, but this curly haired Cornell grad doesn't like paying The Man if at all possible. In the end it was a hassle but having something badass seemed worth it to them.

This person also has/had a privacy-oriented domain registrar, so no stranger to putting in the work.

This is fascinating. I hate to ask, but nothing ventured, nothing gained: is there anyway you'd be willing to talk about this more offline? My email address is on my profile.

Assuming kchoudhu is somewhat familiar with the banking space in the US, I think his question is - on what grounds was this individual able to get FDIC/OCC/FRB approval?

Is it that difficult for individuals to get approval? There are tons of small 1-3 branch banks in the US owned by individuals. I would expect it's on par with getting a liquor license or similar, background check and assets check.

Years ago I worked for a bank that was > 75 years old and had recently been bought by a guy who had immigrated to go to college and then in the next 20+ years done very well in construction. As far as I know there was more uproar over him changing the name of the bank than actually buying it.

It is and it isn't - as was stated elsewhere, for example if starting a new bank, regulators will require (and enforce) specific business plans, will limit dividend payments, will limit growth, etc. - there will be a lot of scrutiny on the (proposed) management team and you would find it hard-pressed to be able to get away without having someone with previous bank executive experience. Would imagine for a failed bank there would be similar questions on what is changing with the bank model (which may be as simple as operating with a higher level of equity to support the bank's risk profile).

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