Bank Board Member Requirements

Please understand that these requirements may look more daunting than they really are. Anyone with a clean financial and legal record who has run a small business, managed a nonprofit, or handled the budget for a church or school is a reasonable candidate, as is anyone with decent understanding of money management and a commitment to what matters to the community. It is up to the California Department of Business Oversight to decide exactly what makes a clean financial record; probably, the older a past financial issue is, the less weight they will put on it.

That being said, here’s what the California state law says about people applying to the California Department of Business Oversight to be directors of a new bank (rewritten to be in English rather than legalese):

1)     Each director has to provide a detailed personal financial statement (the state has a form for this).

2)     Each director has to provide a confidential resume (again, the state has a form for this).

3)     For a private bank, directors have to say how many shares they are buying (and how many shares their families and associates are buying, but that doesn’t apply in our situation.

4)     Each director has to give their commercial banking, trust, other financial, and other business experience, including what they did, what their title was, who they worked for, how long they were there, and why they left.  

5)     Each director has to say whether they have ever been a bank director, officer, employee, advisor, or owned 5% or more of any bank (or worked with a bank in any other capacity. If so, they need to give the name of the bank what their relationship was. If the relationship is current, they need to say whether they intend to continue, change, or end that relationship when the new bank gets started.

6)     Each director needs to say how they intend to serve the new bank and their qualifications to do that. This includes their relationships to “civic, professional, social and other” organizations, and their participation in community affairs. We believe this is much more important for a public bank than for a private bank, and will help balance anything that might be missing from the implied requirements above.

7)     Each director has to say how much time they intend to spend on the duties of the Bank board during the first three years of the bank. We anticipate that this will be about 20 hours/month, and we expect the Bank will pay a reasonable stipend to directors to compensate them for that time.

In addition, the Federal Deposit Insurance Corporation, which must, by law, approve California public banks, has a long and detailed form which prospective directors may need to fill out, but we anticipate that most of the information the form calls for will be already gathered by the time that application is made.