- Key insight: Oregon has become a desert for new banks, with no de novo activity in nearly 20 years.
- Supporting data: The number of state-chartered banks in the state has fallen to 13.
- Expert quote: “I believe it’s the only time in Oregon history where a business tax credit has passed the legislature unanimously.” — Oregon Bankers Association President and CEO Scott Bruun
Facing the prospect of what one banking advocate called a “new bank desert,” Oregon lawmakers have moved to incentivize de novo activity.
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A law signed this month by Democratic Gov. Tina Kotek provides startup banks with up to $1 million in state tax credits annually for three consecutive years to help offset organizing costs.
Oregon’s last de novo bank, Oregon City-based Lewis and Clark Bank, opened in December 2006. Lewis and Clark
The new law, which takes effect in June, “sends a clear signal that Oregon wants community banks,” Bruun told American Banker. It gives prospective organizers and investors “reasons to start having some conversations.”
Those discussions haven’t been happening in Oregon in recent years, according to Bruun.
“Not only do we not have any de novos, there’s been no serious [talk] about starting them,” the trade group CEO said.
To be sure, the de novo banking dearth isn’t just an Oregon phenomenon. The flow of new charters, which routinely topped 100 in the decade preceding the 2008 financial crisis, has since
Across the country, a total of three de novo banks have opened to date in 2026, according to Federal Deposit Insurance Corp. statistics. Four opened in 2025. Six in 2024.
Industry-wide consolidation, as banks that have sold or liquidated have not been replaced by startup institutions, has created banking gaps in markets across the country.
In Oregon, “there are communities … that just don’t have that small community bank where ownership is local, management is local, deposits are local, and the decisions are local,” Bruun said.
“We don’t hatch banks any more,” he added.
Kotek shares those concerns, her press secretary, Luke Harkins, told American Banker Wednesday in a statement. “Community banks are foundational to capital access for small businesses and rural communities,” Harkins wrote. “The new law is a step to encourage and incentivize investment here in Oregon.”
Oregon modeled its legislation on an Ohio law, enacted in 2021, that provided new banks with a three-year tax break. The Buckeye State has since seen the formation of six de novo banks.
Derek Merrin, a former state representative who sponsored Ohio’s law, told American Banker that he was motivated by the banking consolidation his state was experiencing.
“I started work on that bill in June 2020,” said Merrin, a Republican who is running for Congress in Ohio’s 9th congressional district. “In the previous decade, we had 76 community banks close. We only had one open.”
Merrin said he is “excited” that another state is using Ohio’s de novo law as a model.
“The issue we were trying to address in Ohio is a national problem,” Merrin said. “We don’t need three or four banks running the United States. Community banks help inject competition and really serve a lot of small [markets] where the big banks are just never going to open up operations.”
The Ohio Senate passed Merrin’s legislation unanimously, while the House approved it in an 81-1 vote. In Oregon, the de novo tax-credit legislation worked its way through the legislature without a single negative vote, either in committee or in the final House and Senate tallies.
Bruun, who has led the Oregon Bankers Association since 2024 and who served in the Oregon House of Representatives from 2005 to 2011, termed the result “unprecedented.”
“I believe it’s the only time in Oregon history where a business tax credit has passed the legislature unanimously,” Bruun said. “A lot of things separate us, but in the end [lawmakers from both parties] understand and appreciate the need for a good local community bank.”