The idea of banking drew lots of entrepreneurial activity in the 2000s. With rates declining and real estate soaring, it seemed like easy money, but those new entrants are now failing at above average rates.

The FDIC says new lenders--those who have been insured by the FDIC for less than seven years--have been "over represented'' on the list of institutions that failed since the start of 2008. They now pose an elevated risk. They will be subject to additional scrutiny for the next seven years, according to the Financial Times.

"In particular, new lenders have suffered from rapid growth, over-reliance on volatile funding, including brokered deposits, significant deviations from approved business plans, and weak risk management practices." Of course, the entire industry is paying to clean up the mess. You would have to think a fee hike or special assessment to replenish FDIC's funds will be considered. 

For more:
- here's the FT article

Related Articles:
Can banks weather the commercial real estate storm?
Be wary of rosy bank earnings estimates
Commercial vs. investment banks and leveraged loans