The Second Bank of the United States soon ran into trouble. In addition to hostility from farmers and other individuals in the West and South, state banks pitted themselves against the Bank. The state banks and businesses, except for some conservative Northern banks, resented the restrictions and discipline placed on them by the Bank. Some states even wanted to tax the local branches of the Bank of the United States out of existence. The Supreme Court settled that aspect of the dispute, however, when it ruled, in McCulloch v. Maryland (1819), that such taxes were unconstitutional.

In addition to pressure from outside, the Second Bank was threatened by poor internal management and organization, giving out so much credit and printing so much money that it weakened its own financial security. The Second Bank almost went bankrupt in 1819, but was rescued by the appointment of Langdon Cheves as president. After his appointment in march of 1819, one of his first actions was to borrow $2,500,000 from Europe. Cheves completely reorganized the Bank, contracted currency circulation and called in loans. Although this saved the bank, it wreaked havoc on the general economy, which had been weakened by widespread speculation. The crisis culminated in the Panic of 1819.