The federal banking agencies announced they are raising the asset threshold that certain banks must fall under to qualify for an extended 18-month examination schedule rather than a 12-month schedule.
The 21st Century ROAD to Housing Act, which became law in July, included language raising the asset threshold needed to qualify for the extended examination cycle, from $3 billion to $6 billion. The FDIC, Federal Reserve and Office of the Comptroller of the Currency today announced an interim final rule to implement the provision.
Institutions must also meet certain other requirements to qualify for the 18-month exam cycle, such as being considered well managed and well capitalized.
“The extended cycle applies to small banks with relatively low-risk profiles, but the agencies would continue the current supervisory practice of offsite monitoring between scheduled exams,” the agencies said.
The interim rule will become effective 30 days after publication in the Federal Register.
ABA President and CEO Rob Nichols commended the agencies for advancing the interim rule.
“This action rightly tailors examinations to ensure that smaller banks are subject to levels of supervision that are appropriate to their size and risk profile,” Nichols said. “We appreciate the ongoing efforts by bank regulators to tailor bank regulations in a common-sense way that preserves the safety and soundness of our banking system and enables banks of all sizes to better serve their customers.”
