An extended, 18-month on-site exam cycle will apply to certain banks having assets of less than $6 billion under an interim final rule by the three federal prudential banking regulators.
The Federal Reserve Board, Federal Deposit Insurance Corp. (FDIC), and Office of the Comptroller of the Currency (OCC) announced the interim rule Thursday. The rule implements section 903 of the 21st Century ROAD to Housing Act, which raises from $3 billion to $6 billion the threshold asset size for certain institutions qualified to have their exams every 18 months instead of 12.
Other factors apply as well, including among them that the banks be considered well-managed and well-capitalized, the agencies said.
“The interim final rule incorporates the increase into the agencies’ regulations for well-rated institutions,” they said. “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.”
They said the rule also makes parallel changes to the agencies’ regulations governing the on-site examination cycle for U.S. branches and agencies of foreign banks.
The interim final rule takes effect upon its publication in the Federal Register and will be out for a 30-day public comment period.
Agencies reduce regulatory burden for community banks, increase eligibility for 18-month exam cycle
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