Expanded Examination Cycle for Certain Small Insured Depository Institutions and U.S. Branches and Agencies of Foreign Banks
Key claim: Small banks and certain U.S. offices of foreign banks with under $6 billion in assets can now qualify for an 18-month on-site exam cycle instead of being examined every year.
Abstract
(Rule · Treasury Department, Comptroller of the Currency, Federal Reserve System, Federal Deposit Insurance Corporation) The OCC, Board, and FDIC (collectively, the Agencies) are jointly issuing and requesting public comment on an interim final rule to implement section 903 of the 21st Century ROAD to Housing Act. The interim final rule raises the asset threshold for certain supervised institutions with less than $6 billion in total assets to qualify for an 18-month on-site examination cycle. The interim final rule also makes parallel changes to the Agencies’ regulations governing the on- site examination cycle for U.S. branches and agencies of foreign banks, consistent with the International Banking Act of 1978 (IBA).
Why this matters
Examination frequency is a core supervisory burden for community banks and foreign bank offices, and raising the 18-month-cycle threshold shifts several hundred institutions out of annual on-site exams. The rule reflects agencies executing a statutory directive rather than exercising independent discretion, but it materially reduces compliance costs at small banks while extending the same relief to qualifying U.S. branches and agencies of foreign banks.