The Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency and the FDIC issued final rules that increase the number of small banks and savings associations that are eligible for an eighteen-month examination cycle. Institutions that do not qualify are subject to a twelve-month cycle. The final rules are identical to the interim final rules, which became effective on February 29, 2016.
Before the interim final rules, only firms with fewer than $500 million in total assets were eligible for the extended examination cycle. The new rules will increase this threshold to $1 billion for qualifying well-capitalized, well-managed banks, savings associations, and U.S. branches or the agencies of foreign banks. The new rules will increase the number of institutions that may qualify for an 18-month examination cycle by more than 600 banks and savings associations.
The banking regulators stated that these rules are intended to "reduce regulatory compliance costs for smaller institutions, while maintaining safety and soundness protections."
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