The FDIC has announced that its Consumer Compliance Examination Manual has been revised to reflect an updated examination schedule for financial institutions. As a result, agency consumer compliance examinations and Community Reinvestment Act (CRA) evaluations will occur less frequently for most institutions, according to the FDIC.
Institutions will generally be on an examination cycle of 66-78 months, 54-66 months, or 24-36 months, depending on the asset size of the institution and its Consumer Compliance Rating. Previously, Consumer Compliance exams could be as frequent as every 12 months, although under the revised schedules institutions with 4 or 5 Consumer Compliance ratings can be examined for compliance on a 1-to-12month schedule, and also examined on such schedule for CRA purposes if they have a Needs to Improve or a Substantial Noncompliance CRA rating. Additionally, institutions with a 3 Consumer Compliance rating and a Substantial Noncompliance CRA rating can be examined on a 1-to-12 month schedule for CRA purposes. The FDIC noted that examination cycles are based on the date of the last joint Consumer Compliance/CRA evaluation.
The agency said that Section II-12.1 of the manual has been revised to reflect the changes. The updated manual also establishes a new compliance mid-point risk analysis for certain institutions.
“For institutions on an examination cycle of 66-78 months or 54-66 months, with no targeted Consumer Compliance examination or CRA evaluation, examiners will conduct a mid-point risk analysis of the institution and determine if an intervening supervisory activity, such as a targeted visitation, is needed,” the FDIC said.
Those institutions rated adversely (institutions not rated a “1” or “2” for Consumer Compliance and “Outstanding” or “Satisfactory” for CRA) will encounter more frequent supervisory examinations, evaluations, or visitations, according to the agency.
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