US Federal Banking Agencies Finalize Rule Expanding Examination Cycle for Small Insured Depository Institutions and US Branches and Agencies of Foreign Banks

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The US Federal Deposit Insurance Corporation, Federal Reserve Board and Office of Comptroller of Currency issued interagency final rules that increase the number of small banks and savings associations eligible for an 18-month examination cycle rather than a 12-month cycle. The purpose of the rules is to reduce regulatory compliance costs for smaller institutions, while maintaining safety and soundness protections.

Under the final rules, qualifying well-capitalized and well-managed banks and savings associations with less than $1 billion in total assets are eligible for an 18-month examination cycle. Previously, only firms with less than $500 million in total assets were eligible for extended examination cycle. Qualifying well-capitalized and well-managed US branches and agencies of foreign banks with less than $1 billion in total assets are also eligible.

These rules have been in effect since February 29, 2016, pursuant to interim final rules previously adopted by the agencies. After soliciting comment on interim final rules, the agencies have re-issued them as final rules. Final rules are identical to interim final rules.

View final rules.

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