Federal banking agencies have increased the number of small banks and savings associations eligible for an 18-month examination cycle rather than a 12-month cycle. The changes are intended to reduce regulatory compliance costs for smaller institutions, while still maintaining safety and soundness protections.
Under the interim final rules, qualifying well-capitalized and well-managed banks and savings associations with less than $1 billion in total assets may now be eligible for an 18-month examination cycle, compared with the $500 million threshold previously designated. The examination cycle changes may also apply to qualifying well-capitalized and well-managed U.S. branches and agencies of foreign banks with less than $1 billion in total assets.
The rules increase the number of institutions that may qualify for an 18-month examination cycle by approximately 617, to nearly 5,000 banks and savings associations. In addition, the rules increase the number of U.S. branches and agencies of foreign banks that may qualify for an 18-month examination cycle by 26 branches and agencies, to a total of 89.
Comments will be accepted for 60 days from publication in the Federal Register.