On February 19, 2016, Federal bank regulators unveiled an interim final rule increasing the number of small banks and savings associations eligible for a less-stringent 18-month examination cycle.
The intentions of this rule change are to reduce regulatory compliance costs for smaller institutions and still maintain safety and soundness protections. A statement by the Fed noted that the changes would allow an additional 617 banks to qualify for the less-frequent examination schedule, bringing the total number of banks under the 18-month cycle to “nearly 5,000.” Additionally, 26 U.S. branches and agencies of foreign banks would also qualify for the rule change.
Previously, banks with less than $500 million in total assess could be eligible for the extended 18-month examination cycle; however, 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. The 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 agencies will accept comments on the change for 60 days.