US Agencies Allow More Banks to Benefit From Onsite Examination Cycle
US Agencies (FDIC, FED, and OCC) issued interim final rules to expand the number of insured depository institutions and U.S. branches and agencies of foreign banks eligible for an 18-month on-site examination cycle. Comments will be accepted for 60 days after publication of the interim final rule in the Federal Register.
As authorized by the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCP Act), the interim final rules generally would allow qualifying insured depository institutions with less than USD 3 billion in total assets to benefit from an extended 18-month on-site examination cycle. The rules also make parallel changes to the agencies' regulations governing the on-site examination cycle for U.S. branches and agencies of foreign banks. Prior to enactment of the EGRRCP Act, only qualifying insured depository institutions and U.S. branches and agencies of foreign banks with less than USD 1 billion in total assets were eligible for an 18-month examination cycle.
Considering the agencies’ off-site monitoring activities; their discretion to examine insured depository institutions more frequently as necessary; and the capital, managerial, and supervisory criteria in section 10(d) of the Federal Deposit Insurance Act, the agencies believe that increasing the maximum asset amount limitation for insured depository institutions from less than USD 1 billion to less than USD 3 billion is consistent with the principles of safety and soundness. The agencies believe that this increase will allow them to better focus their supervisory resources on the insured depository institutions and U.S. branches and agencies of foreign banks (collectively, financial institutions) that may present capital, managerial, or other issues of supervisory concern, and, therefore, has the ability to enhance safety and soundness collectively for all financial institutions. The agencies will continue to monitor financial institutions in this asset range and the impact of the extended examination cycle.
Related Links
Comment Due Date: FR + 60 Days
Keywords: Americas, US, Banking, EGRRCP Act, On-site Examination, Insured Depository Institutions, US Agencies
Related Articles
EBA Publishes Guidelines on Loan Origination and Monitoring
EBA published guidelines on loan origination and monitoring, which bring together prudential standards and consumer protection obligations, along with the anti-money laundering and the Environmental, Social, and Governance (ESG) considerations.
EBA Proposes Revised Standards for Own Funds and Eligible Liabilities
EBA published a consultation paper on the draft amended regulatory technical standards on own funds and eligible liabilities.
EBA Sets Out Supervisory Convergence Plan for 2020
EBA published a report on convergence of supervisory practices in 2019.
PRA Publishes Q&A on Property Valuation Requirements Under CRR
PRA published a set of questions and answers (Q&A) covering common queries regarding residential and commercial property valuations, for the purpose of the Capital Requirements Regulation (CRR), during the period of disruption caused by COVID-19 pandemic.
IOSCO Consults on Outsourcing Principles for Operational Resilience
IOSCO proposed updates to its principles for regulated entities that outsource tasks to service providers.
MAS Consortium to Develop AI Fairness Metrics for Credit Scoring
MAS announced that the first phase of the Veritas initiative will commence with the development of fairness metrics in credit risk scoring and customer marketing.
BoE Updates Definitions for BTL Data Collection
BoE published the Statistical Notice 2020/4 to update the buy-to-let (BTL) Phase 2 and Phase 3 definitions for the Interest Rate Type data item.
FSI Examines Financial Stability Implications of Payment Deferrals
FSI published a brief note that examines challenges facing the banking sector as a result of the payment deferral programs put in place to support borrowers affected by the COVID-19 pandemic.
PRA Finalizes Policy on Prudent Person Principle Under Solvency II
PRA published the policy statement PS14/20, which contains the supervisory statement SS1/20 and the feedback to responses to the consultation paper CP22/19 on expectations for investment by firms in accordance with the Prudent Person Principle, or PPP, as set out in the Investments Part of the PRA Rulebook.
EBA on Extending Large Exposure Limits for French Systemic Banks
EBA published an opinion following the notification by the French macro-prudential authority, the Haut Conseil de Stabilité Financière (HCSF), of its intention to extend a measure introduced in 2018 on the use of Article 458(9) of the Capital Requirements Regulation (CRR).
