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    US Agencies Allow More Banks to Benefit From Onsite Examination Cycle

    August 23, 2018

    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.

     

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    Comment Due Date: FR + 60 Days

    Keywords: Americas, US, Banking, EGRRCP Act, On-site Examination, Insured Depository Institutions, US Agencies

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