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    FDIC to Provide Temporary Relief from Audit and Reporting Requirements

    October 20, 2020

    FDIC issued an interim final rule to provide temporary relief from the Part 363 Audit and Reporting requirements for insured depository institutions that have experienced temporary growth due to participation in the Paycheck Protection Program (PPP), Paycheck Protection Program Liquidity Facility (PPPLF), Money Market Mutual Liquidity Fund (MMLF), or other factors such as the government stimulus activities. The interim final rule will become effective on the date it gets published in the Federal Register and will remain in effect through December 31, 2021, unless extended by FDIC. Comments on the interim rule will be accepted for 30 days after publication in the Federal Register. In addition, US Agencies (CFPB, FDIC, FED, NCUA, and OCC) proposed a rule that would codify the Interagency Statement Clarifying the Role of Supervisory Guidance issued by the agencies on September 11, 2018. Comments on the proposal will be accepted for 60 days after its publication in the Federal Register.

    Due to recent disruptions in economic conditions, some insured depository institutions have experienced large cash inflows resulting from participation in PPP, MMLF, PPPLF, or factors such as the effects of other government stimulus efforts. The interim final rule will allow insured depository institutions to determine whether they are subject to the requirements of Part 363 of the FDIC regulations for fiscal years ending in 2021 based on the lesser of their consolidated total assets as of December 31, 2019, or consolidated total assets as of the beginning of their fiscal years ending in 2021. Currently, an insured depository institution determines if it is subject to the annual independent audit and reporting requirements of Part 363 based on its consolidated total assets as of the beginning of its fiscal year.

    Notwithstanding any temporary relief provided by this interim rule, an insured depository institution would continue to be subject to any otherwise applicable statutory and regulatory audit and reporting requirements. The interim rule also reserves the authority to require an insured depository institution to comply with one or more requirements of part 363 if the FDIC determines that asset growth was related to a merger or acquisition. Part 363 requires insured depository institutions with assets of USD 500 million or more to obtain annual independent audits and meet related reporting requirements; it also requires assessments of the effectiveness of internal control over financial reporting for insured depository institutions with consolidated total assets of USD 1 billion or more. In addition, Part 363 includes requirements for audit committees at insured depository institutions meeting these thresholds, plus additional audit committee requirements for insured depository institutions with consolidated total assets of USD 3 billion or more.


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    Comment Due Date: FR+30 Days/FR+60 Days

    Effective Date: FR Publication Date

    Keywords: Americas, US, Banking, COVID-19, Reporting, MMLF, Paycheck Protection Program, PPPLF, Credit Risk, Insured Depository Institutions, FDIC, US Agencies

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