FDIC to Provide Temporary Relief from Audit and Reporting Requirements
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.
Related Links
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
Featured Experts
Laurent Birade
Advises U.S. and Canadian financial institutions on risk and finance integration, CCAR/DFAST stress testing, IFRS9 and CECL credit loss reserving, and credit risk practices.
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Related Articles
EBA Launches Stress Tests for Banks, Issues Other Updates
The European Banking Authority (EBA) launched the 2023 European Union (EU)-wide stress test, published annual reports on minimum requirement for own funds and eligible liabilities (MREL) and high earners with data as of December 2021.
EBA Proposes Standards for IRRBB Reporting Under Basel Framework
The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.
FED Issues Further Details on Pilot Climate Scenario Analysis Exercise
The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.
US Agencies Issue Several Regulatory and Reporting Updates
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
ECB Issues Multiple Reports and Regulatory Updates for Banks
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
CBIRC Revises Measures on Corporate Governance Supervision
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
HKMA Publications Address Sustainability Issues in Financial Sector
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
EBA Updates Address Basel and NPL Requirements for Banks
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.
