Economy
Community banks gain access to 18-month exam cycle up to $6 billion
U.S. banking agencies raised the asset threshold for well-managed, well-capitalized community banks to qualify for 18-month exams.
What happened
U.S. federal banking agencies issued an interim final rule expanding eligibility for an 18-month on-site examination cycle. The 21st Century ROAD to Housing Act raised the asset threshold for certain supervised institutions from $3 billion to $6 billion. Eligible banks must remain well managed, well capitalized and relatively low risk. The rule covers small, non-complex firms and preserves offsite monitoring between scheduled examinations. It also makes parallel changes for U.S. branches and agencies of foreign banks. The rule takes effect immediately after publication in the Federal Register, while agencies will accept public comments for 30 days.
Why it matters
Eligible low-risk banks can move from annual on-site examinations to an 18-month cycle, reducing the time and resources spent on regulatory exams. The change extends that relief to institutions with assets between $3 billion and $6 billion that meet the criteria.
Source: U.S. Federal Reserve