Examination cycle extension for small banks

Author: Edward Price | Published: 22 Feb 2016

Federal banking agencies have increased the number of small banks and savings associations eligible for an 18-month, rather than 12-month, examination cycle. Counsel in the US consider the move regulatory relief, albeit confined in the year of a presidential election.

The changes, implemented by the Federal Reserve Board (FRB), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC),  should reduce the costs of regulatory compliance for smaller financial institutions in the US.

Previously, financial institutions with less than $500 million in total assets were potentially eligible for the extended 18-month examination cycle. The new threshold, $1 billion, will raise the number of extension-eligible institutions by over 600. The changes can also apply to the US branches and agencies of foreign banks with less than $1 billion in total assets.

Congressman Scott TiptonTo qualify, there is also the expectation that the institutions in...