Action Item

If your bank has less than $1 billion in total assets and a CAMELS composite rating of 1 or 2, determine if a longer examination cycle is appropriate in connection with your bank's operations.

The New 18-Month Examination Cycle Option

On December 12, 2016, the Federal Deposit Insurance Corporation, the Federal Reserve Board, and the Office of the Comptroller of the Currency issued final interagency rules that now allow financial institutions with less than $1 billion in assets, and a CAMELS rating of 1 or 2, to seek a longer 18-month examination cycle. A link to the announcement can be found here.

Although this longer period may promote operational efficiencies at your bank, a longer exam cycle may not be appropriate if your bank, despite being well-managed and well-capitalized, has unique or non-typical assets or operations.

We Can Help You

We often work with our bank clients to help them prepare for their regulatory exams. Please contact us if you are interested in discussing how these developments might impact your examination life cycle or if you have any questions regarding your upcoming examination, whether under this new program or the existing one.

References

Federal Banking Agencies Finalize Rule Expanding Number of Banks and Savings Associations Qualifying for 18-Month Examination Cycle (December 12, 2016)
https://www.fdic.gov/news/news/press/2016/pr16107.html

• Client Alert - Federal Banking Regulators Expand Banks Eligible for Extended 18-Month Examination Cycle.pdf

Practice Areas

Professionals