Agencies Extend Examination Cycle for Community Banks

By Jeff Bater

Dec. 12 — Federal regulators issued a final rule making more small lenders eligible for extra time between examinations.

More than 600 additional small banks and thrifts can qualify for an 18-month examination cycle, rather than a 12-month schedule, under the rule by the Federal Deposit Insurance Corp., the Federal Reserve, and the Office of the Comptroller of the Currency.

Well-capitalized and well-managed institutions with assets below $1 billion now qualify for the longer examination cycle; previously, only lenders with assets below $500 million were eligible. The higher threshold brings the number of qualifying lenders to approximately 4,800.

In addition, the final rule increases the number of U.S. branches and agencies of foreign banks that may qualify for an 18-month examination cycle by 30 branches and agencies, to a total of 89.

“The interagency rules are intended to reduce regulatory compliance costs for smaller institutions, while maintaining safety and soundness protections,” the regulators said in a joint news release.

The rule implements a provision tucked into last year’s highway funding bill. Regulators adopted an interim final rule in February and solicited comment. The final rule is identical to the interim rule.

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To contact the editor responsible for this story: Michael Ferullo at

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