WASHINGTON – Federal regulators on Monday finalized a rule that lowers the barriers for banks to qualify for extended examination cycles.

The Federal Deposit Insurance Corp., Federal Reserve and Office of the Comptroller of the Currency formally issued the new rule, which allows companies with less than $1 billion in assets to apply for an 18-month examination cycle, instead of the typical 12-month rotation. Previously, only banks with less than $500 million in assets could qualify.

With the revised requirements, an additional 600 banks – or a total of approximately 4,800 institutions -- will be able to apply for the longer examination cycle, the OCC said.

The changes were made based on provisions in the transportation bill passed by Congress last December. The agencies later fast-tracked the process by issuing an interim final rule that was put in effect in February.

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