WASHINGTON — Federal bank regulators unveiled an interim final rule Friday allowing highly rated community banks to qualify for a less-stringent 18-month examination cycle.
In a joint rule, the Federal Reserve, Office of the Comptroller of the Currency and Federal Deposit Insurance Corp. said they would allow banks with less than $1 billion in assets with a 1 or 2 Camels rating to qualify for an 18-month examination cycle rather than a 12-month examination cycle. To date, only banks with less than $500 million in assets qualified for the less-frequent examination cycle.
The Fed said in a statement that the changes would allow an additional 617 banks to qualify for the less-frequent examination schedule, bringing the total number of banks under the 18-month cycle to "nearly 5,000." An additional 26 U.S. branches of foreign banks would also qualify. The agencies will accept comment on the changes for 60 days.
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Comptroller of the Currency Thomas Curry praised the House for passing a bill to raise the asset threshold to qualify for an 18-month exam cycle to institutions with less than $1 billion of assets, and urged the Senate to follow suit.
October 19 -
As if there were not enough unanswered questions about efforts to pass regulatory relief legislation, the sudden turmoil in the Republican House leadership this week adds another fresh layer of uncertainty.
October 9 -
Federal regulators are working to streamline call reports for community banks in response to industry complaints that some of the requirements are unnecessary and increasingly burdensome.
May 29
The rule comes after language was included in the 2015 transportation bill that raised the cap to qualify for the longer exam cycle to $1 billion in assets.
The Fed and other regulators have been working to enact various provisions in the transportation bill in recent days. On Thursday, the Fed announced an interim final rule to revise the interest rules for its dividend payment to member banks, spurred by a controversial provision in the transportation bill that cuts the dividend payment for banks with more than $10 billion in assets from 6% to the lesser of 3% of paid-in capital or one-half of the high yield of the 10-year Treasury note. Banks with less than $10 billion in assets will continue to receive a 6% dividend payment semiannually.
