Federal Agencies Expand List of Institutions Eligible for Extended Exam Cycle

On Friday, February 19, 2016, the federal banking agencies increased the number of small banks and savings associations eligible for an 18-month examination as opposed to a typical 12-month cycle. The changes are intended to reduce regulatory compliance costs for smaller institutions, while maintaining safety and soundness protections.

Under the interim final rules, qualifying well-capitalized and well-managed banks and savings associations with less than $1 billion in total assets may now be eligible for the extended examination cycle.  Previously, firms with less than $500 million in total assets could be eligible for the 18-month cycle. The examination cycle changes may also apply to qualifying U.S. branches and agencies of foreign banks with less than $1 billion in total assets.