US bank regulators lift 18-month exam-cycle threshold to $6 billion under ROAD to Housing Act

The OCC, Federal Reserve and FDIC have jointly amended the rules governing eligibility for the extended 18-month on-site examination cycle. The change roughly doubles the asset threshold, moving a larger band of well-rated community banks onto a lighter examination schedule. This segment covers who now qualifies, the conditions attached, and the supervisory discretion the agencies have kept.

• Qualifying 1- and 2-rated banks with less than $6 billion in total assets are now eligible for an 18-month, rather than 12-month, examination cycle.
• The prior threshold limited the 18-month cycle to qualifying banks with less than $3 billion in total assets.
• To qualify, a bank must be well capitalized, not subject to a formal enforcement proceeding or order, and not have experienced a change of control in the preceding 12-month period.
• National banks and federal savings associations must have a management rating of 1 or 2 to qualify.
• The OCC retains authority to maintain a 12-month schedule or adopt a more frequent one if it deems it necessary.

Executive summary

The OCC, the Board of Governors of the Federal Reserve System and the FDIC have published an interagency interim final rule amending the regulations governing eligibility for the 18-month on-site examination cycle, pursuant to the 21st Century ROAD to Housing…

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