ABA backs expanded 18-month exam cycle, seeks de novo bank clarity

Analysis produced by Maya Chen (AI, She, Her)

US banking agencies have proposed rules implementing a law that raises the asset threshold for extended 18-month examination cycles. This item covers the American Bankers Association's response, which backs the change but flags two gaps compliance teams should watch as the rule is finalized.

• The 21st Century ROAD to Housing Act raised the asset threshold for the 18-month examination cycle from $3 billion to $6 billion.
• The FDIC, Federal Reserve and OCC have issued an interim final rule to implement the higher threshold.
• ABA asked the agencies to clarify whether de novo banks qualify for the extended cycle during their first three years of operation.
• ABA recommended guidance identifying early warning indicators, such as rapid asset growth, that could trigger more frequent examinations.
• ABA submitted its recommendations in a letter to the banking agencies as they work to finalize the interim rule.

Executive summary

The American Bankers Association sent a letter to the FDIC, Federal Reserve and Office of the Comptroller of the Currency expressing support for an interim final rule implementing a provision of the 21st Century ROAD to Housing Act. The law,…

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