Agencies raise asset threshold for 18-month exam cycle

Federal banking agencies (Office of the Comptroller of the Currency, the Federal Reserve Board, and the Federal Deposit Insurance Corporation) issued an interim final rule last week that doubles the asset threshold for small insured depository institutions to be eligible for an extended 18-month on-site examination cycle.

Eligibility for the 18-month cycle does not apply automatically. To qualify, a bank with fewer than $6 billion in total assets must also:

• Be well capitalized under the prompt corrective action framework;
• Have received a CAMELS management component rating of 1 or 2 at its most recent examination;
• Have received at its most recent examination a composite rating of 1 or, if the IDI has $200 million or less in total assets, 1 or 2;
• Not be subject to a formal enforcement proceeding or order; and
• Not have undergone a change in control during the prior 12-month period.