New Interagency Rules On Expanded Examination Cycle To Take Effect On January 17, 2017

The OCC, Federal Reserve, and FDIC have published an interagency final rule amending the regulations governing eligibility for the 18-month on-site examination cycle which will take effect on January 17, 2017. 1 and 2 rated national banks, federal savings associations, and federal branches and agencies with less than $1 billion in total assets will now be eligible for an 18-month rather than a 12-month examination cycle.

Section 10(d) of the Federal Deposit Insurance Act generally requires that each insured depository institution undergo a full scope, on-site examination at least once during each 12-month period. This can be a time consuming, expensive and disruptive process for community banks and other institutions. In 2015, the FAST Act was enacted, Public Law 114-94, 129 Stat. 1312 (2015), which authorized bank regulatory authorities to extend the on-site examination cycle for certain insured depository institutions. Prior to the FAST Act and impending rules