Federal banking regulators have increased the asset threshold for small banks to qualify for extended examination cycles under an interim final rule.
The 21st Century ROAD to Housing Act raised the threshold from $3 billion to $6 billion, allowing qualified institutions to extend their on-site examination cycle from 12 months to 18 months. Regulators said the change reduces burden for small, non-complex firms with low-risk profiles.
To qualify for the extended cycle, institutions must be well-managed and well-capitalized. The regulators said they would continue offsite monitoring between scheduled examinations.
The rule takes effect immediately upon publication in the Federal Register, with a 30-day comment period.