WASHINGTON—Federal banking regulators have issued interim final rules that expand examination cycles for those small banks and U.S. branches and agencies of foreign banks with less than $3 billion in total assets.
Previously, the bank 18-month on-site examination cycle was only eligible to those qualifying insured depository institutions and U.S. branches and agencies of foreign banks with less than $1 billion in total assets. The final rules were authorized by the Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155). The interim final rules came from the Federal Reserve, FDIC and Office of the Comptroller of the Currency.
Currently, NCUA provides for an extended exam cycle for credit unions who fit the following criteria:
- Assets less than $1 billion
- CAMEL code 1 or 2, in both the composite rating and the management component rating
- "Well capitalized" under prompt corrective action regulations
- No outstanding documents of resolution items related to significant recordkeeping deficiencies
- Not operating under a formal or informal enforcement or administrative order, such as a cease and desist order, letter of understanding and agreement, preliminary warning letter or a prompt corrective action directive
NAFCU Presses NCUA
In its response to the announcement by the FDIC, NAFCU noted it has encouraged NCUA to use its authority to return all healthy and well-run credit unions to an extended exam cycle, regardless of size. NCUA recently outlined some of its exam modernization initiatives in a letter to credit unions and as outlined in the letter, and has said it is currently considering multiple changes to the exam process.