Regulators expand 18-month exam program

Today the FDIC, OCC, and Federal Reserve Board adopted interim final rules that expand the availability of the 18-month exam cycle to hundreds of additional community banks. Under the current rules, banks with assets of less than $500 million and a CAMELS composite rating of 1 or 2 are eligible for an 18-month exam cycle instead of a 12-month exam cycle. The new rules allow banks with assets of less than $1 billion to take advantage of the 18-month exam cycle if they have a CAMELS rating of 1 or 2.

In addition to the asset limitations and required CAMELS rating, banks must meet additional eligibility requirements under the existing rules and the new rules. Specifically, the bank must be well-capitalized, must not be subject to any enforcement proceeding or formal order, and cannot have undergone a change in control in the preceding 12 months.

Under the new rules, an additional 600 banks will be eligible for an 18-month exam cycle, taking the total number of eligible institutions to nearly 5,000.

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