Financial Institution Letter
FIL-90-2007
October 24, 2007
EXAMINATION CYCLE
Joint Final Rules on Expanded Examination Cycle for Certain
Small Insured Depository Institutions and U.S. Branches and
Agencies of Foreign Banks
Federal Deposit Insurance Corporation
550 17th Street NW, Washington, D.C. 20429-9990
Summary: The FDIC and the other federal financial institution regulatory agencies have jointly
adopted the attached final rules permitting insured depository institutions that have up to
$500 million in total assets, and that meet certain other criteria, to qualify for an 18-month (rather
than 12-month) on-site examination cycle. These changes will allow the agencies to better focus
their supervisory resources on those institutions that may present capital, managerial or other
issues of supervisory concern, while reducing the regulatory burden on small, well-capitalized
and well-managed institutions.
Distribution:
FDIC-Supervised Banks (Commercial and Savings)
Suggested Routing:
Chief Executive Officer
Compliance Officer
Related Topics:
FDIC Rules and Regulations, 12 CFR Parts 337
and 347
Attachment:
Final Rule – Expanded Examination Cycle for
Certain Small Insured Depository Institutions and
U.S. Branches and Agencies of Foreign Banks (72
FR 54347, September 25, 2007)
Contact:
Patricia Colohan, Senior Examination Specialist, at
pcolohan@fdic.gov or 202.898.7283
Highlights:
• The FDIC and the other federal financial
institution regulatory agencies jointly adopted as
final the interim rules issued on April 10, 2007,
that implemented section 605 of the Financial
Services Regulatory Relief Act of 2006 and
related legislation (collectively, the Examination
Amendments).
• The final rule raises from $250 million to $500
million the total asset threshold below which an
insured depository institution may qualify for an
18-month (rather than 12-month) on-site safety
and soundness examination cycle.
• As authorized by the Examination Amendments,
the agencies determined that it is consistent with
safety and soundness to permit institutions that
fall within this expanded total asset threshold,
and that received a CAMELS composite rating of
1 or 2, and that meet other qualifying criteria to
qualify for an 18-month on-site examination
cycle.
• Other qualifying criteria include being well-
capitalized, well-managed, not having undergone
any change in control during the previous 12-
month period, and not being subject to a formal
enforcement proceeding or order.
• The extended 18-month examination cycle
applies similarly to qualifying U.S. branches or
agencies of a foreign bank.
• In all cases, the agencies reserve the right to
examine more frequently if they deem it
necessary.
Note:
FDIC financial institution letters (FILs) may be
accessed from the FDIC's Web site at
www.fdic.gov/news/news/financial/2007/index.html.
To receive FILs electronically, please visit
http://www.fdic.gov/about/subscriptions/fil.html.
Paper copies of FDIC financial institution letters
may be obtained through the FDIC's Public
Information Center (1-877-275-3342 or 703-562-
2200).
FIL-90-2007
October 24, 2007
EXAMINATION CYCLE
Joint Final Rules on Expanded Examination Cycle for Certain
Small Insured Depository Institutions and U.S. Branches and
Agencies of Foreign Banks
Federal Deposit Insurance Corporation
550 17th Street NW, Washington, D.C. 20429-9990
Summary: The FDIC and the other federal financial institution regulatory agencies have jointly
adopted the attached final rules permitting insured depository institutions that have up to
$500 million in total assets, and that meet certain other criteria, to qualify for an 18-month (rather
than 12-month) on-site examination cycle. These changes will allow the agencies to better focus
their supervisory resources on those institutions that may present capital, managerial or other
issues of supervisory concern, while reducing the regulatory burden on small, well-capitalized
and well-managed institutions.
Distribution:
FDIC-Supervised Banks (Commercial and Savings)
Suggested Routing:
Chief Executive Officer
Compliance Officer
Related Topics:
FDIC Rules and Regulations, 12 CFR Parts 337
and 347
Attachment:
Final Rule – Expanded Examination Cycle for
Certain Small Insured Depository Institutions and
U.S. Branches and Agencies of Foreign Banks (72
FR 54347, September 25, 2007)
Contact:
Patricia Colohan, Senior Examination Specialist, at
pcolohan@fdic.gov or 202.898.7283
Highlights:
• The FDIC and the other federal financial
institution regulatory agencies jointly adopted as
final the interim rules issued on April 10, 2007,
that implemented section 605 of the Financial
Services Regulatory Relief Act of 2006 and
related legislation (collectively, the Examination
Amendments).
• The final rule raises from $250 million to $500
million the total asset threshold below which an
insured depository institution may qualify for an
18-month (rather than 12-month) on-site safety
and soundness examination cycle.
• As authorized by the Examination Amendments,
the agencies determined that it is consistent with
safety and soundness to permit institutions that
fall within this expanded total asset threshold,
and that received a CAMELS composite rating of
1 or 2, and that meet other qualifying criteria to
qualify for an 18-month on-site examination
cycle.
• Other qualifying criteria include being well-
capitalized, well-managed, not having undergone
any change in control during the previous 12-
month period, and not being subject to a formal
enforcement proceeding or order.
• The extended 18-month examination cycle
applies similarly to qualifying U.S. branches or
agencies of a foreign bank.
• In all cases, the agencies reserve the right to
examine more frequently if they deem it
necessary.
Note:
FDIC financial institution letters (FILs) may be
accessed from the FDIC's Web site at
www.fdic.gov/news/news/financial/2007/index.html.
To receive FILs electronically, please visit
http://www.fdic.gov/about/subscriptions/fil.html.
Paper copies of FDIC financial institution letters
may be obtained through the FDIC's Public
Information Center (1-877-275-3342 or 703-562-
2200).