This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents.
Rules and Regulations Federal Register
43961
Vol. 83, No. 168
Wednesday, August 29, 2018
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 4
[Docket ID OCC–2018–0014]
RIN 1557–AE37
FEDERAL RESERVE SYSTEM
12 CFR Parts 208 and 211
[Docket No. R–1615]
RIN 7100–AF09
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Parts 337 and 347
RIN 3064–AE76
Expanded Examination Cycle for
Certain Small Insured Depository
Institutions and U.S. Branches and
Agencies of Foreign Banks
AGENCY: Office of the Comptroller of the
Currency (OCC), Treasury; Board of
Governors of the Federal Reserve
System (Board); and Federal Deposit
Insurance Corporation (FDIC).
ACTION: Joint interim final rules and
request for comments.
SUMMARY: The OCC, Board, and FDIC
(collectively, the agencies) are jointly
issuing and requesting public comment
on interim final rules to implement
section 210 of the Economic Growth,
Regulatory Relief, and Consumer
Protection Act (Economic Growth Act),
which was enacted on May 24, 2018.
Section 210 of the Economic Growth
Act amends section 10(d) of the Federal
Deposit Insurance Act (FDI Act) to
permit the agencies to examine
qualifying insured depository
institutions (IDIs) with under $3 billion
in total assets not less than once during
each 18-month period. Prior to
enactment of the Economic Growth Act,
qualifying IDIs with under $1 billion in
total assets were eligible for an 18-
month on-site examination cycle. The
interim final rules generally would
allow qualifying IDIs with under $3
billion in total assets to benefit from the
extended 18-month examination
schedule. In addition, the interim final
rules make parallel changes to the
agencies’ regulations governing the on-
site examination cycle for U.S. branches
and agencies of foreign banks,
consistent with the International
Banking Act of 1978 (IBA).
DATES: These interim final rules are
effective on August 29, 2018. Comments
on the rules must be received by
October 29, 2018.
ADDRESSES:
OCC: You may submit comments to
the OCC by any of the methods set forth
below. Commenters are encouraged to
submit comments by the Federal
eRulemaking Portal or email, if possible.
Please use the title ‘‘Expanded
Examination Cycle for Certain Small
Insured Depository Institutions and U.S.
Branches and Agencies of Foreign
Banks’’ to facilitate the organization and
distribution of the comments. You may
submit comments by any of the
following methods:
• Federal eRulemaking Portal—
‘‘Regulations.gov’’: Go to http://
www.regulations.gov. Enter ‘‘Docket ID
OCC–2018–0014’’ in the Search Box and
click ‘‘Search.’’ Click on ‘‘Comment
Now’’ to submit public comments.
• Click on the ‘‘Help’’ tab on the
Regulations.gov home page to get
information on using Regulations.gov,
including instructions for submitting
public comments.
• Email: regs.comments@
occ.treas.gov.
• Mail: Legislative and Regulatory
Activities Division, Office of the
Comptroller of the Currency, 400 7th
Street SW, Suite 3E–218, Washington,
DC 20219.
• Hand Delivery/Courier: 400 7th
Street SW, Suite 3E–218, Washington,
DC 20219.
• Fax: (571) 465–4326.
Instructions: You must include
‘‘OCC’’ as the agency name and ‘‘Docket
ID OCC–2018–0014’’ in your comment.
In general, the OCC will enter all
comments received into the docket and
publish the comments on the
Regulations.gov website without
change, including any business or
personal information that you provide,
such as name and address information,
email addresses, or phone numbers.
Comments received, including
attachments and other supporting
materials, are part of the public record
and subject to public disclosure. Do not
enclose any information in your
comment or supporting materials that
you consider confidential or
inappropriate for public disclosure.
You may review comments and other
related materials that pertain to this
rulemaking action by any of the
following methods:
• Viewing Comments Electronically:
Go to http://www.regulations.gov. Enter
‘‘Docket ID OCC–2018–0014’’ in the
Search box and click ‘‘Search.’’ Click on
‘‘Open Docket Folder’’ on the right side
of the screen. Comments and supporting
materials can be viewed and filtered by
clicking on ‘‘View all documents and
comments in this docket’’ and then
using the filtering tools on the left side
of the screen.
• Click on the ‘‘Help’’ tab on the
Regulations.gov home page to get
information on using Regulations.gov.
The docket may be viewed after the
close of the comment period in the same
manner as during the comment period.
• Viewing Comments Personally: You
may personally inspect comments at the
OCC, 400 7th Street SW, Washington,
DC. For security reasons, the OCC
requires visitors to make an
appointment to inspect comments. You
may do so by calling (202) 649–6700 or,
for persons who are deaf or hearing
impaired, TTY, (202) 649–5597. Upon
arrival, visitors will be required to
present a valid government-issued
photo identification and to submit to
security screening in order to inspect
comments.
Board: You may submit comments,
identified by Docket No. R–1615 and
RIN 7100–AF09, by any of the following
methods:
• Agency Website: http://
www.federalreserve.gov. Follow the
instructions for submitting comments at
https://www.federalreserve.gov/apps/
foia/proposedregs.aspx.
• Email: regs.comments@
federalreserve.gov. Include docket
number and RIN in the subject line of
the message.
• FAX: (202) 452–3819 or (202) 452–
3102.
• Mail: Ann E. Misback, Secretary,
Board of Governors of the Federal
VerDate Sep<11>2014 16:05 Aug 28, 2018 Jkt 244001 PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 E:\FR\FM\29AUR1.SGM 29AUR1
sradovich on DSK3GMQ082PROD with RULES
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents.
Rules and Regulations Federal Register
43961
Vol. 83, No. 168
Wednesday, August 29, 2018
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 4
[Docket ID OCC–2018–0014]
RIN 1557–AE37
FEDERAL RESERVE SYSTEM
12 CFR Parts 208 and 211
[Docket No. R–1615]
RIN 7100–AF09
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Parts 337 and 347
RIN 3064–AE76
Expanded Examination Cycle for
Certain Small Insured Depository
Institutions and U.S. Branches and
Agencies of Foreign Banks
AGENCY: Office of the Comptroller of the
Currency (OCC), Treasury; Board of
Governors of the Federal Reserve
System (Board); and Federal Deposit
Insurance Corporation (FDIC).
ACTION: Joint interim final rules and
request for comments.
SUMMARY: The OCC, Board, and FDIC
(collectively, the agencies) are jointly
issuing and requesting public comment
on interim final rules to implement
section 210 of the Economic Growth,
Regulatory Relief, and Consumer
Protection Act (Economic Growth Act),
which was enacted on May 24, 2018.
Section 210 of the Economic Growth
Act amends section 10(d) of the Federal
Deposit Insurance Act (FDI Act) to
permit the agencies to examine
qualifying insured depository
institutions (IDIs) with under $3 billion
in total assets not less than once during
each 18-month period. Prior to
enactment of the Economic Growth Act,
qualifying IDIs with under $1 billion in
total assets were eligible for an 18-
month on-site examination cycle. The
interim final rules generally would
allow qualifying IDIs with under $3
billion in total assets to benefit from the
extended 18-month examination
schedule. In addition, the interim final
rules make parallel changes to the
agencies’ regulations governing the on-
site examination cycle for U.S. branches
and agencies of foreign banks,
consistent with the International
Banking Act of 1978 (IBA).
DATES: These interim final rules are
effective on August 29, 2018. Comments
on the rules must be received by
October 29, 2018.
ADDRESSES:
OCC: You may submit comments to
the OCC by any of the methods set forth
below. Commenters are encouraged to
submit comments by the Federal
eRulemaking Portal or email, if possible.
Please use the title ‘‘Expanded
Examination Cycle for Certain Small
Insured Depository Institutions and U.S.
Branches and Agencies of Foreign
Banks’’ to facilitate the organization and
distribution of the comments. You may
submit comments by any of the
following methods:
• Federal eRulemaking Portal—
‘‘Regulations.gov’’: Go to http://
www.regulations.gov. Enter ‘‘Docket ID
OCC–2018–0014’’ in the Search Box and
click ‘‘Search.’’ Click on ‘‘Comment
Now’’ to submit public comments.
• Click on the ‘‘Help’’ tab on the
Regulations.gov home page to get
information on using Regulations.gov,
including instructions for submitting
public comments.
• Email: regs.comments@
occ.treas.gov.
• Mail: Legislative and Regulatory
Activities Division, Office of the
Comptroller of the Currency, 400 7th
Street SW, Suite 3E–218, Washington,
DC 20219.
• Hand Delivery/Courier: 400 7th
Street SW, Suite 3E–218, Washington,
DC 20219.
• Fax: (571) 465–4326.
Instructions: You must include
‘‘OCC’’ as the agency name and ‘‘Docket
ID OCC–2018–0014’’ in your comment.
In general, the OCC will enter all
comments received into the docket and
publish the comments on the
Regulations.gov website without
change, including any business or
personal information that you provide,
such as name and address information,
email addresses, or phone numbers.
Comments received, including
attachments and other supporting
materials, are part of the public record
and subject to public disclosure. Do not
enclose any information in your
comment or supporting materials that
you consider confidential or
inappropriate for public disclosure.
You may review comments and other
related materials that pertain to this
rulemaking action by any of the
following methods:
• Viewing Comments Electronically:
Go to http://www.regulations.gov. Enter
‘‘Docket ID OCC–2018–0014’’ in the
Search box and click ‘‘Search.’’ Click on
‘‘Open Docket Folder’’ on the right side
of the screen. Comments and supporting
materials can be viewed and filtered by
clicking on ‘‘View all documents and
comments in this docket’’ and then
using the filtering tools on the left side
of the screen.
• Click on the ‘‘Help’’ tab on the
Regulations.gov home page to get
information on using Regulations.gov.
The docket may be viewed after the
close of the comment period in the same
manner as during the comment period.
• Viewing Comments Personally: You
may personally inspect comments at the
OCC, 400 7th Street SW, Washington,
DC. For security reasons, the OCC
requires visitors to make an
appointment to inspect comments. You
may do so by calling (202) 649–6700 or,
for persons who are deaf or hearing
impaired, TTY, (202) 649–5597. Upon
arrival, visitors will be required to
present a valid government-issued
photo identification and to submit to
security screening in order to inspect
comments.
Board: You may submit comments,
identified by Docket No. R–1615 and
RIN 7100–AF09, by any of the following
methods:
• Agency Website: http://
www.federalreserve.gov. Follow the
instructions for submitting comments at
https://www.federalreserve.gov/apps/
foia/proposedregs.aspx.
• Email: regs.comments@
federalreserve.gov. Include docket
number and RIN in the subject line of
the message.
• FAX: (202) 452–3819 or (202) 452–
3102.
• Mail: Ann E. Misback, Secretary,
Board of Governors of the Federal
VerDate Sep<11>2014 16:05 Aug 28, 2018 Jkt 244001 PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 E:\FR\FM\29AUR1.SGM 29AUR1
sradovich on DSK3GMQ082PROD with RULES
43962 Federal Register / Vol. 83, No. 168 / Wednesday, August 29, 2018 / Rules and Regulations
1 Public Law 115–174, 132 Stat. 1296 (2018).
2 12 U.S.C. 1820(d).
3 See section 83001 of the Fixing America’s
Surface Transportation Act (the FAST) Act, enacted
on December 4, 2015. Public Law 114–94, 129 Stat.
1312 (permitting the agencies to examine qualifying
IDIs with under $1 billion in total assets not less
than once during each 18-month period). The
agencies published interim final rules
implementing the FAST Act amendments in
February 2016, and final rules in December 2016.
See 81 FR 10069 (Feb. 29, 2016) and 81 FR 90949
(Dec. 16. 2016), respectively, codified at 12 CFR 4.6
and 4.7 (OCC), 12 CFR 208.64 and 211.26 (Board),
12 CFR 337.12 and 347.211 (FDIC).
4 12 U.S.C. 1820(d)(4) and 1820(d)(10).
5 12 U.S.C. 3105(c)(1)(C).
6 12 U.S.C. 1820(d)(1).
7 The Board, FDIC, or OCC. See 12 U.S.C. 1813(q).
8 IDIs are evaluated under the Uniform Financial
Institutions Rating System (commonly referred to as
‘‘CAMELS’’). CAMELS is an acronym that is drawn
from the first letters of the individual components
of the rating system: Capital adequacy, Asset
quality, Management, Earnings, Liquidity, and
Sensitivity to market risk. CAMELS ratings of ‘‘1’’
and ‘‘2’’ correspond with ratings of ‘‘outstanding’’
and ‘‘good.’’ In addition to having a CAMELS
composite rating of ‘‘1’’ or ‘‘2,’’ an IDI is considered
to be ‘‘well managed’’ for the purposes of section
10(d) of the FDI Act only if the IDI also received
a rating of ‘‘1’’ or ‘‘2’’ for the management
component of the CAMELS rating at its most recent
examination. See 72 FR 17798 (Apr. 10, 2007).
9 The Board and the FDIC, as the appropriate
Federal banking agencies for State-chartered
insured banks and savings associations, are
permitted to conduct on-site examinations of such
IDIs on alternating 12-month or 18-month periods
with an IDI’s State supervisor, if the Board or FDIC,
as appropriate, determines that the alternating
examination conducted by the State carries out the
purposes of section 10(d) of the FDI Act. 12 U.S.C.
1820(d)(3).
Reserve System, 20th Street and
Constitution Avenue NW, Washington,
DC 20551.
All public comments are available from
the Board’s website at http://
www.federalreserve.gov/generalinfo/
foia/ProposedRegs.cfm as submitted,
unless modified for technical reasons or
to remove sensitive personally
identifiable information at the
commenter’s request. Public comments
may also be viewed electronically or in
paper form in Room 3515, 1801 K Street
NW, Washington, DC 20006 between
9:00 a.m. and 5:00 p.m. on weekdays.
FDIC: You may submit comments,
identified by RIN 3064–AE76, by any of
the following methods:
• Agency Website: http://
www.FDIC.gov/regulations/laws/
Federal/. Follow the instructions for
submitting comments on the Agency
website.
• Email: comments@fdic.gov. Include
the RIN 3064–AE76 in the subject line
of the message.
• Mail: Robert E. Feldman, Executive
Secretary, Attention: Comments/Legal
ESS, Federal Deposit Insurance
Corporation, 550 17th Street NW,
Washington, DC 20429.
• Hand Delivery/Courier: Comments
may be hand-delivered to the guard
station at the rear of the 550 17th Street
NW, Building (located on F Street) on
business days between 7:00 a.m. and
5:00 p.m.
Instructions: Comments submitted
must include ‘‘FDIC’’ and ‘‘RIN 3064–
AE76.’’ Comments received will be
posted without change to http://
www.FDIC.gov/regulations/laws/
Federal/, including any personal
information provided.
FOR FURTHER INFORMATION CONTACT:
OCC: Enice Thomas, Senior Advisor
to Senior Deputy Comptroller, Midsize
and Community Bank Supervision,
(202) 649–5420; and Deborah Katz,
Assistant Director, Melissa J. Lisenbee,
Senior Attorney, or Christopher
Rafferty, Attorney, Legislative and
Regulatory Activities Division, (202)
649–5490; for persons who are deaf or
hearing impaired, TTY, (202) 649–5597.
Board: Division of Supervision and
Regulation—Richard Naylor, Associate
Director, (202) 728–5854; Jonathan
Rono, Manager, (202) 721–4568;
Assetou Traore, Supervisory Financial
Analyst, (202) 974–7066; Virginia Gibbs,
Manager, (202) 452–2521; or Alexander
Kobulsky, Supervisory Financial
Analyst, (202) 452–2031; and Legal
Division—Laurie Schaffer, Associate
General Counsel, (202) 452–2277; Mary
Watkins, Attorney, (202) 452–3722; or
Alyssa O’Connor, Attorney, (202) 452–
3886.
FDIC: Policy Branch Division of Risk
Management and Supervision—Thomas
F. Lyons, Chief, Policy and Program
Development, (202) 898–6850, tlyons@
FDIC.gov; Karen J. Currie, Senior
Examination Specialist, (202) 898–3981,
Policy and Program Development,
Division of Risk Management
Supervision; Legal Division—Suzanne J.
Dawley, Counsel, (202) 898–6509.
SUPPLEMENTARY INFORMATION:
I. Background
Enacted on May 24, 2018, section 210
of the Economic Growth Act 1 amended
section 10(d) of the FDI Act 2 to permit
the agencies to examine qualifying IDIs
(generally those IDIs that are well
capitalized and well managed) with
under $3 billion in total assets not less
than once during each 18-month period,
rather than not less than once during
each 12-month period. Prior to the
enactment of the Economic Growth Act,
qualifying IDIs with under $1 billion in
total assets were eligible for an 18-
month on-site examination cycle.3
More specifically, the agencies are
issuing interim final rules to implement
the Economic Growth Act’s
amendments to sections 10(d)(4) and
10(d)(10) of the FDI Act 4 that allow
qualifying IDIs with under $3 billion in
total assets to benefit from the extended
18-month examination schedule. In
addition, the interim final rules make
parallel changes to the agencies’
regulations governing the on-site
examination cycle for U.S. branches and
agencies of foreign banks, consistent
with the IBA.5
Section 10(d)(1) of the FDI Act 6
generally requires the appropriate
Federal banking agency for an IDI 7 to
conduct a full-scope, on-site
examination of an IDI at least once
during each 12-month period. With the
enactment of section 210 of the
Economic Growth Act, section 10(d)(4)
of the FDI Act authorizes the
appropriate Federal banking agency to
extend the on-site examination cycle for
an IDI to at least once during an 18-
month period if the IDI (1) has total
assets of less than $3 billion; (2) is well
capitalized (as defined in 12
U.S.C.1831o (prompt corrective action));
(3) was found, at its most recent
examination, to be well managed 8 and
to have a composite condition of
‘‘outstanding’’ or, in the case of an IDI
with total assets of not more than $200
million, ‘‘outstanding’’ or ‘‘good;’’ (4) is
not subject to a formal enforcement
proceeding or order by the FDIC or its
appropriate Federal banking agency;
and (5) has not undergone a change in
control during the previous 12-month
period in which a full-scope, on-site
examination otherwise would have been
required. Section 10(d)(10) of the FDI
Act gives each appropriate Federal
banking agency discretionary authority
to extend eligibility for an 18-month
examination cycle, by regulation, to
qualifying IDIs with an ‘‘outstanding’’ or
‘‘good’’ composite condition and total
assets not greater than $3 billion, if the
agency determines that this amount
would be consistent with the principles
of safety and soundness for IDIs.9
In addition, section 7(c)(1)(C) of the
IBA provides that a Federal or a State
branch or agency of a foreign bank shall
be subject to on-site examination by its
appropriate Federal banking agency or
State bank supervisor as frequently as a
national or State bank would be subject
to such an examination by the agency.
II. Description of the Interim Final
Rules
The agencies are adopting interim
final rules to implement the Economic
Growth Act’s amendments to sections
10(d)(4) and 10(d)(10) of the FDI Act.
The rules implement section 10(d)(4) of
the FDI Act to increase, from $1 billion
to $3 billion, the total asset threshold
under which an agency may apply an
VerDate Sep<11>2014 16:05 Aug 28, 2018 Jkt 244001 PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 E:\FR\FM\29AUR1.SGM 29AUR1
sradovich on DSK3GMQ082PROD with RULES
1 Public Law 115–174, 132 Stat. 1296 (2018).
2 12 U.S.C. 1820(d).
3 See section 83001 of the Fixing America’s
Surface Transportation Act (the FAST) Act, enacted
on December 4, 2015. Public Law 114–94, 129 Stat.
1312 (permitting the agencies to examine qualifying
IDIs with under $1 billion in total assets not less
than once during each 18-month period). The
agencies published interim final rules
implementing the FAST Act amendments in
February 2016, and final rules in December 2016.
See 81 FR 10069 (Feb. 29, 2016) and 81 FR 90949
(Dec. 16. 2016), respectively, codified at 12 CFR 4.6
and 4.7 (OCC), 12 CFR 208.64 and 211.26 (Board),
12 CFR 337.12 and 347.211 (FDIC).
4 12 U.S.C. 1820(d)(4) and 1820(d)(10).
5 12 U.S.C. 3105(c)(1)(C).
6 12 U.S.C. 1820(d)(1).
7 The Board, FDIC, or OCC. See 12 U.S.C. 1813(q).
8 IDIs are evaluated under the Uniform Financial
Institutions Rating System (commonly referred to as
‘‘CAMELS’’). CAMELS is an acronym that is drawn
from the first letters of the individual components
of the rating system: Capital adequacy, Asset
quality, Management, Earnings, Liquidity, and
Sensitivity to market risk. CAMELS ratings of ‘‘1’’
and ‘‘2’’ correspond with ratings of ‘‘outstanding’’
and ‘‘good.’’ In addition to having a CAMELS
composite rating of ‘‘1’’ or ‘‘2,’’ an IDI is considered
to be ‘‘well managed’’ for the purposes of section
10(d) of the FDI Act only if the IDI also received
a rating of ‘‘1’’ or ‘‘2’’ for the management
component of the CAMELS rating at its most recent
examination. See 72 FR 17798 (Apr. 10, 2007).
9 The Board and the FDIC, as the appropriate
Federal banking agencies for State-chartered
insured banks and savings associations, are
permitted to conduct on-site examinations of such
IDIs on alternating 12-month or 18-month periods
with an IDI’s State supervisor, if the Board or FDIC,
as appropriate, determines that the alternating
examination conducted by the State carries out the
purposes of section 10(d) of the FDI Act. 12 U.S.C.
1820(d)(3).
Reserve System, 20th Street and
Constitution Avenue NW, Washington,
DC 20551.
All public comments are available from
the Board’s website at http://
www.federalreserve.gov/generalinfo/
foia/ProposedRegs.cfm as submitted,
unless modified for technical reasons or
to remove sensitive personally
identifiable information at the
commenter’s request. Public comments
may also be viewed electronically or in
paper form in Room 3515, 1801 K Street
NW, Washington, DC 20006 between
9:00 a.m. and 5:00 p.m. on weekdays.
FDIC: You may submit comments,
identified by RIN 3064–AE76, by any of
the following methods:
• Agency Website: http://
www.FDIC.gov/regulations/laws/
Federal/. Follow the instructions for
submitting comments on the Agency
website.
• Email: comments@fdic.gov. Include
the RIN 3064–AE76 in the subject line
of the message.
• Mail: Robert E. Feldman, Executive
Secretary, Attention: Comments/Legal
ESS, Federal Deposit Insurance
Corporation, 550 17th Street NW,
Washington, DC 20429.
• Hand Delivery/Courier: Comments
may be hand-delivered to the guard
station at the rear of the 550 17th Street
NW, Building (located on F Street) on
business days between 7:00 a.m. and
5:00 p.m.
Instructions: Comments submitted
must include ‘‘FDIC’’ and ‘‘RIN 3064–
AE76.’’ Comments received will be
posted without change to http://
www.FDIC.gov/regulations/laws/
Federal/, including any personal
information provided.
FOR FURTHER INFORMATION CONTACT:
OCC: Enice Thomas, Senior Advisor
to Senior Deputy Comptroller, Midsize
and Community Bank Supervision,
(202) 649–5420; and Deborah Katz,
Assistant Director, Melissa J. Lisenbee,
Senior Attorney, or Christopher
Rafferty, Attorney, Legislative and
Regulatory Activities Division, (202)
649–5490; for persons who are deaf or
hearing impaired, TTY, (202) 649–5597.
Board: Division of Supervision and
Regulation—Richard Naylor, Associate
Director, (202) 728–5854; Jonathan
Rono, Manager, (202) 721–4568;
Assetou Traore, Supervisory Financial
Analyst, (202) 974–7066; Virginia Gibbs,
Manager, (202) 452–2521; or Alexander
Kobulsky, Supervisory Financial
Analyst, (202) 452–2031; and Legal
Division—Laurie Schaffer, Associate
General Counsel, (202) 452–2277; Mary
Watkins, Attorney, (202) 452–3722; or
Alyssa O’Connor, Attorney, (202) 452–
3886.
FDIC: Policy Branch Division of Risk
Management and Supervision—Thomas
F. Lyons, Chief, Policy and Program
Development, (202) 898–6850, tlyons@
FDIC.gov; Karen J. Currie, Senior
Examination Specialist, (202) 898–3981,
Policy and Program Development,
Division of Risk Management
Supervision; Legal Division—Suzanne J.
Dawley, Counsel, (202) 898–6509.
SUPPLEMENTARY INFORMATION:
I. Background
Enacted on May 24, 2018, section 210
of the Economic Growth Act 1 amended
section 10(d) of the FDI Act 2 to permit
the agencies to examine qualifying IDIs
(generally those IDIs that are well
capitalized and well managed) with
under $3 billion in total assets not less
than once during each 18-month period,
rather than not less than once during
each 12-month period. Prior to the
enactment of the Economic Growth Act,
qualifying IDIs with under $1 billion in
total assets were eligible for an 18-
month on-site examination cycle.3
More specifically, the agencies are
issuing interim final rules to implement
the Economic Growth Act’s
amendments to sections 10(d)(4) and
10(d)(10) of the FDI Act 4 that allow
qualifying IDIs with under $3 billion in
total assets to benefit from the extended
18-month examination schedule. In
addition, the interim final rules make
parallel changes to the agencies’
regulations governing the on-site
examination cycle for U.S. branches and
agencies of foreign banks, consistent
with the IBA.5
Section 10(d)(1) of the FDI Act 6
generally requires the appropriate
Federal banking agency for an IDI 7 to
conduct a full-scope, on-site
examination of an IDI at least once
during each 12-month period. With the
enactment of section 210 of the
Economic Growth Act, section 10(d)(4)
of the FDI Act authorizes the
appropriate Federal banking agency to
extend the on-site examination cycle for
an IDI to at least once during an 18-
month period if the IDI (1) has total
assets of less than $3 billion; (2) is well
capitalized (as defined in 12
U.S.C.1831o (prompt corrective action));
(3) was found, at its most recent
examination, to be well managed 8 and
to have a composite condition of
‘‘outstanding’’ or, in the case of an IDI
with total assets of not more than $200
million, ‘‘outstanding’’ or ‘‘good;’’ (4) is
not subject to a formal enforcement
proceeding or order by the FDIC or its
appropriate Federal banking agency;
and (5) has not undergone a change in
control during the previous 12-month
period in which a full-scope, on-site
examination otherwise would have been
required. Section 10(d)(10) of the FDI
Act gives each appropriate Federal
banking agency discretionary authority
to extend eligibility for an 18-month
examination cycle, by regulation, to
qualifying IDIs with an ‘‘outstanding’’ or
‘‘good’’ composite condition and total
assets not greater than $3 billion, if the
agency determines that this amount
would be consistent with the principles
of safety and soundness for IDIs.9
In addition, section 7(c)(1)(C) of the
IBA provides that a Federal or a State
branch or agency of a foreign bank shall
be subject to on-site examination by its
appropriate Federal banking agency or
State bank supervisor as frequently as a
national or State bank would be subject
to such an examination by the agency.
II. Description of the Interim Final
Rules
The agencies are adopting interim
final rules to implement the Economic
Growth Act’s amendments to sections
10(d)(4) and 10(d)(10) of the FDI Act.
The rules implement section 10(d)(4) of
the FDI Act to increase, from $1 billion
to $3 billion, the total asset threshold
under which an agency may apply an
VerDate Sep<11>2014 16:05 Aug 28, 2018 Jkt 244001 PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 E:\FR\FM\29AUR1.SGM 29AUR1
sradovich on DSK3GMQ082PROD with RULES