The Office of the Comptroller of the Currency is hiking the asset threshold for financial institutions to qualify for the 18-month examination cycle.
In accordance with the 21st Century ROAD to Housing Act, the threshold was raised to $6 billion from total assets to qualify for an 18-month on-site exam cycle. Previously, the threshold was $3 billion. So that means approximately 50 additional institutions will be eligible to extend their exam cycles from once every 12 months to once every 18 months.
The longer exam cycle is expected to yield cost savings for these financial institutions and enable them to reallocate resources to other activities.
“The community bank comeback is underway, and today’s action supports that effort by reducing burden for these banks that are vital to the strength of local economies across America, so they can focus more of their time and energy on serving their customers,” Comptroller of the Currency Jonathan Gould said.
The OCC has taken a series of related actions directed at community banks, including tailoring examination scope and frequency in a manner that is consistent with risk-based supervision. It also increased the upper asset range of the community bank supervision portfolio to give them room to grow organically or through acquisition, without facing the increased supervision scrutiny that comes with being a larger bank.
It also updated its guidance to clarify that model risk management should be risk-based, tailored, and commensurate with a bank’s size, complexity, and extent of model use. Further, it simplified licensing requirements and alleviated unnecessary compliance burdens by expanding community banks’ access to expedited or reduced filing procedures.