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On September 10 the FDIC, Federal Reserve, and OCC issued an interim final rule implementing the 21st Century ROAD to Housing Act’s increase in the asset threshold for the 18-month on-site examination cycle, from $3 billion to $6 billion. The rule took effect on publication, September 14, and comments are due October 14. In the agencies’ words, moving qualifying banks from a 12- to an 18-month cycle “appropriately reduces burden, including time and resources spent, for these low-risk institutions.”
Eligibility is not automatic by size. A qualifying institution must be well capitalized and well managed, carry an “outstanding” or “good” composite rating, not be subject to a formal enforcement proceeding or order, and not have undergone a change in control in the prior 12 months. Offsite monitoring continues between exams.
Who gains the longer cycle
The agencies estimate about 188 more banks and savings associations become eligible, bringing the total that may qualify for an 18-month cycle to 4,016. The rule does not reach credit unions, whose exam schedule is set by NCUA.
Eighteen months between exams means six more months of evidence that the next examiner reads cold. Keep the file ready for an examiner at any time, instead of only in exam season.
- If you are between $3 billion and $6 billion, confirm with your regulator whether your ratings and status put you on the 18-month cycle.
- Re-sequence internal audit and board reporting to the longer cycle rather than letting coverage lapse between exams.
- Remember that eligibility can be lost. A rating downgrade, an enforcement action, or a change in control resets it.
Zovos keeps exam-ready evidence current continuously, so a longer cycle means less disruption. It should not mean a bigger scramble when the entry letter arrives.
This is for information only and is not legal advice. Confirm your examination schedule with your primary regulator.