Effective April 10, the Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and Office of Thrift Supervision (collectively, the Agencies) jointly issued interim rules to implement the Financial Services Regulatory Relief Act of 2006. In particular, the Agencies are amending their respective rules to raise, from $250 million to $500 million, the total asset threshold below which an insured depository institution that meets certain other requirements may qualify for an 18-month (up from 12 months) onsite examination cycle. =
In addition, institutions with between $250 million and $500 million in total assets that received a composite rating of 1 or 2 (under the CAMELS rating system), and that meet certain other criteria, may qualify for an 18-month examination cycle. The relevant Agencies are also making conforming changes to similarly expand the examination cycle (to 18 months) for the U.S. branches and agencies of foreign banks.
In connection with these changes, the Agencies have also made clear that a small institution meets the statutory “well managed” criteria for an 18-month examination cycle (pursuant to Section 10(d) of the Federal Deposit Insurance Act) if the institution has not only a CAMELS composite rating of 1 or 2, but also received a rating of 1 or 2 for the management component of the CAMELS rating at its most recent examination.