On September 10, the OCC, the Fed and the FDIC issued an interim final rule implementing section 903 of the 21st Century ROAD to Housing Act (previously covered by InfoBytes here), which raises the total asset threshold from $3 billion to $6 billion for certain institutions to qualify for an 18-month on-site examination cycle rather than the standard 12-month cycle. The law, which became effective July 11, requires qualifying institutions to be well capitalized, well managed, rated “outstanding” or “good” at their most recent examination, not subject to a formal enforcement proceeding, and to have not undergone a change in control in the prior 12 months. The agencies estimated the rule will make approximately 188 additional banks and savings associations eligible for the extended cycle, bringing the total number of qualifying institutions to approximately 4,016. The rule also made parallel changes to examination cycle regulations for U.S. branches and agencies of foreign banks, adding approximately 19 additional eligible entities.

The interim final rule took effect immediately upon publication in the Federal Register without prior notice and comment, with the agencies citing the public interest in promptly aligning their regulations with the statute and reducing regulatory burden on small, well-rated institutions. The agencies stated that extending the cycle by six months for these institutions would not appreciably increase their risk of financial deterioration or failure, noting they will continue off-site monitoring activities and retain authority to examine qualifying institutions more frequently as necessary. Comments on the interim final rule are due by October 14.