U.S. agencies expand eligibility for community banks’ 18-month exam cycle
Key Takeaways
- •The Federal Reserve Board, FDIC, and OCC jointly issued an interim final rule on September 10, 2026, expanding access to an 18-month on-site examination cycle for community banks.
- •The 21st Century ROAD to Housing Act raised the total-asset threshold for the extended examination cycle from $3 billion to $6 billion.
- •Qualifying small, non-complex institutions can now move from a 12-month to an 18-month examination cycle, lowering the time and resources devoted to supervisory exams.
- •To qualify for the extended cycle, banks must meet statutory criteria, including being well managed and well capitalized, while agencies continue off-site monitoring between examinations.
- •The rule takes effect immediately upon Federal Register publication, applies corresponding changes to U.S. branches and agencies of foreign banks, and remains open to public comments for 30 days.
The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) issued an interim final rule on September 10, 2026, expanding the number of community banks eligible for an 18-month on-site examination cycle.
The agencies said the 21st Century ROAD to Housing Act raised the total-asset threshold for certain supervised institutions from $3 billion to $6 billion to qualify for the extended cycle. The change allows eligible small, non-complex firms to move from a 12-month to an 18-month examination cycle, reducing the time and resources required for examinations at low-risk institutions.
By law, institutions seeking the extended cycle must satisfy specified criteria, including being considered well managed and well capitalized. The interim final rule incorporates the higher asset threshold into the agencies’ regulations for well-rated institutions.
The extended cycle applies to small banks with relatively low-risk profiles. The agencies said they will continue their current supervisory practice of monitoring these institutions off site between scheduled examinations.
The rule also makes corresponding changes to regulations governing the on-site examination cycle for U.S. branches and agencies of foreign banks.
The interim final rule will take effect immediately upon publication in the Federal Register. The agencies will accept comments for 30 days.
The Federal Reserve’s official announcement is available at https://www.federalreserve.gov/newsevents/pressreleases/bcreg20260910a.htm. The related Board memo and Board Votes are also available from the Federal Reserve.
