The FDIC proposed raising various regulatory thresholds to account for inflation and to allow future adjustments using an indexing methodology, as advocated by ICBA.
Details:
Advanced by the FDIC board of directors, the proposal would raise and index certain thresholds.
Most notable is the proposed adjustment to Part 363’s thresholds for independent audits and reporting requirements, which would generally be raised from $500 million to $1 billion and from $1 billion to $5 billion.
Comments on the proposed rule will be accepted for 60 days after publication in the Federal Register.
Acting Chair Travis Hill noted that the FDIC continues to reevaluate thresholds within its regulations, including the threshold for the continuous examination program and the current $10 billion threshold for the deposit insurance large bank pricing scorecard.
What It Means for Community Banks: The proposed changes are designed to help provide a more durable regulatory framework by better reflecting inflation and ensuring that thresholds preserve their intended application over time.
ICBA Advocacy:
ICBA has long urged the banking agencies to raise regulatory thresholds, including in response to the Trump administration’s recent call for deregulatory suggestions.
In a May comment letter on deregulation, ICBA called on regulators to adjust various thresholds, including the Part 363 audit and reporting requirement thresholds in the FDIC’s proposal.
In 2021, ICBA urged the FDIC to amend the audit and reporting requirements under Part 363 to permanently raise the asset thresholds that impose unnecessary and costly regulatory burdens upon community banks.
ICBA this week sent a letter to the House Financial Services Committee urging Congress to modernize outdated regulatory thresholds established by the Dodd-Frank Act, which would enable regulators to make further updates that would provide meaningful relief for community banks.