HR4478-119

What This Bill Does

This bill amends section 10(d) of the Federal Deposit Insurance Act, which governs examination cycles for well-managed insured depository institutions. It changes two references from $3,000,000,000 to $6,000,000,000. In practice, that raises the asset threshold for institutions that may qualify for the tailored or extended examination-cycle treatment in those paragraphs.

Who Benefits and How

Well-managed insured depository institutions between $3 billion and $6 billion in assets benefit because more of them can qualify for the less frequent examination cycle. Community bank executives benefit from reduced examination disruption and lower supervisory preparation costs. Bank compliance officers benefit because fewer full on-site examinations can reduce document production and staff time. Bank customers may benefit indirectly if management spends less time on examination logistics and more time on lending and services.

Who Bears the Burden and How

FDIC supervision staff, Federal Reserve supervision staff, and Office of the Comptroller of the Currency supervision staff must apply the higher threshold and adjust examination scheduling. Consumer compliance advocates bear oversight risk if less frequent exams miss problems at institutions between $3 billion and $6 billion in assets. Congressional banking staff must monitor whether the expanded threshold preserves safety and soundness.

Key Provisions

• Modifies Federal Deposit Insurance Act examination-cycle thresholds for well-managed institutions.
• Raises the relevant asset threshold from $3 billion to $6 billion.
• Provides tailored supervisory treatment to additional smaller insured depository institutions.