Banking agencies raise asset threshold for 18-month exam cycle

The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation (FDIC) jointly issued an interim final rule that raises the total-asset threshold for the extended 18-month on-site examination cycle from $3 billion to $6 billion. The rule, published in the Federal Register of September 14, 2026 (Vol. 91, No. 176, Rules and Regulations), took effect immediately on that date, with comments due by October 14, 2026.

The measure implements section 903 of the 21st Century ROAD to Housing Act, which became law on July 11, 2026, and amends section 10(d) of the Federal Deposit Insurance Act. It allows qualifying insured depository institutions (IDIs) with less than $6 billion in total assets to be examined once every 18 months instead of annually, and makes parallel changes for U.S. branches and agencies of foreign banks consistent with the International Banking Act of 1978.

Who is eligible

To qualify for the extended cycle, an institution must meet strict capital, managerial and supervisory criteria under section 10(d)(4) of the FDI Act:

• Total assets of less than $6 billion;
• A “well capitalized” status under the prompt corrective action framework;
• A composite condition rated “outstanding” (or “good” for institutions with up to $200 million in assets), plus a management rating of “1” or “2” under the CAMELS system;
• No formal enforcement proceeding or order in effect;
• No change in control during the previous 12 months.

The agencies also exercised their discretionary authority under section 10(d)(10) to extend eligibility to qualifying IDIs with an “outstanding” or “good” composite condition and total assets under $6 billion, up from the previous $3 billion ceiling.

Regulatory scope

The interim final rule amends the agencies’ implementing regulations across the Code of Federal Regulations:

• OCC — 12 CFR Part 4 (sections 4.6 and 4.7), covering national banks, Federal savings associations, and Federal agencies and branches;
• Federal Reserve Board — 12 CFR Parts 208 and 211 (Regulation H and Regulation K), covering state member banks and international banking operations;
• FDIC — 12 CFR Parts 337 and 347, covering unsafe and unsound banking practices and examination of foreign bank branches.

The agencies estimate the change will make roughly 188 additional banks and savings associations eligible for the extended cycle (95 supervised by the FDIC, 50 by the OCC, 43 by the Board), plus about 19 additional U.S. branches and agencies of foreign banks, bringing the total number of potentially qualifying institutions to approximately 4,016.

Impact and outlook

The agencies concluded the rule is burden-reducing and issued it without prior notice and comment, finding good cause to align their regulations with the statute and to provide an immediate effective date. They will continue off-site monitoring of institutions in the new asset range and retain authority to examine qualifying institutions more frequently when necessary.

For community and mid-size banking institutions, the change extends the window between on-site examinations by six months, freeing staff and resources for other activities while the agencies focus supervisory attention on institutions presenting greater risk. The rule is identified by docket OCC–2026–0761 (RIN 1557–AF59), Board Docket No. R–1898 (RIN 7100–AH28) and RIN 3064–AG33 for the FDIC.

Source: Federal Register, Vol. 91, No. 176, September 14, 2026, Rules and Regulations, pp. 58009–58014 (official reference: FR Doc. 2026–18766).