On February 19, federal banking agencies increased the number of small banks and savings associations eligible for an 18-month examination cycle rather than a 12-month cycle. The changes are intended to reduce regulatory compliance costs for smaller institutions, while still maintaining safety and soundness protections. Under the interim final rules, qualifying well-capitalized and well-managed banks and savings associations with less than $1 billion in total assets are now be eligible for an 18-month examination cycle. Previously, firms with less than $500 million in total assets could be eligible for the extended examination cycle. The examination cycle changes may also apply to qualifying well-capitalized and well-managed US branches and agencies of foreign banks with less than $1 billion in total assets.

Regulators consider institutions to be well-capitalized and well-managed if they have a composite rating of 1 or 2—the top ratings in the five-point scale indicating the safety and soundness of a bank or savings association. The changes were implemented by the Federal Reserve Board, the Federal Deposit Insurance Corporation and the Office of the Comptroller Currency.

More information is available here.