FDIC approves ICBA-advocated audit threshold adjustments 

The FDIC approved a final rule updating Federal Deposit Insurance Corporation Improvement Act audit and reporting requirements to raise thresholds and account for inflation, as advocated by ICBA. 

Details: Effective Jan. 1, 2026, the final rule will: 

• Increase the Part 363 applicability asset threshold from $500 million to $1 billion. 

• Raise the internal control over financial reporting (ICFR) asset threshold from $1 billion to $5 billion.  

• Apply minimum audit committee requirements to institutions between $1 billion and $5 billion in total assets, up from the current range of $500 million to $1 billion. 

• Increase the threshold for additional audit committee requirements from $3 billion to $5 billion.  

• Update the compensation threshold in Part 363 related to the determination of whether a director is considered “independent of management” from $100,000 to $120,000. 

• Provide for future adjustments indexed to inflation.  

More: The FDIC clarified that a bank does not need to comply with applicable Part 363 requirements in effect as of Dec. 31, 2025, if the bank will not be subject to the requirements under the updated thresholds in effect as of Jan. 1, 2026. 

Impact: 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.   

• ICBA in September led a grassroots campaign calling on the FDIC to raise the threshold for auditor attestation and reporting requirements under the proposal. 

• 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.