FDIC proposes ICBA-advocated threshold adjustments

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• ICBA this week sent a letter to the House Financial Services Committee urging Congress to modernize outdated regulatory thresholds established by the Dodd-Frank Act, which would enable regulators to make further updates that would provide meaningful relief for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.