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Each depositor insured to at least $250,000 per insured bank



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FDIC Federal Register Citations
From: Carl Chatto [mailto:cchatto@maine.rr.com] 
Sent: Tuesday, September 13, 2005 9:44 PM
To: Comments
Subject: Annual Independent Audits and Reporting Requirements RIN 3064-AC91
FEDERAL DEPOSIT INSURANCE CORPORATION

Thank you for allowing me the opportunity to comment on the proposed 
rule making for the Annual Independent Audits and Reporting Requirements.

I am a partner in a regional CPA firm with approximately twenty bank 
clients for which we perform audits. I support the proposed changes in 
their entirety. As cited in the Federal register, increasing the asset 
size threshold to $1 billion would only reduce the coverage from 90% of 
insured institutions to 86% coverage. This coverage ratio is still 
significantly higher than the 75% ratio at the time the Part 363 
requirements were introduced in 1991.

It is important to note that banks falling below this threshold are 
still subject to some review of their internal controls. Regulatory 
safety and soundness examinations will still be conducted at these 
banks. Also, Appendix A to Part 364—Standards for Safety and Soundness 
Part II.B. requires an internal audit function. The OCC and OTS have 
similar requirements.

I would add that time is of the essence as we are approaching the time 
when a number of banks and their independent auditors will need to 
determine whether the Part 363 reporting requirements will apply for 2005.

To avoid this timing issue in the future, I propose that future 
increases to the dollar threshold be incorporated into the regulations 
now, so that the uncertainty can be eliminated. For instance, I suggest 
that a $250 million increase in the threshold be scheduled for every 
five years.

Thank you again for allowing me to comment.


Sincerely,
Carl Chatto


Last Updated 09/14/2005 Regs@fdic.gov

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