Notice of Proposed Rulemaking on Adjusting and Indexing Certain Regulatory Thresholds

Summary:

The Federal Deposit Insurance Corporate (FDIC) is inviting comment on a proposed rule that would amend certain regulatory thresholds in the FDIC’s regulations to reflect inflation, including those related to annual independent audit and reporting requirements. 

Statement of Applicability: The contents of, and material referenced in, this FIL apply to all FDIC-insured financial institutions. The contents of, and material referenced in, this FIL apply to all FDIC-supervised financial institutions, prospective employees of banks, and potential acquirers of failed bank assets.

Highlights:

• FDIC regulations use thresholds, such as total assets, to determine applicability of regulatory requirements and allow the FDIC to differentiate and tailor regulatory requirements based on an institution’s size, risk profile and level of complexity.
• The proposal would amend certain regulatory thresholds in FDIC regulations to reflect inflation and ensure that such thresholds preserve their intended application in real terms over time:
  • Under the proposal, the FDIC would update certain thresholds to reflect historical inflation from the date of initial implementation or the most recent quantitative adjustment.
  • Additionally, the proposal includes an indexing methodology for subsequent, periodic threshold adjustments that would be implemented automatically every two consecutive calendar years based the cumulative change in inflation since the effective date of the rule, or during any intervening calendar year when the cumulative change in inflation since the most recent adjustment is more than 8 percent.
• The proposal is the first of a multi-phase effort to reevaluate thresholds within the FDIC’s regulations. Comments on the proposed rule will be accepted for 60 days after publication in the Federal Register.