Adopts Amendment to Annual
Audit and Reporting Requirements (Part 363)
6, 1996, the FDIC Board of Directors adopted the attached amendment
to its "Annual Independent Audits and Reporting Requirements" (12
CFR Part 363). The amendment implements various provisions of the
Riegle Community Development and Regulatory Improvement Act of 1994
and provides relief from audit and reporting requirements for certain
sound, well-managed banks. Additional revisions resulted from the
FDIC's own efforts to review its regulations and eliminate unnecessary
requirements. Please forward this letter and its attachments to
the appropriate personnel in your institution.
363 requires each FDIC-insured institution with $500 million or
more in total assets to submit annual reports by management and
an independent public accountant on internal controls and compliance
with designated laws. However, most institutions with less than
$9 billion in total assets may satisfy this reporting requirement
if the parent holding company files these reports on the institution's
provides that if an insured institution has $9 billion or more in
total assets and is highly rated under the interagency rating system,
the institution also can be included in the holding company's reports
on internal controls and compliance instead of having to file its
own reports. This exception is intended to relieve duplicative reporting
requirements for the largest, well-managed institutions that are
subsidiaries of multibank holding companies. Approximately 70 institutions
are affected by this change.
also streamline and reformat specific procedures that independent
accountants must perform to help regulators determine compliance
with designated laws. These changes are expected to provide regulatory
relief for approximately 1,000 FDIC-insured banks and savings associations.
The FDIC has separately asked the Congress to eliminate these specific
procedures as part of a regulatory burden relief proposal.
the FDIC agreed to make reporting less burdensome for 1995 by permitting
institutions to follow the new procedures, the existing regulation,
or the similar procedures issued for public comment last February.
This will help reduce the reporting burden for the vast majority
of institutions that issue reports on a calendar-year basis and
are now in the process of preparing annual reports for 1995. Any
institution with a fiscal year that ends after March 31, 1996, however,
is expected to follow the new rules, which become effective April
that when an insured institution uses the holding company exception
for filing reports on internal controls and compliance, the director
of the FDIC regional supervision office for the state or territory
where the institution is headquartered should receive two copies
of the reports filed, along with a letter identifying all covered
institutions. (A list of FDIC regions and regional office addresses
is attached.) In addition, two copies of any reports should be supplied
to each institution's appropriate federal or state regulator. Any
report filed on an institution-only basis should be sent to the
FDIC region for the institution's main office.
For more information
about these amendments, please contact Doris L. Marsh, an Examination
Specialist in the Division of Supervision at (202) 898-8905.