Joint Final Rule Extending the Examination Cycle
For U.S. Branches and Agencies of Foreign Banks
The Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency, and the Board of Governors of the Federal Reserve System have adopted the attached rule extending examination cycles for U.S. branches and agencies of foreign banks, which finalizes a joint interim rule that became effective August 28, 1998. The final rule, which can be found in Part 347.214 of the FDIC Rules and Regulations, took effect on October 22, 1999.
The joint final rule provides that a U.S. branch or agency of a foreign bank may be considered for an 18-month examination cycle, rather than a 12-month cycle, if certain criteria are met and no other factors suggest the need for more frequent examination. Comments received on the joint interim rule resulted in minor clarifications of the final regulation.
To be eligible for an extended examination cycle, a U.S. branch or agency of a foreign bank must:
Have total assets of $250 million or less;
Have a composite ROCA supervisory rating of 1 or 2 at its most recent examination;
Meet one of the designated "well-capitalized" criteria;
Not be subject to a formal enforcement action; and
Not have undergone a change in control during the preceding 12-month period.
Other factors may also be considered in determining examination frequency, including certain discretionary standards.
For further information, please contact Vanessa Villalba (202-898-6611) or Karen Walter (202- 898-3540) in the Division of Supervision, or Mark Mellon (202-898-3854) in the Legal Division.
Distribution: FDIC-Supervised Banks (Commercial and Savings)
NOTE: Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 801 17th Street, NW, Room 100, Washington, DC 20434 (800-276-6003 or (703) 562-2200).