Agencies reduce regulatory burden for community banks, increase eligibility for 18-month exam cycle
The Federal Reserve, FDIC and OCC issued an interim final rule on Sept. 10, 2026, that raises the asset threshold allowing more community banks to qualify for an 18-month on-site examination cycle. The change implements a provision of the 21st Century ROAD to Housing Act and applies to well-rated, low-risk institutions while keeping offsite monitoring between exams.
Why It Matters
By doubling the asset threshold from $3 billion to $6 billion, the rule reduces supervisory burden for a larger group of small, non-complex banks that meet statutory safety-and-soundness criteria, freeing time and resources for both institutions and examiners. The agencies will still monitor institutions offsite, and the rule invites public comment for 30 days after publication.
Key Facts
- Date of release: September 10, 2026
- Issuing agencies: Board of Governors of the Federal Reserve System; Federal Deposit Insurance Corporation; Office of the Comptroller of the Currency
- Statutory driver: 21st Century ROAD to Housing Act
- Asset threshold change: Increased from $3 billion to $6 billion
- Exam cycle change: Extended on-site exam cycle eligibility from 12 months to 18 months for certain institutions
Federal banking regulators on Sept. 10, 2026, issued an interim final rule that expands the pool of community banks eligible to receive an 18-month on-site supervisory exam cycle. The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency said the change implements a provision enacted in the 21st Century ROAD to Housing Act.
Under the statutory change, the total assets threshold for qualifying institutions has been raised from $3 billion to $6 billion. That raise permits more small, non-complex banks to move from annual on-site exams to an 18-month schedule, provided they meet statutory eligibility requirements such as being well managed and well capitalized.
The agencies said the interim final rule updates their regulations for well-rated institutions to reflect the higher threshold and clarified that offsite monitoring practices will continue between scheduled on-site exams. The package also makes corresponding amendments to the rules governing the on-site examination cycle for U.S. branches and agencies of foreign banks.
The rule is effective immediately upon publication in the Federal Register, and the agencies will accept public comments for 30 days following publication. The agencies released the interim final rule at 4:00 p.m. EDT on Sept. 10, 2026.
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