The Federal Deposit Insurance Corporation (“FDIC”) recently published a financial institution letter announcing that it updated its Consumer Compliance Examination Manual. According to the FDIC, the updated guidelines will reduce the frequency of consumer compliance examinations and Community Reinvestment Act (“CRA”) evaluations for most FDIC-supervised financial institutions. The updates also include new compliance mid-point risk analysis for certain institutions.
The FDIC typically performs an analysis of institutions it supervises following an initial visitation that occurs within the first 12 months of operation/conversion and a full-scope examination that occurs within the first 24 months. The FDIC then sets an examination cycle for the institution based on its total asset size and a CRA rating that reflects the institution’s level of risk, with adversely rated institutions requiring more frequent supervisory activities (examinations, evaluations or visitations). Under the new guidelines, institutions will generally be placed on an exam cycle of 66-78 months, 54-66 months, or 24-36 months, depending on its asset size. The exam cycle will also be based on the date of the institution’s last joint consumer compliance examination/CRA evaluation.
In addition to publishing the updated manual, the FDIC also published a redline document to make it easier for readers to identify guideline changes.
FDIC Financial Institution Letter | Consumer Compliance Examination Manual | Redline document