The Office of the Comptroller of the Currency ("OCC"), Board of Governors of the Federal Reserve System ("Board"), and Federal Deposit Insurance Corporation ("FDIC") issued a final ruling expanding the examination cycle for certain small banks and U.S. branches of foreign banks.
These regulators had issued an interim rule, effective August 29, 2018, that expanded the number of insured depository institutions ("IDIs") and U.S. branches of foreign banks eligible for an 18-month on-site examination cycle, rather than a 12-month cycle. This applied to qualifying IDIs and U.S. branches and agencies of foreign banks with under $3 billion in total assets. Previously the threshold to qualify for a 12-month cycle was under $1 billion in total assets. After receiving three comment letters in support of these interim rules, the regulators adopted the rule as final without changes in December 2018.
What You Should Know
Although small banks and branches of foreign banks may not experience on-site exams as frequently under this rule, this is not a reason to let compliance programs slip. If an institution has less than a "good" or "outstanding" composite rating, they will no longer qualify for the extended exam cycle.
Qualifying banks should maintain their AML program, policies, and procedures and consider performing an independent model validation in preparation for the next exam.
How ACA Telavance Can Help
ACA Telavance offers the following services that can help you to remain compliant with regulatory mandates:
- AML program assessments
- AML risk assessments
- Review and documentation of policies and procedures
- Model validations For More Information
If you have questions, please contact your regular ACA consultant or email us at firstname.lastname@example.org.