Small Banks Score 50% Longer Exam Vacations Starting Now
Published Date: 9/14/2026
Rule
Summary
Starting September 14, 2026, small banks and U.S. branches of foreign banks with less than $6 billion in assets can now enjoy longer breaks between on-site exams—18 months instead of the usual 12! This change means less hassle and more time to focus on serving customers, with no extra costs. The agencies want your thoughts by October 14, 2026, so speak up if you have ideas!
Analyzed Economic Effects
5 provisions identified: 5 benefits, 0 costs, 0 mixed.
18‑Month Exams for 'Outstanding' Small Banks
If your insured depository institution had an "outstanding" composite condition, the Agencies raised the asset cutoff so that institutions with total assets of less than $6,000,000,000 (instead of less than $3,000,000,000) may be examined on an 18‑month on‑site cycle rather than annually. This change is effective September 14, 2026.
Discretionary 18‑Month Exams for 'Good' Rated Banks
The Agencies exercised discretionary authority to allow qualifying insured depository institutions with a composite condition of "good" (as well as "outstanding") and total assets under $6,000,000,000 to be eligible for an 18‑month on‑site examination cycle. The Agencies will apply safety and soundness principles when extending this eligibility.
U.S. Branches/Agencies of Foreign Banks Eligible
Consistent with the International Banking Act, U.S. branches and agencies of foreign banks with total assets of less than $6,000,000,000 may qualify for the 18‑month on‑site examination cycle starting September 14, 2026. The Agencies updated their regulations to reflect this $6 billion threshold.
Cost Savings, One‑Time Updates, and Monitoring
Financial institutions with total assets of $3,000,000,000 or more but less than $6,000,000,000 that qualify for the 18‑month cycle may realize ongoing cost savings and reallocate staff to other activities, though they may incur modest one‑time implementation costs to update calendars and policies. The Agencies said they will continue off‑site monitoring and retain authority to examine institutions more frequently if needed.
How Many More Institutions Qualify
The Agencies estimate the rule increases eligibility by about 188 banks and savings associations (95 FDIC‑supervised, 50 OCC, 43 Board) and about 19 additional U.S. branches/agencies of foreign banks (1 FDIC, 10 OCC, 8 Board), bringing the total that may qualify for an 18‑month cycle to 4,016 institutions.
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Key Dates
Department and Agencies
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