Updated Manual Introduces New FDIC Examination Schedule

The Federal Deposit Insurance Corporation (FDIC) has updated its Consumer Compliance Examination Manual to include a new FDIC examination schedule for financial institutions, according to an article by Ballard Spahr, LLP. 

This update impacts both Consumer Compliance examinations and Community Reinvestment Act (CRA) evaluations, extending the intervals between full examinations for most banks. The FDIC indicated that these changes are intended to accommodate a shift towards longer review cycles for institutions with strong compliance and CRA performance records.

Under the new framework, financial institutions will now follow examination cycles of 24–36 months, 54–66 months, or 66–78 months, depending on their asset size and Consumer Compliance rating. Previously, institutions could face examinations as often as every 12 months. However, the FDIC confirmed that institutions rated poorly—those with a Consumer Compliance rating of 4 or 5 or a CRA rating of “Needs to Improve” or “Substantial Noncompliance”—can still be examined on a 1- to 12-month schedule. The same applies to institutions rated a 3 for compliance and those with a Substantial Noncompliance Rating for CRA.

Ballard Spahr noted that Section II-12.1 of the manual now incorporates a “mid-point risk analysis” requirement for institutions on the longest examination cycles. For banks on 54–66 or 66–78-month cycles, examiners will assess risk at the midpoint to determine whether a targeted supervisory action, such as a visitation, is warranted.

For compliance officers, the updated FDIC examination schedule rewards strong compliance management by reducing the frequency, but introduces new interim risk monitoring to maintain oversight.