Rule2025-21914
Adjusting and Indexing Certain Regulatory Thresholds
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Published
December 4, 2025
Effective
January 1, 2026
Issuing agencies
Federal Deposit Insurance Corporation
Abstract
The Federal Deposit Insurance Corporation (FDIC) is adopting this final rule to amend certain regulatory thresholds in the FDIC's regulations to reflect inflation. Specifically, this final rule generally updates such thresholds to reflect inflation from the date of initial implementation or the most recent adjustment and provides for future adjustments pursuant to an indexing methodology. The changes set forth in this final rule preserve the level of certain thresholds set forth in the FDIC's regulations in real terms, thereby avoiding the undesirable and unintended outcome where the scope of applicability for a regulatory requirement changes due solely to inflation rather than actual changes in an institution's size, risk profile, or level of complexity.
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[Federal Register Volume 90, Number 231 (Thursday, December 4, 2025)]
[Rules and Regulations]
[Pages 55789-55812]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-21914]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 90, No. 231 / Thursday, December 4, 2025 /
Rules and Regulations
[[Page 55789]]
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Parts 303, 314, 335, 340, 347, 363, and 380
RIN 3064-AG15
Adjusting and Indexing Certain Regulatory Thresholds
AGENCY: Federal Deposit Insurance Corporation.
ACTION: Final rule.
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SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is adopting
this final rule to amend certain regulatory thresholds in the FDIC's
regulations to reflect inflation. Specifically, this final rule
generally updates such thresholds to reflect inflation from the date of
initial implementation or the most recent adjustment and provides for
future adjustments pursuant to an indexing methodology. The changes set
forth in this final rule preserve the level of certain thresholds set
forth in the FDIC's regulations in real terms, thereby avoiding the
undesirable and unintended outcome where the scope of applicability for
a regulatory requirement changes due solely to inflation rather than
actual changes in an institution's size, risk profile, or level of
complexity.
DATES:
Effective date: The final rule is effective January 1, 2026.
Applicability dates: An insured depository institution (IDI) need
not comply with the applicable 12 CFR part 363 requirements in effect
as of December 31, 2025, if the IDI will not be subject to such 12 CFR
part 363 requirements under the updated thresholds in effect as of
January 1, 2026, as specified in this final rule.
FOR FURTHER INFORMATION CONTACT: Andrew Carayiannis, Chief, Policy &
Risk Analytics Section; Bryan Jonasson, Deputy Chief Accountant;
Kimberly Krizanovic, Senior Accounting Policy Analyst; Keith
Bergstresser, Senior Policy Analyst; Lauren Brown, Senior Policy and
Risk Analyst; Jim Yu, Senior Policy and Disclosure Analyst; Rachel
Romm-Nisson, Risk Analytics Specialist, Capital Markets and Accounting
Policy Branch, Division of Risk Management Supervision; Christopher
Blickley, Counsel, Legal Division; Michelle Mire, Senior Attorney,
Legal Division; Robert Meiers, Senior Attorney, Legal Division; Nathan
Raygor, Senior Attorney, Legal Division; Ryan Tetrick, Deputy Director,
Division of Complex Institution Supervision and Resolution; Alex
Greenberg, Assistant Director, Division of Resolutions and
Receiverships; <a href="/cdn-cgi/l/email-protection#533032233a27323f3e3221383627201335373a307d343c25"><span class="__cf_email__" data-cfemail="b6d5d7c6dfc2d7dadbd7c4ddd3c2c5f6d0d2dfd598d1d9c0">[email protected]</span></a>, (202) 898-6888; Federal Deposit
Insurance Corporation, 550 17th Street NW, Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
A. Background
B. Considerations and Policy Objectives for Updating and
Indexing Thresholds
C. Overview of the Proposal
II. Overview of Comments Received
A. In General
B. Expected Effects
C. Indexing Methodology
D. Effective Date
E. Other Comments
III. Final Rule and Discussion of Comments
A. Initial Updates
1. 12 CFR part 303 (Part 303)--Filing Procedures
2. 12 CFR part 335 (Part 335)--Securities of State Nonmember
Banks and Savings Associations
3. 12 CFR part 340 (Part 340)--Restrictions on Sale of Assets of
a Failed Institution by the Federal Deposit Insurance Corporation
4. 12 CFR part 347 (Part 347)--International Banking
5. 12 CFR part 363 (Part 363)--Annual Independent Audits and
Reporting Requirements
i. Background
ii. Overview of Proposed Asset Threshold Updates in Part 363
iii. Comments on Part 363
iv. Response to Comments on Part 363
v. Final Rule
6. 12 CFR part 380 (Part 380)--Orderly Liquidation Authority
7. Additional Thresholds
8. Effective Date of Initial Threshold Updates
9. Alternatives for Threshold Application
B. Indexing Methodology for Future Threshold Adjustments
1. Description of Proposed Methodology
i. Comments on the Proposed Methodology
ii. Response to Comments on the Proposed Methodology
2. Alternatives to the Proposed Indexing Methodology
i. Alternative Measures of Indexing: Other Price Indices
ii. Alternative Measures of Indexing: Gross Domestic Product
ii. Alternative Measures of Indexing: Other Measures
iv. Adjustment Frequency Within the Indexing Methodology
v. Degree of Automation in Indexing
3. Final Rule--Indexing Methodology
i. Indexing Methodology, In General
ii. Effective Date and Timing of Future Adjustments
IV. Economic Analysis
A. Expected Scope of Impact
B. Estimates of the Number of Directly Affected Entities
C. Costs and Benefits of the Final Rule
D. Overall Assessment
V. Administrative Law Matters
A. Administrative Procedure Act
B. Congressional Review Act
C. Paperwork Reduction Act
D. Regulatory Flexibility Act Analysis
E. Plain Language
F. Riegle Community Development and Regulatory Improvement Act
of 1994
G. Executive Orders 12866 and 13563
H. Executive Order 14192
I. Introduction
A. Background
Various regulations promulgated by the FDIC use thresholds to
determine their scope of applicability. The most common threshold is
the amount of total on-balance sheet assets of an institution (measured
in dollars), which has long served as a proxy for an institution's
size.\1\ In some cases, asset-based thresholds are combined with other
thresholds to serve as proxies for an institution's risk profile or
level of complexity, such as the amount of off-balance sheet exposures
or cross-jurisdictional activities.\2\ Combining thresholds in this
manner allows for a regulatory framework that is tailored to the risks
presented by an individual institution or categories of
institutions.\3\
[[Page 55790]]
Additionally, while most thresholds set a general level of
applicability for a regulation, in some instances, thresholds establish
exclusions, provide for optionality, or tailor individual requirements
within a broad-based regulation to the varying sizes, risk profiles,
and levels of complexity of in-scope institutions.
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\1\ See, e.g., 12 CFR 337.12(b) (classifying institutions with
less than $3 billion in assets as small for examination cycle
purpose); 12 CFR 324.2 (providing definitions for Category II and
III FDIC-supervised institutions).
\2\ See, e.g., 12 CFR 329.3.
\3\ For example, for large financial institutions with total
assets of $100 billion or more, capital and liquidity requirements
increase in stringency based on measures of size, cross-
jurisdictional activity, weighted short-term wholesale funding,
nonbank assets, and off-balance sheet exposure. See 12 CFR 252.5, 12
CFR 238.10.
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Under the FDIC's regulations, most thresholds are static, with no
mechanism for periodic adjustments over time. To change a static
threshold, the FDIC must, in general, provide notice and seek comment
on any such change before it can be implemented as final.\4\ Certain
thresholds within the FDIC's regulations are required by statute and
therefore cannot be changed without legislative amendments.\5\
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\4\ 5 U.S.C. 553(b), (c).
\5\ See, e.g., 12 U.S.C. 5365(i)(2)(A), which generally requires
financial companies to conduct periodic stress tests if their total
consolidated assets are greater than $250 billion. Pursuant to this
statutory language, the FDIC's regulations reiterate this $250
billion threshold at 12 CFR 325.2(c).
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The FDIC has occasionally revised discretionary regulatory
thresholds or established a mechanism within a regulation to allow for
adjustments on a periodic basis. For example, 12 CFR part 345, which
implements the Community Reinvestment Act,\6\ defines small and
intermediate-small banks by reference to asset-size criteria expressed
in dollar amounts, which are adjusted annually based on the year-to-
year change in inflation through a Federal Register notice.\7\
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\6\ 12 U.S.C. 2901 et seq.
\7\ Specifically, this adjustment corresponds to the average of
the Consumer Price Index for Urban Wage Earners and Clerical
Workers, not seasonally adjusted, for each 12-month period ending in
November, with rounding to the nearest million. See Community
Reinvestment Act Regulations Asset-Size Thresholds, 89 FR 106480,
106481 (Dec. 30, 2024).
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B. Considerations and Policy Objectives for Updating and Indexing
Thresholds
As discussed above, the use of applicability thresholds allows the
FDIC to differentiate and tailor regulatory requirements based on an
institution's size, risk profile, and level of complexity. However,
static dollar-based thresholds can lead to unintended policy
consequences if threshold levels are not periodically updated or
indexed to inflation. For example, smaller and mid-size institutions
can become subject to asset-based requirements originally intended for
relatively larger institutions solely as a result of growth in price
levels, thereby increasing burden for reasons unrelated to changes in
their inflation-adjusted size or risk profile.
Modifications to regulatory thresholds can be made in several ways
in order to help preserve their intended application and policy
objectives. A threshold may be periodically updated through ad-hoc
review, for example, as a one-time update without pre-determining any
additional, automatic future adjustments. Such an approach would help
to preserve the threshold's intended application since it was first
implemented or most recently amended but would not efficiently provide
for preservation of the intended threshold level over time. Separately,
a regulatory threshold may be automatically adjusted in future periods,
for example, through periodic adjustments using a pre-determined
indexing methodology based on a certain factor, such as inflation.
Automatic adjustments in this way would more efficiently and
transparently preserve a threshold's intended application and maintain
alignment with intended policy objectives over time. However, if not
properly structured for future periods, index-based adjustments can
lead to unintended and undesirable outcomes. For example, adjusting
regulatory thresholds too frequently and in the absence of meaningful
changes in the chosen index can result in inefficiencies, as
institutions may incur costs to frequently review their practices to
reflect adjusted thresholds. By contrast, infrequent adjustments also
result in larger, less gradual adjustments that can impair the
certainty and predictability of a regulatory framework and create
challenges for regulatory compliance and balance sheet management
practices.
Properly structured, appropriately sequenced and predictable
threshold adjustments promote consistent application of regulatory
requirements over time and contribute to a more durable regulatory
framework. In addition, such adjustments can enhance transparency and
certainty by providing institutions with a pre-determined schedule for
future regulatory changes and therefore allow for more enhanced balance
sheet management practices.
C. Overview of the Proposal
On July 28, 2025, the FDIC published a notice of proposed
rulemaking (the proposal) in the Federal Register that proposed to
update and, in the future, adjust certain regulatory thresholds in the
FDIC's regulations to reflect inflation and certain other
considerations.\8\ Under the proposal, the FDIC would initially update
such thresholds to reflect historical inflation \9\ (which would be
measured as the percentage change in the non-seasonally adjusted
Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-
W)),\10\ generally based off the date of initial implementation or the
most recent quantitative adjustment. Additionally, the proposal would
implement an indexing methodology for subsequent, periodic adjustments
for most thresholds that would be effectuated automatically every two
consecutive years or during any intervening year when the cumulative
change in CPI-W since the last adjustment increases by more than 8
percent.\11\
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\8\ 90 FR 35449 (July 28, 2025).
\9\ Certain thresholds under the proposal would be updated
initially to reflect other considerations. For example, as discussed
in section III.A.5 of this SUPPLEMENTARY INFORMATION, the proposal
would initially update thresholds in 12 CFR part 363 to help ensure
sound financial management of the institutions posing the greatest
potential risk to the Deposit Insurance Fund. 70 FR 71226, 71227
(Nov. 28, 2005).
\10\ The U.S. Bureau of Labor Statistics publishes the CPI-W on
a monthly basis. The CPI-W is used to annually adjust benefits paid
to Social Security beneficiaries and Supplemental Security Income
recipients. U.S. Social Security Administration, CPI for Urban Wage
Earners and Clerical Workers, available at <a href="http://www.ssa.gov/oact/STATS/cpiw.html">www.ssa.gov/oact/STATS/cpiw.html</a>.
\11\ Any references to inflation in this final rule refer to
inflation as measured under the CPI-W, unless specifically noted
otherwise.
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The FDIC noted in the proposal that the proposal was the first of a
multi-phase effort to reevaluate thresholds within the FDIC's
regulations, and that the FDIC expects to solicit comment on one or
more future proposals to update and adjust additional thresholds.
As discussed in the sections that follow, the FDIC proposed to
initially update and thereafter periodically adjust certain thresholds
in the following FDIC regulations:
<bullet> 12 CFR part 303--Filing Procedures
<bullet> 12 CFR part 335--Securities of Nonmember Banks and State
Savings Associations
<bullet> 12 CFR part 340--Restrictions on Sale of Assets of a Failed
Institution by the Federal Deposit Insurance Corporation
<bullet> 12 CFR part 347--International Banking
<bullet> 12 CFR part 363--Annual Independent Audits and Reporting
Requirements
<bullet> 12 CFR part 380--Orderly Liquidation Authority
II. Overview of Comments Received
A. In General
The FDIC received over 100 comment letters on the proposal for
updating and indexing certain regulatory thresholds,
[[Page 55791]]
predominantly from community banking institutions, but also from
industry and trade groups representing the banking and financial
services industry, accounting firms, public policy and public interest
organizations, financial services firms, a law firm, a professional
organization of financial regulators, and individuals.
The comments received generally expressed support for the proposal,
in particular comments received from community banking institutions.
Commenters generally supported the proposed updates to certain
regulatory thresholds, with many indicating such updates would provide
a meaningful benefit through reduced regulatory burden. In addition,
many commenters supported the proposed indexing methodology to adjust
thresholds according to changes in inflation in future periods. While
some commenters advocated for changes to specific aspects of the
proposed indexing methodology, many were supportive of a mechanism to
adjust thresholds in future periods generally.
The majority of the comments pertained to part 363 thresholds with
most commenters generally supportive of the proposed updates to those
thresholds, indicating the proposed changes would result in material
cost savings to their institutions and allow for more efficient use of
bank resources. A summary of comments related to part 363 thresholds is
provided in section III.A.5 of this SUPPLEMENTARY INFORMATION, below.
Commenters also expressed a view that the proposed updates would
not come at the expense of safety and soundness, as increases in asset
size have primarily been a result of factors such as inflation,
industry changes, and a pandemic-related surge in deposits, rather than
material changes in risk profile and complexity of activities. Several
commenters requested that considerations be made regarding timing,
including the effective date and retroactive application.
B. Expected Effects
In general, many commenters indicated the proposal would positively
affect their institutions or the banking industry broadly. Many
commenters indicated that cost savings from reduced 12 CFR part 363
compliance costs would be reinvested into innovation, technology,
lending to the local community, and customer experience. Some
commenters stated that failing to index thresholds would constrain
intuitions' strategic growth decisions and would allow regulatory
requirements to extend far beyond their original policy scope. One
commenter asserted that updating and indexing thresholds reduces
regulatory burden on smaller institutions while allowing supervisory
focus to remain on larger, systemically significant entities.
Commenters also expressed the view that thresholds included in the
proposal are no longer reflective of economic conditions and providing
for updates and indexing would ensure thresholds evolve with economic
growth. One commenter noted that adjustments to various thresholds,
when viewed in aggregate, can have a deregulatory effect on the banking
industry by loosening reporting requirements and protections that
control risk.
C. Indexing Methodology
Many commenters supported the proposed indexing methodology and
expressed support for subsequent, periodic threshold adjustments that
occur automatically. However, some commenters stated that automatic
adjustments to thresholds would be complex and unpredictable and could
create burden on banks when designing, implementing, and maintaining
internal control frameworks. One commenter stated that automatically
indexing thresholds erodes transparency and makes it difficult to
predict in advance whether an IDI will cross the threshold in the
following year.
Comments were mixed as to whether to use CPI-W as the reference
index under the proposed indexing methodology. A few commenters
supported the FDIC applying the same methodology when updating and
adjusting thresholds across its regulations, while others suggested
alternatives to CPI-W, including nominal GDP, banking industry assets,
or an approach that would tailor the reference index by threshold type.
These commenters suggested using CPI-W for consumer-facing monetary
thresholds, and nominal GDP for asset-based thresholds. Many of these
commenters also noted that the proposed updated thresholds are lower
than they would otherwise be if adjusted using growth in GDP as a basis
for adjustments. One commenter suggested that thresholds should be
raised beyond the rate of inflation, as the number of banks has
declined and new bank formations have been low. Additionally, one
commenter suggested that thresholds should be adjusted for periods of
deflation.
Comments related to an alternative approach discussed in the
proposal that allowed for future adjustments only at pre-determined
levels (i.e., a milestone approach) were mixed, with commenters
offering diverging perspectives about whether this approach would
provide regulatory certainty.
D. Effective Date
Under the proposal, initial updates would become effective,
consistent with applicable law, at the beginning of the first calendar
quarter following adoption of the final rule. Several commenters
generally requested more time to comply with the proposed threshold
changes, while others more specifically recommended a transitional
process. Additionally, some commenters requested clarity regarding
transition timelines.
Several commenters recommended a specific effective date of January
1, 2025, for the proposed changes, to allow for retroactive application
of the updated thresholds. Some commenters suggested that the rule be
effective immediately, while one commenter proposed the rule be delayed
until January 1, 2027. A number of commenters also suggested that the
FDIC determine whether institutions have crossed thresholds by
evaluating an institution's assets over a period of time, such as over
several quarters or over several years.
E. Other Comments
Some commenters recommended application of the proposal to
additional thresholds. For example, commenters recommended updates and
adjustments to thresholds such as the qualifying equity interest of
national bank directors threshold, appraisal thresholds for real estate
properties, the Community Reinvestment Act intermediate-small bank
threshold, bank holding company thresholds, currency transaction
reporting thresholds, Dodd-Frank Act's Durbin Amendment threshold, and
thresholds used to determine applicability of regulatory capital and
liquidity requirements. These commenters requested the FDIC coordinate
with the other Federal banking agencies to update additional thresholds
that do not appear only within FDIC regulations, as well as coordinate
with Congress to update statutory thresholds.
Comments regarding 12 CFR part 363 thresholds were also received as
part of the regulatory review being conducted pursuant to the Economic
Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA).\12\
Comments included
[[Page 55792]]
recommendations to raise the requirement regarding audited financial
statements from $500 million to $1 billion and the internal control
over financial reporting (ICFR) requirement from $1 billion to $2.5
billion or $10 billion. Additionally, these comments indicated that the
Federal Deposit Insurance Corporation Improvement Act (FDICIA) audit
and reporting requirements are costly and burdensome for small
community banks, and that it is difficult for small, rural banks to
comply with audit committee composition requirements. Several
commenters suggested tailoring regulatory thresholds by distinguishing
banks by asset size, and three comments submitted under the EGRPRA
review expressed support for amending 12 CFR part 363 thresholds.
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\12\ The FDIC, together with the Federal Financial Institutions
Examination Council, Office of the Comptroller of Currency, and the
Board of Governors of the Federal Reserve System (FRB), commenced a
review under the Economic Growth and Regulatory Paperwork Reduction
Act of 1996 in 2024 to solicit feedback from the public on
potentially outdated or otherwise unnecessary regulatory
requirements. The FDIC has reviewed and considered those comments
received pursuant to the EGRPRA review that relate to the thresholds
considered within this rulemaking.
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III. Final Rule and Discussion of Comments
The FDIC carefully considered all comments received and is
finalizing the threshold updates and indexing methodology for future
adjustments generally as proposed. Except as otherwise provided,\13\
the final rule updates the thresholds described below to reflect
historical inflation and indexes most of these thresholds to account
for future inflation. The FDIC is changing the effective date of future
threshold adjustments as discussed in more detail below, as compared to
the proposal. Additionally, the FDIC is providing that certain IDIs may
be exempted from requirements under 12 CFR part 363 as it relates to
future threshold adjustments, as described below.
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\13\ As discussed in section III.A.5 of this SUPPLEMENTARY
INFORMATION, the initial updates to thresholds in 12 CFR part 363
support a key underlying objective of the regulation, while
maintaining consistency with the historical scope of applicability
and reducing burden for smaller institutions. In addition, one
threshold under 12 CFR part 363 that is intended to align to listing
standards of the national securities exchanges is not subject to the
proposed indexing methodology.
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A. Initial Updates
While many commenters were supportive of the policy objectives of
the proposal, some expressed reservations related to updating
thresholds without reassessing their original policy designs. While
these commenters supported updating thresholds included in the proposal
generally, they expressed concern that the proposed updates would
inadvertently perpetuate outdated or arbitrary policy design choices
without reassessing their basis. As explained in the proposal, the FDIC
sought to update thresholds according to changes in inflation since
their implementation or most recent adjustment, while also considering
policy objectives and intended application. For example, the proposed
updates to certain thresholds under 12 CFR part 363 reflected other
considerations to help ensure sound financial management of the
institutions posing the greatest potential risk to the Deposit
Insurance Fund (DIF). As discussed below, the final rule adopts the
initial update approach set forth in the proposal.
1. 12 CFR Part 303 (Part 303)--Filing Procedures
Section 19 of the FDI Act (section 19) prohibits, without the prior
written consent of the FDIC, a person convicted of any criminal offense
involving dishonesty, breach of trust, or money laundering, or who has
entered into a pretrial diversion or similar program in connection with
a prosecution for such an offense (collectively, covered offenses),
from becoming or continuing to serve as an institution-affiliated
party.\14\ Subpart L of part 303 of the FDIC's regulations implements
section 19 and includes separate $2,500 and $1,000 de minimis
thresholds for certain offenses that are excluded from the scope of
section 19 and for which no section 19 application is required.\15\
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\14\ 12 U.S.C. 1829.
\15\ Note that 12 CFR 303.227 contains 3 different dollar
thresholds setting forth different de minimis exceptions. The $2,000
or less threshold for bad checks set forth in 12 CFR
303.227(b)(2)(i) is set by statute (12 U.S.C. 1829(c)(3)(C)) and is
therefore not within the FDIC's discretion to adjust and not
included in this final rule.
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Specifically, under 12 CFR 303.227, the requirements of section 19
do not apply to covered offenses where the individual could have been
sentenced to a term of confinement in a correctional facility of three
years or less and/or a fine of $2,500 or less, and that meet the
additional criteria set forth in that section. In addition, the
requirements of section 19 do not apply to ``small dollar, simple
theft,'' which includes, among other requirements, the simple theft of
goods, services, or currency (or other monetary instrument) if the
value of the currency, goods, or services involved has a value of
$1,000 or less.\16\
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\16\ Additional criteria that must be met are set forth in 12
CFR 303.227(b)(3).
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For purposes of implementing section 19, an ongoing, significant
objective of the FDIC has been to establish criteria for the de minimis
exception framework such that it applies to offenses that are
relatively minor in nature and help to ensure that prior conduct of the
covered party would pose low risk to an IDI. Over time, the FDIC has
expanded the scope of the de minimis framework based on historical
analysis that showed the FDIC routinely approved section 19
applications involving minor offenses.\17\ Every expansion of the de
minimis framework ultimately provided additional relief to potential
applicants without undermining the purpose of section 19 or causing
undue risk to an institution or the DIF.\18\ Under the proposal, the
$2,500 and $1,000 de minimis thresholds would be updated to $3,500 and
$1,225, respectively, to reflect inflation since these thresholds were
previously set.\19\
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\17\ For example, in 2018, the FDIC broadened the application of
the de minimis exception to filing an application due to the minor
nature of the offenses and the low risk that the covered party would
pose to an IDI based on the conviction or program entry. By
modifying these provisions, the FDIC stated it believed that there
would be a reduction in the submission of applications where
approval has been granted by virtue of the de minimis offenses
exceptions to filing in the policy statement. 83 FR 38143 (Aug. 3,
2018).
\18\ For example, changes to the de minimis exception in the
final rule published in 2020 would have reduced past applications by
approximately 20 percent. Fact Sheet: FDIC Issues Rule on Section 19
of the Federal Deposit Insurance Act (July 2020), available at
<a href="https://www.fdic.gov/news/section19-7-24-20.pdf">https://www.fdic.gov/news/section19-7-24-20.pdf</a>.
\19\ The non-seasonally adjusted CPI-W increased by
approximately 38 percent since the $2,500 de minimis threshold was
set in 2012 and approximately 23 percent since the $1,000 de minimis
threshold was set in 2020.
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The FDIC received several comments related to these proposed
changes. One commenter supported adjusting the part 303 threshold as
described in the proposal because consumer-facing thresholds are more
appropriately tied to consumer inflation and CPI-W indexes (in contrast
to other thresholds for which the commenter argued that a different
methodology would be more appropriate).
After considering the comments received, the FDIC is finalizing the
proposed updates to the de minimis thresholds, without change. The
updates in the final rule help preserve the intended level of these
thresholds in real terms while providing meaningful relief from
barriers to employment opportunities, consistent with the purpose of
section 19 and prior amendments to the de minimis exception framework.
[[Page 55793]]
2. 12 CFR Part 335 (Part 335)--Securities of State Nonmember Banks and
Savings Associations
Part 335 of the FDIC's regulations provides securities
registration, recordkeeping, and disclosure requirements for State
nonmember banks and State savings associations with one or more classes
of securities required to be registered under section 12 of the
Securities Exchange Act of 1934 (Exchange Act), as amended.\20\ Section
335.801 requires those State nonmember banks and State savings
associations to disclose any extensions of credit to insiders that are
in excess of 10 percent of the capital account of an institution or $5
million, whichever is less.\21\ The FDIC set the $5 million threshold
in 1979, stating that the prior threshold of $10 million was too high
to allow for meaningful disclosure.\22\ The FDIC revisited this amount
in 1997 and determined at the time that the overall benefit to the
banking industry resulting from continuation of the FDIC's historical
disclosure requirements under part 335, including the $5 million
threshold, was in the public interest and appropriate for protection of
investors.\23\ The proposal would update the $5 million threshold to
$10 million to reflect inflation since the FDIC's most recent
consideration of the threshold.\24\
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\20\ 12 CFR part 335.
\21\ 12 CFR 335.801(d).
\22\ 44 FR 33077, 33079 (June 8, 1979).
\23\ 62 FR 6852, 6855 (Feb. 14, 1997).
\24\ If indexed to inflation since the FDIC's most recent
consideration of the indebtedness of management disclosure
provisions in 1997, the $5 million threshold would be $9.9 million.
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The FDIC received one comment related to this proposed change. This
commenter stated that loosening standards, including the threshold for
having to report to the FDIC loans made by banks to insiders, can
increase aggregate risk. The commenter recommended that the FDIC
monitor and report on the actual impact that comes from adjusting
regulatory thresholds so that additional changes can be made if needed.
The final rule adopts the $10 million threshold for 12 CFR 335.801,
as proposed. The final rule preserves the level of this threshold in
real terms and helps avoid increases in the number of credit extensions
that must be reported to the FDIC due solely to inflation rather than
actual changes in the level of risk associated with such transactions.
3. 12 CFR Part 340 (Part 340)--Restrictions on Sale of Assets of a
Failed Institution by the Federal Deposit Insurance Corporation
Part 340 of the FDIC's regulations sets forth restrictions on the
FDIC's sale of failed IDI assets to individuals or entities that
improperly profited from, or engaged in, wrongdoing at the expense of a
failed IDI or, that seriously mismanaged a failed IDI.\25\ Among other
restrictions, part 340 prohibits a person from acquiring any assets of
a failed IDI if the person or its associated person has caused a
substantial loss to that failed institution \26\ or has demonstrated a
pattern or practice causing a substantial loss to one or more failed
institutions.\27\ Part 340 defines ``substantial loss'' to include
multiple types of loss that all use a threshold of $50,000 for purposes
of determining whether the losses are ``substantial.'' \28\ The FDIC
added part 340 to the FDIC's regulations in 2000.\29\ Subsequent
updates to part 340 have not substantively modified the ``substantial
loss'' definition or the $50,000 threshold.\30\ The substantial loss
provisions and the $50,000 threshold are also included in the FDIC's
Purchaser Eligibility Certification form, which is required under part
340 for all prospective purchasers of failed IDI assets.\31\ The FDIC
proposed to revise the ``substantial loss'' threshold in part 340 by
updating the existing threshold from $50,000 to $100,000 to reflect
inflation since the threshold was added to part 340.\32\
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\25\ 12 CFR 340.1(b).
\26\ 12 CFR 340.4(a)(1).
\27\ 12 CFR 340.4(c).
\28\ 12 CFR 340.2(h).
\29\ 65 FR 14816, 14818 (Mar. 20, 2000).
\30\ As discussed in more detail below, part 340, including the
``substantial loss'' provisions and the $50,000 threshold, was the
model for and is intended to match the substantially similar
provisions applicable to FDIC-covered financial company asset sales
under 12 CFR 380.13. See 80 FR 22886 (Apr. 24, 2015) (explaining
that, because of the substantially similar language in the statutes
authorizing the respective rules, part 340 served as a model for the
development of the rules at 12 CFR 380.13.). See also, id., at 80 FR
22887 (describing the updates to part 340 made to ensure consistency
between part 340 and 12 CFR 380.13).
\31\ The Purchaser Eligibility Certification form, available at
<a href="https://www.fdic.gov/asset-sales/purchaser-eligibility-certification-pec.pdf">https://www.fdic.gov/asset-sales/purchaser-eligibility-certification-pec.pdf</a>.
\32\ If indexed to inflation since the FDIC established the
``substantial loss'' threshold in 2000, the $50,000 threshold would
be $92,666. This updated threshold of $100,000 approximates
inflation adjustments.
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The FDIC is adopting the approach taken in the proposed rule,
without change. Updating the threshold for ``substantial loss'' to
reflect inflation preserves the level of the threshold in real terms,
while allowing more prospective purchasers to make offers to buy failed
IDI assets. The FDIC expects this update to improve competition for the
prices paid for failed IDI assets.
4. 12 CFR Part 347 (Part 347)--International Banking
The FDIC issued a final rule in 1998 amending its international
banking regulations and consolidating them into part 347.\33\ Subpart A
to part 347, which implements sections 18(d) and 18(l) of the FDI Act,
sets forth the requirements for insured State nonmember bank
investments in foreign organizations, permissible foreign financial
activities, loans or extensions of credit to or for the account of
foreign organizations, and the FDIC's related recordkeeping,
supervision, and approval requirements. Subpart A also addresses
permissible activities for foreign branches of insured State nonmember
banks.
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\33\ 63 FR 17056 (Apr. 8, 1998).
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Under subpart A of part 347, a State nonmember bank may hold an
equity interest in one or more foreign organizations that underwrite,
deal, or distribute equity securities outside of the United States,
subject to certain limitations. Two of those limitations include
dollar-based thresholds. First, 12 CFR 347.111(a) provides that the
aggregate underwriting commitments by foreign organizations for the
securities of a single entity, taken together with underwriting
commitments by any affiliate of the State nonmember bank under the
authority of 12 CFR 211.10(b), may not exceed the lesser of $60 million
or 25 percent of the State nonmember bank's Tier 1 capital. Second, 12
CFR 347.111(b) provides that the equity securities of any single entity
held for distribution or dealing by the foreign organizations, taken
together with equity securities held for distribution or dealing by any
affiliate of the insured State nonmember bank under the authority of 12
CFR 211.10, must not exceed the lesser of $30 million or 5 percent of
the insured State nonmember bank's Tier 1 capital, subject to certain
other requirements.
The dollar-based thresholds under subpart A of part 347 were
established in 1998 and have not since been updated. To preserve the
level of these thresholds in real terms, the proposal would revise
these dollar limits on aggregate underwriting commitments and on equity
securities held for distribution or dealing to $120 million and $60
million, respectively, to approximate inflation adjustments since 1998.
The FDIC received several comments related to the proposed changes.
One commenter expressed support for
[[Page 55794]]
raising the dollar limits in part 347, stating that increasing the
thresholds would enable IDIs to provide more services internationally
and compete with non-U.S. banks, which would help support the
competitive position of U.S. institutions internationally.
Additionally, one commenter agreed with recognizing inflation within
part 347 but noted that adjustments can have a deregulatory effect on
the banking industry.
After considering comments received, the FDIC is adopting the
proposed changes to part 347 without change. By updating these
thresholds, the final rule preserves their levels in real terms and
supports the ability of insured State nonmember banks to compete
internationally, consistent with policy objectives of part 347.
5. 12 CFR Part 363 (Part 363)--Annual Independent Audits and Reporting
Requirements
i. Background
Section 112 of the FDICIA added section 36, ``Early Identification
of Needed Improvements in Financial Management,'' to the FDI Act.\34\
Section 36 generally subjects IDIs above a certain asset size threshold
to an annual independent audit, assessment of the effectiveness of
internal control over financial reporting (ICFR), and compliance with
designated laws and regulations, as well as related reporting
requirements. Section 36 also includes requirements for audit
committees of these IDIs. Section 36 grants the FDIC discretion to set
the asset size threshold for compliance with these requirements, but it
also provides that the threshold shall not be less than $150
million.\35\
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\34\ 12 U.S.C. 1831m.
\35\ Consistent with the statute, the FDIC consulted with the
other Federal banking agencies about updating these thresholds and
the methodology to adjust affected thresholds in the future.
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Part 363 of the FDIC's regulations implements section 36 and
requires any IDI with total consolidated assets of $500 million or more
at the beginning of its fiscal year to submit to the FDIC and other
appropriate Federal and State supervisory agencies an annual report
(Part 363 Annual Report) comprised of audited comparative financial
statements, the independent public accountant's report thereon, a
management report containing a statement of management's
responsibilities, and an assessment by management of compliance with
applicable laws and regulations.\36\ The Part 363 Annual Report for an
IDI with $1 billion or more in total consolidated assets must also
include an assessment by management of the effectiveness of ICFR
(within the management report) and the independent public accountant's
attestation report on ICFR.\37\ From 1993, the year that the ICFR
threshold was implemented at $500 million, to 2005, the FDIC did not
adjust this threshold. In 2005, the ICFR threshold was increased from
$500 million to $1 billion.\38\
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\36\ The requirements under part 363 are set forth in 12 CFR
363.2 and 363.4(a). Part 363 also contains audit committee
composition requirements and other reporting and notice
requirements. Further, public companies may have additional
requirements under the Sarbanes-Oxley Act of 2002.
\37\ See 12 CFR 363.2(b)(3), 363.3(b), and 363.4(a).
\38\ 70 FR 71226, 71227 (Nov. 28, 2005).
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When the FDIC initially implemented part 363 in 1993, use of a $500
million asset threshold captured approximately 1,000 IDIs (out of
approximately 14,000) holding 75 percent of U.S. banking assets, while
exempting approximately two-thirds of IDIs that would have been subject
to part 363 under a $150 million threshold.\39\ In addition, at the
time of initial implementation, more than 96 percent of these covered
institutions reported that they were subject to an annual audit by an
independent public accountant at the IDI or parent company level. The
initial scope of application for part 363 was intended to help ensure
sound financial management of the institutions posing the greatest
potential risk to the DIF.\40\ The 2005 amendment to the ICFR threshold
in part 363 reflected a recognition that compliance with the audit and
reporting requirements had become more burdensome and costly,
particularly for smaller nonpublic institutions.\41\ In addition, due
to consolidation in the banking and thrift industry and the effects of
inflation, the scope of applicability for part 363 had increased to
cover more than 1,150 (out of 8,900) IDIs, representing approximately
90 percent of industry assets.\42\ Following the 2005 amendment, about
600 of the largest IDIs with approximately 86 percent of industry
assets continued to be covered by the ICFR requirements of part 363.
This change was intended to achieve meaningful burden reduction in a
manner consistent with safety and soundness.\43\ Subsequent amendments
to part 363 in 2009 \44\ and 2020 \45\ did not result in permanent
changes to the regulatory asset thresholds.
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\39\ 58 FR 31332, 31333 (June 2, 1993).
\40\ Id.
\41\ 70 FR 71227.
\42\ Id.
\43\ Id.
\44\ 74 FR 35726 (July 20, 2009).
\45\ 85 FR 67427 (Oct. 23, 2020). In 2020, the FDIC adopted an
interim final rule allowing IDIs to use total consolidated assets as
of December 31, 2019, for purposes of the asset thresholds in part
363 for fiscal years ending in 2021.
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ii. Overview of Proposed Asset Threshold Updates in Part 363
Many of the dollar-based thresholds in part 363 have been in place
for more than 30 years. The proposal would increase the applicability
asset threshold from $500 million to $1 billion and the ICFR asset
threshold from $1 billion to $5 billion. Additionally, the FDIC
proposed to increase the threshold related to minimum audit committee
requirements for IDIs from the range of $500 million to less than $1
billion in total assets to the range of $1 billion to less than $5
billion in total assets, as well as the threshold of $1 billion or more
in total assets to $5 billion or more. The FDIC also proposed to
increase the threshold related to additional audit committee
requirements from $3 billion to $5 billion.\46\ Use of these proposed
thresholds would help support a key underlying objective of part 363--
that is, achieving sound financial management at IDIs posing the
greatest risk to the DIF \47\--and maintain consistency with the
historical scope of applicability according to several metrics. The
proposed $1 billion and $5 billion thresholds cover institutions
holding approximately 95 and 89 percent of industry assets,
respectively. In addition, the proposed increase in the applicability
threshold from $500 million to $1 billion would result in approximately
the same number of institutions being subject to part 363
(approximately 1,000 institutions) in 2025 as were subject to the
regulation in 1993 (at its inception) and in 2005 (when the threshold
for the ICFR requirements was amended), while removing nearly 800
institutions from the general scope of applicability for part 363.
Similarly, the proposed increase in the ICFR threshold from $1 billion
to $5 billion would be generally consistent with the historical
application of such requirements (to approximately 7 percent of
institutions) at the time of initial implementation and under the 2005
amendment. The thresholds set forth in the proposed rule also would
achieve meaningful burden reduction for the smallest institutions,
which would be removed from the
[[Page 55795]]
scope of applicability for reporting requirements and internal control
assessments. Furthermore, experience has demonstrated that smaller
community institutions, particularly those in rural areas, have had
difficulty complying with the audit committee composition requirements.
Specifically, these institutions frequently report that it is
increasingly difficult to attract and retain individuals who are
willing and capable of serving as a member of an audit committee,
thereby making compliance with the audit committee composition
requirements of part 363 challenging. Irrespective of the changes to
part 363 thresholds, IDIs may still be required to have an audit and
assess internal controls over financial reporting by their respective
States if the institution is State chartered.\48\ Additionally, IDIs
that are public companies or subsidiaries of public companies that file
annual and other periodic reports as required by the Sarbanes-Oxley Act
of 2002 are required to have an audit and assess internal controls over
financial reporting.\49\ As of March 31, 2025, approximately 52 percent
of institutions not subject to part 363 still obtained an audit.\50\
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\46\ In total, the FDIC is updating 24 regulatory asset
thresholds in part 363. Several of these asset thresholds are
similar and are repeated throughout part 363 pertaining to the
general requirements of part 363, as well as to the holding company
requirements of part 363 (for IDIs that are subsidiaries of holding
companies), and audit committee composition requirements.
\47\ 70 FR 71226, 71227.
\48\ See e.g., AL Code 5-2A-22 (2024); CA Fin Code 502 (2024);
Conn. Gen. Stat 36a-86; and Ga. Comp. R. & Regs. R. 80-1-14-.01.
\49\ Sarbanes-Oxley Act of 2002, Public Law 107-204, 116 Stat.
745 (2002).
\50\ Call Report Data, March 31, 2025. The level of audit work
performed on an institution is reported in the March Call Report
each year and can be found online M.1 in the Memorandum to Schedule
RC.
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The FDIC also proposed an increase to the $100,000 compensation
threshold under part 363 related to the determination of whether a
director is considered ``independent of management.'' \51\ Paragraph 28
in appendix A to part 363, ``Independent of Management''
Considerations, sets forth the criteria a board of directors should
consider when determining the independence of an outside director for
audit committee purposes. The independence criteria under part 363,
including the $100,000 compensation threshold, are intended to be
consistent with those provided under the listing standards of national
securities exchanges while providing some flexibility for smaller
nonpublic institutions.\52\
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\51\ The threshold describes situations where the director has
received, or has an immediate family member who has received, during
any twelve-month period within the last three years, more than
$100,000 in direct and indirect compensation from the institution,
its subsidiaries, and its affiliates for consulting, advisory, or
other services other than director and committee fees and pension or
other forms of deferred compensation for prior service (provided
such compensation is not contingent in any way on continued
service).
\52\ See 12 CFR part 363, appendix A, paragraph 28.
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The FDIC implemented the $100,000 threshold under part 363 in 2009.
Since that time, the parallel threshold under the listing standards of
national securities exchanges has been raised to $120,000.\53\
Accordingly, the FDIC proposed increasing the $100,000 compensation
threshold under part 363 to $120,00 to realign it with the parallel
threshold set forth in listing standards. This revision also would
address the potential unintended outcome where a director could be
considered ``independent of management'' for purposes of listing
standards while at the same time being considered ``not independent of
management'' for purposes of part 363.
---------------------------------------------------------------------------
\53\ Nasdaq Stock Market Rules, Rule 5605(a)(2); New York Stock
Exchange Listed Company Manual, section 303A.02(b)(ii).
---------------------------------------------------------------------------
In contrast to the other part 363 thresholds in the proposed rule
that are subject to automatic adjustments in the future, the $120,000
compensation threshold would not be subject to the proposed indexing
methodology described in section III.B of this SUPPLEMENTARY
INFORMATION as it is intended to align with parallel thresholds under
listing standards, which are not subject to an indexing methodology.
The FDIC proposed to adjust this threshold in the future to maintain
alignment with parallel thresholds in the listing standards of the
national securities exchanges.
iii. Comments on Part 363
The part 363 suggestions most frequently raised by commenters
centered on the proposed updated asset threshold for the independent
audit requirement, the proposed updated asset threshold for ICFR, the
effective date for the updated thresholds, and the application of
thresholds using average asset balances as opposed to point-in-time
asset balances. Many commenters noted the proposed changes would
substantially reduce costs and regulatory burden, particularly for
smaller institutions. For example, updating the thresholds for audit,
internal control, audit committee composition, and related reporting
requirements would alleviate meaningful challenges for smaller
institutions that have become scoped into part 363. Commenters also
indicated the proposal would reduce burden associated with finding
qualified individuals to serve on an audit committee, particularly for
institutions in rural areas.
Many commenters were supportive of increasing the audit requirement
and ICFR thresholds. Several commenters suggested increasing the $500
million asset threshold for the audit requirement to an amount other
than $1 billion as proposed. Many of these commenters recommended
specific asset thresholds for the part 363 audit requirement, with
ranges from $2 billion to $10 billion. One commenter suggested a
threshold as low as $750 million, while another commenter suggested a
threshold as high as $15 billion. In addition to the asset threshold
for the audit requirement, numerous commenters suggested raising the
existing $1 billion asset threshold for ICFR to $10 billion instead of
$5 billion as proposed. One commenter suggested eliminating the
requirement to file financial statements under certain circumstances.
Commenters advocating for higher thresholds than those set forth in
the proposal emphasized the cost and burden that audit and ICFR
requirements impose on community banks. Such commenters requested that
such burdens be shifted away from smaller institutions and towards
larger institutions that pose more significant risks to the banking
system, particularly with respect to the ICFR requirements.
Conversely, some commenters objected to the proposed increase in
the independent audit requirement from $500 million to $1 billion and
the ICFR requirement from $1 billion to $5 billion on the basis that it
could lead to unreliable information in the Consolidated Reports of
Condition and Income (Call Report) for those institutions without an
independent audit requirement.
Several commenters made suggestions regarding the effective date
for the updated thresholds. These commenters generally advocated for a
retroactive effective date to provide immediate burden relief for
institutions with consolidated total assets below the updated
thresholds.
A number of commenters also suggested that the FDIC determine
whether institutions have crossed thresholds by evaluating an
institution's assets over a period of time, such as over several
quarters or over several years. These commenters emphasized that
evaluating assets over a period of time (as opposed to a single point
in time) would allow for smoother transition runways and thereby reduce
cliff effects for institutions as they cross asset thresholds and
become subject to additional requirements under part 363.
One commenter requested additional guidance on how to apply updated
[[Page 55796]]
thresholds to IDI subsidiaries of bank holding companies (BHCs) with
consolidated assets over $10 billion, where the IDI's consolidated
assets are below that threshold. Additionally, one commenter
recommended that 12 CFR 363.3(f) be amended to remove the requirement
to comply with the independence standards of the Securities and
Exchange Commission (SEC) and Public Company Accounting Oversight
Board.
iv. Response to Comments on Part 363
Some commenters advocated for an increase in the audit requirement
threshold to an amount greater than the proposed threshold of $1
billion. However, the $1 billion threshold would meaningfully reduce
burden for community banks, while preserving the objective of the
underlying statute, i.e., ensuring early identification of needed
improvements in financial management among institutions originally
intended to be covered by part 363, on the basis of both the number of
IDIs and portion of total industry assets.
As noted above, increasing thresholds as proposed would result in
realigning industry coverage with policy objectives while providing
meaningful burden reduction for community banks. Most notably,
increasing the audit threshold would result in approximately 780 fewer
institutions being subject to audit requirements under part 363. In
terms of burden reduction, raising the ICFR threshold from $1 billion
to $5 billion would result in more than 700 institutions no longer
having to satisfy the ICFR requirements under part 363.
Based on the importance of independent audits in identifying
weaknesses in internal controls for financial reporting and the
reliance on such reporting for prudential standards such as regulatory
capital and liquidity, the final rule does not adopt higher thresholds
than those proposed. The FDIC and other Federal banking agencies rely
upon financial information to evaluate the condition of IDIs, and the
independent audit requirement in part 363 helps to ensure the accuracy
and integrity of such information. Independent audits also help to
identify weaknesses in internal control over financial reporting and
risk management at institutions and reinforce corrective measures, thus
complementing supervisory efforts in contributing to the safety and
soundness of IDIs. The final rule's updates to the thresholds balance
burden reduction with threshold levels that are appropriate for
requiring compliance with part 363, as they are consistent with those
used for purposes of its initial implementation in both the number of
institutions and portion of industry assets covered by the regulation.
v. Final Rule
As discussed above, the FDIC has considered the comments received
on its proposed amendments to part 363 and is finalizing the updates to
these thresholds as proposed. However, as described in more detail in
sections III.A.8 and III.B.3.ii of this SUPPLEMENTARY INFORMATION, the
FDIC is allowing flexibility with respect to compliance with part 363
in certain, specified circumstances.
The final rule updates the applicability asset threshold in part
363 from $500 million to $1 billion and the ICFR asset threshold from
$1 billion to $5 billion. Additionally, the final rule increases the
threshold related to minimum audit committee requirements for IDIs from
the range of $500 million to less than $1 billion in total assets to
the range of $1 billion to less than $5 billion in total assets, as
well as the threshold of $1 billion or more in total assets to $5
billion or more. The final rule also increases the threshold related to
additional audit committee requirements from $3 billion to also $5
billion. Additionally, the final rule updates the compensation
threshold in part 363 related to the determination of whether a
director is considered ``independent of management'' from $100,000 to
$120,000.
Table 1--Updated Part 363 Thresholds
----------------------------------------------------------------------------------------------------------------
Table 1--Part 363 updated thresholds
-----------------------------------------------------------------------------------------------------------------
Threshold as of January 1,
Citation 2025 Updated threshold
----------------------------------------------------------------------------------------------------------------
363.1(a)................................. $500 million................ $1 billion.
363.2(b)(3).............................. 1 billion................... 5 billion.
363.3(b)................................. 1 billion................... 5 billion.
363.4(a)(2).............................. 1 billion................... 5 billion.
363.4(c)(3).............................. 1 billion................... 5 billion.
363.5(a)(1).............................. 1 billion................... 5 billion.
363.5(a)(2).............................. 500 million................. 1 billion.
363.5(a)(2).............................. 1 billion................... 5 billion.
363.5(b)................................. 3 billion................... 5 billion.
Guideline 8A............................. 1 billion................... 5 billion.
Guideline 8A............................. 1 billion................... 5 billion.
Guideline 10............................. 1 billion................... 5 billion.
Guideline 18A............................ 1 billion................... 5 billion.
Guideline 27............................. 1 billion................... 5 billion.
Guideline 27............................. 500 million................. 1 billion.
Guideline 27............................. 1 billion................... 5 billion.
Guideline 28(b)(4)....................... 100 thousand................ 120 thousand.\54\
Guideline 30(b).......................... 1 billion................... 5 billion.
Guideline 30(c).......................... 500 million................. 1 billion.
Guideline 30(c).......................... 1 billion................... 5 billion.
Guideline 35(a).......................... 500 million................. 1 billion.
Guideline 35(b).......................... 1 billion................... 5 billion.
Guideline 35(c).......................... 3 billion................... 5 billion.
Appendix B item 2(b)..................... 1 billion................... 5 billion.
----------------------------------------------------------------------------------------------------------------
[[Page 55797]]
6. 12 CFR Part 380 (Part 380)--Orderly Liquidation Authority
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\54\ As discussed above, the final rule also raises the
threshold set forth in Guideline 28(b)(4) from $100,000 to $120,000.
This threshold was intended to align with the listing standards of
national securities exchanges for purposes of making director
independence determinations.
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Part 380 of the FDIC's regulations implements the FDIC's orderly
liquidation authority,\55\ which applies once the FDIC has been
appointed receiver for a covered financial company.\56\ Similar to the
provisions regarding the sale and purchase of failed IDI asset sales
under part 340, 12 CFR 380.13 of the FDIC's regulations sets forth
restrictions on the FDIC's sale of failed covered financial company
assets to individuals or entities that improperly profited from or
engaged in wrongdoing at the expense of a covered financial company or
seriously mismanaged a covered financial company.\57\ The restrictions
under 12 CFR 380.13 apply to the sale and purchase of covered financial
company assets in the FDIC's capacity as receiver for a covered
financial company or in its corporate capacity.\58\
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\55\ Title II of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (Dodd-Frank Act) section 201, et seq., 12 U.S.C.
5381, et seq.
\56\ See Dodd-Frank Act section 202(a), 12 U.S.C. 5382(a)
(describing the process for the Secretary of the Treasury to appoint
the FDIC as receiver for a covered financial company and commence
orderly liquidation of the covered financial company); see also 12
CFR 380.1.
\57\ 12 CFR 380.13(a)(1).
\58\ 12 CFR 380.13(a)(2)(i).
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Among other restrictions, 12 CFR 380.13 prohibits a person from
acquiring assets of a covered financial company from the FDIC if the
person or its associated person has caused a substantial loss to a
covered financial company \59\ or has demonstrated a pattern or
practice causing a substantial loss to one or more covered financial
companies.\60\ As in part 340, 12 CFR 380.13 defines ``substantial
loss'' to include multiple types of loss that all use a threshold of
$50,000 to establish the losses as ``substantial.'' \61\
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\59\ 12 CFR 380.13(c)(1)(i). Section 380.13 defines material
participation in a transaction that caused substantial loss to a
covered financial company in 12 CFR 380.13(c)(2).
\60\ 12 CFR 380.13(c)(3).
\61\ 12 CFR 380.13(b)(6).
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The FDIC added 12 CFR 380.13 to the FDIC's regulations in 2014.\62\
From inception, the FDIC has explicitly implemented the requirements in
12 CFR 380.13, including the ``substantial loss'' provisions and
threshold, in a manner consistent with the restrictions related to
failed IDI asset sales under part 340.\63\ Previous revisions to part
340 were also specifically intended to align the requirements in part
340 and 12 CFR 380.13.\64\
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\62\ 79 FR 20762, 20766-20767 (Apr. 14, 2014).
\63\ See id. at 79 FR 20762 (explaining that the 12 CFR 380.13
final rule is modeled after the FDIC's regulation at 12 CFR part 340
because the relevant statutory provisions share substantially
similar statutory language.).
\64\ Restrictions on Sale of Assets of a Financial Institution
by the Federal Deposit Insurance Corporations, 80 FR 22886, 22886-
22887 (Apr. 24, 2015) and 12 CFR 380.13.
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Under the proposal, the ``substantial loss'' threshold in 12 CFR
380.13 would be raised from $50,000 to $100,000 to reflect inflation
since the threshold was adopted.\65\
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\65\ If indexed to inflation since the FDIC established the
``substantial loss'' threshold in 2000, the $50,000 threshold would
be $92,666. The updated threshold of $100,000 approximates inflation
adjustments.
---------------------------------------------------------------------------
One commenter acknowledged the proposed update to the thresholds in
part 380 as part of a broader comment on the general deregulatory
effects of the proposal. In consideration of the comment received, the
FDIC is adopting the approach taken in the proposed rule, without
change.\66\ Updating the threshold for ``substantial loss'' to reflect
inflation preserves the level of the threshold in real terms and
maintains consistency between the ``substantial loss'' provisions in
part 340 and 12 CFR 380.13. The FDIC expects this update to improve
competition for sales of covered financial company assets or the prices
paid for those assets.
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\66\ Consistent with title II of the Dodd-Frank Act, the FDIC
consulted with the Financial Stability Oversight Council in updating
this threshold.
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7. Additional Thresholds
As described above, the FDIC received several comments advocating
for the FDIC to pursue updates and adjustments to thresholds that were
not included in the proposal, such as those that are statutory or do
not only appear within regulations issued only by the FDIC. The
thresholds referenced within these comments were outside the scope of
the proposal and therefore are not being considered as part of this
final rule.
8. Effective Date of Initial Threshold Updates
The FDIC received several comments related to the effective date or
the applicability date of the proposal. Some commenters requested
retroactive applicability of the rule, while others requested immediate
effectiveness. The final rule provides for an effective date of January
1, 2026.
With respect to part 363, the final rule clarifies that IDIs that
have prospective filing and compliance requirements based on thresholds
in place in 2025, but will no longer be subject to such requirements as
a result of the updated thresholds that will be in effect as of January
1, 2026, are no longer required to comply with such part 363
requirements.
The amendments to part 363 do not relieve public companies or
subsidiaries of public companies of their obligation to comply with the
internal control assessment requirements imposed by section 404 of the
Sarbanes-Oxley Act in accordance with the effective dates for
compliance set forth in the SEC's implementing rules.
9. Alternatives for Threshold Application
As described above, several commenters suggested alternatives for
how thresholds could be applied, such as by applying thresholds based
on an average of multiple periods or only after crossing a threshold
over consecutive periods. For example, some commenters suggested that
thresholds should be effective for an institution only after the
institution crosses the thresholds for two consecutive year-end dates
or that assets should be averaged over four consecutive quarters for
purposes of determining whether a threshold is effective for a
particular institution.
The thresholds included in the proposal would generally apply to an
institution based on the size of the institution at a point-in-time,
rather than over a period of time. Under the proposal, the FDIC
intended to update the dollar amount of specific thresholds, but not
necessarily the method used to determine whether a threshold is
effective for an individual institution, which is set forth in the
current regulations. If a future proposal were to update a threshold
for which applicability would be measured over a period of time, it may
be appropriate to allow for that determination method to continue to be
in effect, inclusive of any updates to the threshold dollar amount,
consistent with the applicable law. Further, as it relates to part 363,
section 36 of the FDI Act exempts small IDIs based on the value of
their assets ``as of the beginning of [their] fiscal year.'' \67\ The
final rule adopts the proposed point-in-time method for determining the
applicability of the thresholds included in the rule.
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\67\ Section 36(j) of the FDI Act, 12 U.S.C. 1831m(j).
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Some commenters also suggested an approach that would tailor the
reference index by threshold type, for example by applying CPI-W to
consumer-facing monetary thresholds and nominal GDP for asset-based
thresholds. As further discussed below, while tailoring the
[[Page 55798]]
application of a reference index by threshold type may present the
advantages described by commenters, it would increase complexity across
thresholds included under FDIC regulations. The final rule promotes
consistency across FDIC regulations by applying threshold updates and
adjustments using a single reference index.
B. Indexing Methodology for Future Threshold Adjustments
Under the proposal, the FDIC would implement an indexing
methodology that reflects inflation to make future automatic
adjustments to most thresholds discussed above. A discussion of the
proposal, comments received, and the final rule is provided below.
1. Description of Proposed Methodology
Under the proposal, the FDIC would generally adjust the dollar
thresholds described in section III.A of this SUPPLEMENTARY INFORMATION
at the end of every consecutive two-year period based on the cumulative
percent change of the non-seasonally adjusted CPI-W since the effective
date of the final rule. This two-year period was intended to provide an
appropriate cadence for capturing meaningful changes in inflation on a
timely basis while balancing the frequency with which thresholds are
adjusted. To address the possibility of periods of significant
inflation, the FDIC further proposed that thresholds subject to the
indexing methodology would also be adjusted if the cumulative percent
change in the non-seasonally adjusted CPI-W were to exceed 8 percent
during any intervening year since the most recent adjustment. By
allowing thresholds to be adjusted on an interim basis to reflect
periods of significant inflation, the proposal sought to address the
possibility that periods of significant inflation may cause thresholds
to decrease substantially in real terms before adjustments occur under
the two-year cadence.
Under the proposal, the FDIC would not lower thresholds in any
given year to reflect periods of deflation.\68\ Additionally,
thresholds adjusted under the proposed indexing methodology would be
rounded based on the size of the threshold (e.g., billions, millions,
thousands), generally, to the nearest two significant digits, as
appropriate.\69\ The proposal also provided that prior to rounding, all
adjusted thresholds would be calculated based on the cumulative percent
change of the non-seasonally adjusted CPI-W since the effective date of
the final rule in order to ensure that any distortions due to rounding
or non-adjustments for deflation do not carry forward to future
adjustments.
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\68\ Any periods of deflation would be reflected in future
threshold increases, as threshold adjustments in the future would be
based on the positive net cumulative change in CPI-W.
\69\ For example, a threshold that would otherwise be calculated
as $5.964 million would be rounded to $6.0 million, or the nearest
$0.1 million.
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To effectuate threshold changes under the proposal, the FDIC would
announce threshold adjustments pursuant to the indexing methodology by
publishing subsequent final rules in the Federal Register. Such final
rules would not be subject to notice and comment and would amend the
Code of Federal Regulations to reflect the adjusted numerical
threshold.\70\ Further, while the FDIC would intend to publish a final
rule in the Federal Register for each adjustment, the proposal noted
that adjustments would occur even in the absence of a publication in
the Federal Register. Under the proposal, adjusted thresholds would be
effective on April 1 of the year during which the adjustment
occurs.\71\
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\70\ This process to adjust numerical thresholds in the Code of
Federal Regulations is similar to the process utilized in the
Community Reinvestment Act in which the FDIC and FRB publish a final
rule without notice and comment.
\71\ For example, the proposal provided that an adjusted
threshold that is calculated based on inflation through the end of
2027 would be published during the first quarter of 2028 and would
become effective on April 1, 2028.
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i. Comments on the Proposed Methodology
Many commenters agreed with the proposed indexing methodology and
supported subsequent, periodic, automatic threshold adjustments.
Additionally, many commenters agreed with the policy objectives to
preserve threshold levels in real terms by periodically adjusting
thresholds to reflect inflation.
However, some commenters stated that automatic adjustments to the
thresholds would be complex and unpredictable and could create burden
on banks when designing, implementing, and maintaining an internal
control framework. One commenter suggested consideration of broader
measures of bank complexity beyond asset size when adjusting
thresholds, such as business line and geographic scope, and further
suggested the indexing methodology should lower thresholds to account
for deflation, consistent with raising thresholds to account for
inflation.
ii. Response to Comments on the Proposed Methodology
As described in section I of this SUPPLEMENTARY INFORMATION, the
proposed indexing methodology is intended to avoid situations where an
institution becomes subject to additional or more stringent regulatory
requirements due solely to inflation rather than actual changes in the
institution's size, risk profile, or level of complexity. When
developing the proposed indexing methodology, the FDIC sought to
balance predictability of future adjustments with the potential burden
associated with tracking and planning for such changes. For example, as
discussed further below, adjustment frequencies longer than the
proposed two-year cadence could lessen the burden involved with
tracking threshold changes, as it would result in fewer adjustments and
potentially improve an institution's ability to plan for and manage its
regulatory compliance obligations. However, prolonged adjustments also
increase the likelihood that a banking organization will cross
thresholds between adjustments due to inflation and therefore could
compromise the overarching policy objectives of the proposal. The two-
year cadence was intended to reflect meaningful changes in inflation
while balancing any potential burden resulting from tracking and
planning for threshold adjustments over time.
Additionally, the proposal intended to update and adjust the dollar
amount of specific thresholds to reflect inflation, but not necessarily
the mechanism to determine how a threshold applies to an individual
institution, which is set forth in the current regulations.
Accordingly, the FDIC did not consider additional measures of
complexity, such as business line or geographic scope, to determine
threshold adjustments, which go beyond the scope of the proposal to
reflect inflation across certain static, dollar-based thresholds.
Lastly, to avoid increased burden for reasons unrelated to changes in
inflation-adjusted size or risk profile, and given that periods of
deflation have been rare in modern times, the final rule does not
reduce thresholds during periods of deflation. However, any period of
deflation would nonetheless be reflected in future threshold increases,
as in such a scenario thresholds would not increase until the net
cumulative change in CPI-W turns positive. In the event that the U.S.
economy was to experience a period of sustained deflation, the FDIC may
consider revisiting the proposed indexing methodology.
[[Page 55799]]
2. Alternatives to the Proposed Indexing Methodology
i. Alternative Measures of Indexing: Other Price Indices
The FDIC proposed using the non-seasonally adjusted CPI-W as its
inflation measure for updating and indexing thresholds, but also
considered the seasonally-adjusted CPI-W series as well as other price
indices such as the Consumer Price Index for All Urban Consumers (CPI-
U), Chained CPI-U (C-CPI-U), Producer Price Index (PPI), Personal
Consumption Expenditures Price Index (PCEPI), and Gross Domestic
Purchases Price Index (GDPPI). Commenters did not address the
alternative price indices to measure inflation for purposes of the
proposed indexing methodology.
As noted in the proposal, an advantage of using the CPI-W for
updating and indexing thresholds within FDIC regulations is that the
CPI-W is already commonly used for this purpose, including by the FDIC
and other Federal agencies, such as the Social Security Administration
for calculating benefit payments,\72\ while the alternatives are less
frequently used for updating regulations and may be less familiar to
the public. Additionally, as noted in the proposal, the non-seasonally
adjusted CPI-W series reflects longer-term changes in inflation, which
supports the purpose of updating and indexing thresholds within FDIC
regulations.
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\72\ See Sec. 345.12(u)(2) of appendix G to 12 CFR part 345;
see also 12 CFR 1003.2(g)(1)(i); 20 CFR 404.272.
---------------------------------------------------------------------------
ii. Alternative Measures of Indexing: Gross Domestic Product (GDP)
In addition to consumer price indices, the proposal considered use
of other types of indices to update and index the regulatory thresholds
subject to the proposal. For example, the BEA publishes a GDP data
series on a quarterly basis, which measures aggregate U.S. economic
activity.\73\ Historically, the U.S. economy has expanded in real terms
(outside of recessions), which means the (nominal) GDP index has
typically increased at a faster rate than the consumer price indices
discussed above.\74\ As discussed in the proposal, U.S. nominal GDP has
increased by 299 percent over the past three decades, compared to a 111
percent increase in the CPI-W over the same period.\75\ Therefore, if
GDP were used as the basis for updating and indexing thresholds within
FDIC regulations, such thresholds would likely increase at a faster
rate than under the proposal.
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\73\ U.S. Bureau of Labor Statistics, Table 1.1.5. Gross
Domestic Product, line 1, available at <a href="https://apps.bea.gov/iTable/?reqid=19&step=2&isuri=1&categories=survey">https://apps.bea.gov/iTable/?reqid=19&step=2&isuri=1&categories=survey</a>.
\74\ Changes in GDP (sometimes referred to as changes in nominal
GDP) can be broken down into changes in prices inflation plus
changes in real economic output (real GDP).
\75\ Federal Reserve Bank of St. Louis, Gross Domestic Product,
available at <a href="https://fred.stlouisfed.org/series/NA000334Q">https://fred.stlouisfed.org/series/NA000334Q</a>; see also,
Federal Reserve Bank of St. Louis, Consumer Price Index for All
Urban Wage Earners and Clerical Workers: All Items in U.S. City
Average, available at <a href="https://fred.stlouisfed.org/series/CWUR0000SA0">https://fred.stlouisfed.org/series/CWUR0000SA0</a>.
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Some commenters supported the use of nominal GDP instead of CPI-W
to index thresholds. Several of these commenters indicated that
indexing asset-based thresholds to nominal GDP would help to ensure
that asset-based thresholds remain proportionate to the size of the
broader economy, while another commenter added that banking industry
deposits and assets are driven by economic activity, monetary policy,
and the money supply, and as such, GDP is a better measure of bank
expansion than CPI-W. Some commenters added that indexing methodologies
should be tailored to the threshold, such as using nominal GDP to index
asset thresholds based on size or risk-based measures and using CPI-W
or similar price indices to index consumer-facing thresholds and other
thresholds that are less sensitive to the impact of overall growth in
the economy. Commenters also noted that thresholds are lower than they
would otherwise be if updated and indexed using growth in GDP as a
basis for adjustments.
While financial activity is closely related to broader
macroeconomic activity and tends to grow together with the economy,
using inflation as a basis for updating and indexing thresholds within
FDIC regulations would specifically target consumer price levels to
ensure dollar thresholds remain relatively consistent over time in real
terms. Many commenters agreed with the indexing methodology, as
proposed, including the use of consumer price inflation to index
thresholds across FDIC regulations. As noted above, adjusting
thresholds based on consumer prices is a common practice already in use
by the FDIC and other Federal agencies. In addition, use of a single
index to adjust thresholds across FDIC regulations would promote
consistency and reduce burden from tracking threshold changes.
The FDIC recognizes that the banking industry will generally grow
alongside the broader economy. However, the final rule uses CPI-W as
the basis for indexing thresholds, consistent with the proposal. As
stated in the proposal, there are several downsides to using GDP for
threshold adjustments. GDP is subject to business cycle fluctuations
that may not always correspond with price level changes, such as in a
``stagflationary'' environment where stagnant economic growth occurs
simultaneously with inflation. Relatedly, GDP in certain cases may grow
fast for a period of years, followed by a downturn marked by slow or
negative growth. Additionally, GDP is a lagging indicator that is
frequently revised, which may limit the accuracy and durability of
threshold adjustments.
Finally, the intent behind many rules that use asset-based
thresholds is to target banks of a certain size, rather than a size
relative to the broader economy; thus, if the banking industry is
growing quickly in real terms alongside a rapidly growing economy,
banks are still growing for purposes of the relevant regulations. The
FDIC recognizes adjusting thresholds using certain alternative
measures, such as GDP, may produce higher threshold levels relative to
using CPI-W. However, when evaluating various alternatives, the FDIC
primarily considered their alignment with the overall policy objectives
of the proposal, rather than targeting a particular threshold level.
iii. Alternative Measures of Indexing: Other Measures
The proposal also considered and requested comments about updating
and indexing thresholds within FDIC regulations using measures of
growth in banking or financial sectors. Several commenters supported
use of a banking industry growth measure to index thresholds. One
commenter stated that use of the actual growth rate in total banking
industry assets would be a more direct measure to index asset-based
thresholds and, similarly, growth in deposits would be logical for
thresholds tied to deposits. Another commenter indicated growth of
banking industry assets is a more appropriate measure to index
thresholds and would be more representative of the commensurate risk to
the DIF and overall banking industry. Another commenter suggested
consideration of broader measures of bank complexity beyond asset size,
such as the definition of community banking organizations that has been
used by FDIC for other purposes.\76\
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\76\ For example, the FDIC has used a definition of ``community
banking organization'' as part of research efforts. See <a href="https://www.fdic.gov/community-banking-research-program/community-banking-studies">https://www.fdic.gov/community-banking-research-program/community-banking-studies</a>.
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[[Page 55800]]
While using banking industry assets as a measure may align
threshold levels with changes in the banking industry broadly, it may
also result in threshold adjustments that are influenced by factors
unrelated to policy objectives of particular FDIC regulations. For
example, threshold adjustments using growth in the size of the banking
industry or financial sector may be overly influenced by a subset of
institutions (for example, large banking organizations) and therefore
may not always be representative of, or broadly consistent with,
changes occurring across banks of different size ranges. Additionally,
as discussed in the proposal, using growth in the size of the banking
industry or financial sector would have disadvantages, including that
(1) many thresholds are intended to apply to banks of a certain size,
not necessarily a fixed proportion of the industry; (2) certain
thresholds, including several as part of this proposal, are set at
levels that are unrelated to asset size; and (3) these measures could
reflect real growth and actual changes in risk profile, as opposed to
capturing inflation alone. Compensating for these disadvantages by
adding additional conditions to the methodology would be relatively
more complex and less transparent to banks and market participants
compared to using inflation as a basis for threshold adjustments.
iv. Adjustment Frequency Within the Indexing Methodology
As discussed above, under the proposal, thresholds would generally
be adjusted every two years or if the cumulative change in non-
seasonally adjusted CPI-W exceeded 8 percent during any intervening
year since the most recent adjustment.
Some commenters preferred more frequent indexing for certain
regulations, such as annually, while other commenters recommended a
longer adjustment cadence, such as every three or five years. One
commenter suggested that adjusting real estate appraisal thresholds on
an annual basis would be commensurate with the original appraisal
thresholds and regulatory risk tolerances that were established by the
regulators. Commenters supporting a longer adjustment cadence indicated
that using a two-year cadence would take considerable regulatory
resources and add uncertainty for banks as inflation fluctuates over
time.
The proposal considered various other adjustment frequencies,
including quarterly, semi-annually, annually, every 3 years, and every
5 years. For most of the indexing options, including for the CPI-W, an
adjustment frequency as short as monthly would be feasible based on
data availability. As noted in the proposal, thresholds updated after a
shorter adjustment period (e.g., quarterly) would more frequently
reflect changes in inflation. A shorter adjustment period would also
reduce the number of institutions that cross a threshold between
adjustments solely based on growth consistent with consumer prices. A
disadvantage of shorter update frequencies is that it may require
institutions to more routinely update systems and compliance programs
to reflect more frequently adjusted thresholds, relative to longer
adjustment frequencies. Longer adjustment frequencies (e.g., every 3
years, every 5 years) generally have the opposite advantages and
disadvantages as compared to the shorter adjustment frequencies. Longer
adjustment frequencies would lessen the burden involved with tracking
threshold changes. However, prolonged adjustments may not sufficiently
mitigate the potential for a threshold level to change, in real terms,
during the time period between adjustments. Such an approach could
therefore heighten the potential for banking organizations to cross
thresholds between adjustments solely due to inflation.
The final rule adopts a two-year period for measuring inflation, as
proposed, which is intended to provide an appropriate cadence for
capturing meaningful changes in inflation on a timely basis while
balancing the frequency in which thresholds would be amended.
Additionally, by providing for adjustments in intervening years where
inflation exceeds 8 percent, the proposal would help mitigate the
potential for institutions to cross one or more thresholds when
inflation increases significantly during a two-year period. In the
event thresholds were increased in two consecutive years due to
inflation exceeding 8 percent, the adjustment period would reset, and
the next increase would occur after two years, unless inflation
exceeded 8 percent again the following year.
The proposal also considered, but the final rule does not adopt, an
alternative approach that would adjust thresholds annually based on the
change in inflation only if an inflation-adjusted threshold reaches a
pre-determined level (i.e., a milestone approach). Under this
alternative, for each regulatory threshold, the FDIC would calculate a
potential adjusted threshold based on CPI-W measured at the end of each
year relative to when a threshold was last adjusted. However, a
threshold would only be adjusted higher if the potential adjusted
threshold exceeded a certain milestone amount.
One commenter favored the proposed two-year cadence over the
milestone approach, while another commenter favored the automated
approach alternative discussed in the proposal relative to the
milestone approach. Some commenters supported the milestone approach,
stating that it allows threshold adjustments to reflect a material
change as a result of inflation, supports transparency, would be more
predictable for community banks, and allows them to plan ahead for
approaching thresholds that trigger new regulatory requirements. One of
these commenters also suggested further exploration of the advantages
and disadvantages of the milestone approach.
The milestone approach would provide only for material threshold
changes and could support transparency and predictability in future
threshold amounts as each milestone would be known in advance. However,
the milestone approach may lead to uncertainty in timing, as it may be
challenging for the public to track when increases in inflation will
trigger the next milestone for each threshold. Relative to an approach
with a pre-determined adjustment schedule, the milestone approach would
present regulatory compliance planning and management challenges
associated with tracking inflation on an ongoing basis, as well as
planning for, and managing to, adjustments, which would likely occur at
inconsistent frequencies. By contrast, under the final rule,
adjustments would be known ahead of time and be made pursuant to an
established periodic cadence, which would be expected to simplify
planning for, and management of, future threshold adjustments.
v. Degree of Automation in Indexing
The proposal provided that the FDIC would, every two years, publish
a Federal Register notice announcing threshold adjustments based on a
pre-determined indexing methodology. The FDIC considered an alternative
that would enhance the degree of automation by directly incorporating
the indexing calculation into each regulatory threshold. Under this
approach, a threshold would be defined within regulation as a starting
value multiplied by an index value such as the CPI-W, and the threshold
would be automatically adjusted with each update in the index. The
proposal discussed using this same approach while adhering to the
timing in the proposal,
[[Page 55801]]
in which the threshold would increase every two years and would be
rounded. The FDIC also considered posting the thresholds on its website
and notifying institutions and the public when they are increased.
Some commenters supported the use of automatic adjustments to index
the thresholds generally, though they did not refer specifically to the
direct referencing of an index as described above. One commenter
suggested that automatic adjustments offer transparency and
predictability, reducing administrative burden for both banks and
regulators. Other commenters indicated that automatic adjustments help
ensure that community banks are not unfairly burdened by preventing
thresholds from remaining artificially low and imposing undue burden on
banks that present low risk to the financial system.
As described in the proposal, the direct reference approach would
have the advantage of enhancing the automation, which could help
contribute to a relatively more streamlined adjustment process.
However, this approach may be less clear for members of the public or
regulated entities. Additionally, while the FDIC could post the
thresholds on its website, the revised threshold amounts would not be
codified in the Code of Federal Regulations. On balance, the approach
set forth in the proposal would provide relatively more transparency
and facilitate compliance with the requirements included in the
proposal when compared to the direct reference approach.
3. Final Rule--Indexing Methodology
i. Indexing Methodology, In General
The FDIC has carefully considered all comments received and is
finalizing the indexing methodology for future threshold adjustments as
proposed, with a modification to the effective date of future
adjustments, as discussed in section III.B.3.ii of this SUPPLEMENTARY
INFORMATION. Generally, the FDIC will adjust the dollar thresholds
described in section III.A of this SUPPLEMENTARY INFORMATION at the end
of every consecutive two-year period based on the cumulative percent
change of the non-seasonally adjusted CPI-W since the effective date of
the final rule.
As discussed above, the FDIC recognizes there may be certain
advantages of alternative approaches to periodically adjust thresholds,
as described by commenters. However, the final rule provides for a
consistent and predictable approach that specifically targets price
levels to ensure dollar thresholds remain relatively consistent, in
real terms, over time. The indexing methodology included in the final
rule enhances transparency and certainty by providing institutions with
a pre-determined schedule for future threshold changes. Further, these
automatic adjustments will help preserve thresholds' intended scope of
application and their alignment with intended policy objectives over
time. Accordingly, the indexing methodology contributes to a more
durable regulatory framework while avoiding the undesirable and
unintended outcome where the scope of applicability for a regulatory
requirement changes over time due solely to inflation.
ii. Effective Date and Timing of Future Adjustments
In a change from the proposal, which provided for an April 1
effective date for future threshold adjustments, the final rule
provides that such adjustments will take effect on October 1. This
change is intended to align the effective date with the start date of
fiscal years for the majority of IDIs, most of which have fiscal years
beginning on October 1 or January 1. The final rule also includes a
provision that expressly permits an IDI's appropriate Federal banking
agency to exercise discretion to provide exemptive relief to an IDI
whose asset size is likely to be below a relevant threshold following a
forthcoming threshold adjustment that is scheduled to occur during the
IDI's current fiscal year.
Part 363 measures the total consolidated assets of an IDI as of the
beginning of its fiscal year to determine the applicability of filing
and other compliance requirements under part 363, and IDIs have adopted
a variety of dates as the start of their fiscal years. As a result,
adjusting thresholds as of any specific date would impact IDIs
differently, depending on the start of the IDI's fiscal year. For
example, if the rule used January 1 as the date for threshold
adjustments, an IDI with a fiscal year beginning on October 1 would
immediately commence or continue certain part 363 compliance
obligations as of that date, even though the IDI may be removed from
the scope of such requirements for future fiscal years when the
applicability threshold is adjusted a few months later in January. If
an IDI expects to be subject to part 363 requirements as of the start
of the fiscal year, the IDI may begin work to engage with an
independent public accountant, to establish and/or maintain an adequate
internal control structure and procedures over financial reporting, and
to comply with audit committee composition requirements.
The final rule adopts two modifications to reduce the potential for
undue compliance burden resulting from the beginning of an IDI's fiscal
year not coinciding with the effective date of a future threshold
adjustment. First, the final rule adopts an October 1 effective date
for future threshold adjustments to coincide as closely as possible
with the fiscal years of the majority of IDIs. Second, if an IDI likely
will no longer be subject to a part 363 requirement as a result of a
threshold adjustment that is scheduled to occur during the IDI's
current fiscal year, the final rule includes a provision that expressly
permits the IDI's appropriate Federal banking agency to exercise
discretion to provide exemptive relief to the IDI.
While policy considerations related to part 363 motivated the FDIC
to change the effective date of future part 363 adjustments, the FDIC
has decided, for simplicity, to make future adjustments for all
thresholds in this final rule effective as of October 1 in the
applicable year.
The FDIC is also finalizing a two-year period as the default period
for future adjustments and is selecting the CPI-W data series as close
to the adjustment date as possible. The first future adjustment will be
effective on October 1, 2027, using the CPI-W data through August 30,
2027, relative to the baseline. Future adjustments after October 1,
2027, will be made as of October 1 on a two-year cadence, with the
target threshold being calculated based on cumulative CPI-W data
through August of the year in which the adjustment is made, relative to
the same initial baseline.
IV. Economic Analysis
The final rule updates certain dollar thresholds within the FDIC's
regulations to account for the effects of inflation since the
thresholds were first implemented or most recently amended. It also
establishes an indexing methodology to preserve these thresholds in
real terms going forward. To estimate the expected scope, benefits, and
costs of each amendment, the FDIC compared projected outcomes under the
final rule to a baseline scenario defined by the dollar thresholds in
the FDIC's current regulations.
A. Expected Scope of Impact
The final rule is expected to affect IDIs of varying sizes and
business models, as well as individuals and entities that interact with
the FDIC in applications, filings, or asset
[[Page 55802]]
transactions. To assess the expected scope, this analysis considers all
relevant regulations and financial conditions data for all IDIs as of
the quarter ending June 30, 2025. Specifically: \77\
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\77\ Unless otherwise specified, counts of IDIs are taken from
Reports of Condition and Income (Call Report) data for the quarter
ending June 30, 2025.
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<bullet> Part 303 (Filing Procedures): Applies broadly to IDIs and
other entities submitting applications or filings to the FDIC. As of
June 30, 2025, there were 4,430 IDIs. The FDIC lacks data on the number
of non-IDI applicants.
<bullet> Part 335 (Securities of State Nonmember Banks and Savings
Associations): Applies to State nonmember banks and State savings
associations with one or more classes of securities required to be
registered under section 12 of the Exchange Act.\78\ As of June 30,
2025, the FDIC supervises 2,808 IDIs that could potentially fall within
the scope of this threshold update.
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\78\ Section 12(b) or 12(g), 15 U.S.C. 78l(b), (g).
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<bullet> Part 340 (Restrictions on Sale of Assets of a Failed
Institution by the Federal Deposit Insurance Corporation): Applies to
persons (both individuals and entities) seeking to purchase assets of
failed IDIs in FDIC conservatorship or receivership. Based on counts of
submissions from 2019 through 2023, the FDIC estimates approximately
140 applicants may file part 340 Purchaser Eligibility Certifications
(PEC340) annually.
<bullet> Part 347 (International Banking): Subpart A to part 347
applies to insured State nonmember banks and their foreign branches. As
of June 30, 2025, there were 30 IDIs with foreign subsidiaries, of
which five are State nonmember banks subject to Subpart A to part 347.
<bullet> Part 363 (Annual Independent Audits and Reporting
Requirements): May apply to all IDIs, but with requirements for IDIs
that hold total consolidated assets in excess of $500 million and vary
by asset size.\79\ As of December 31, 2024, there were 4,496 IDIs, of
which 1,802 have total consolidated assets in excess of $500 million.
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\79\ Part 363 requires any IDI with total consolidated assets of
$500 million or more at the beginning of its fiscal year to comply
with the requirements therein. Therefore, the FDIC uses data as of
the quarter ending December 31, 2024, for purposes of estimating the
effects of the final rule on IDIs subject to part 363.
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<bullet> Part 380 (Orderly Liquidation Authority): Applies to
persons seeking to purchase assets of failed covered financial
companies in FDIC receivership under the Orderly Liquidation Authority.
Based on counts of submissions from 2021 through 2023, the FDIC
estimates approximately 66 applicants may file part 380 Purchaser
Eligibility Certification (PEC380) annually.
B. Estimates of the Number of Directly Affected Entities
This section provides the FDIC's estimates of the number of
institutions and other entities that may be directly affected by the
threshold updates under the final rule. Table 2 summarizes the
estimated changes in covered entities relative to current regulations.
These estimates rely on available supervisory and application data,
historical filing volumes, and conservative assumptions. Across all
parts of the FDIC's regulations, the threshold updates in the final
rule are expected to reduce the number of institutions subject to
certain compliance obligations under parts 303, 335, and 363, and
increase the number of entities eligible to engage in specific
activities under parts 340 and 380. The largest numerical change in
impacted entities will occur under part 363, where higher asset
thresholds are expected to reduce the applicable regulatory
requirements on several hundred IDIs.
Table 2--Summary of Estimated Changes in the Number of Covered Entities
--------------------------------------------------------------------------------------------------------------------------------------------------------
Current regulations (baseline) Updated regulations (final rule) Net effect
-------------------------------------------------------------------------- on number
of covered
FDIC Regulation or process 12 CFR Sec. entities *
Threshold Covered Threshold Covered (final
entities entities rule--
baseline)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Part 303--Filing Procedures........... Sec. 303.227(a)(2) & $2,500/$1,000........... 5 $3,500/$1,225........... 4/3 -1/-2
(b)(3)(i).
Part 335--Securities of State Sec. 335.801(d)........ >10% of the equity 9 >10% of the equity 9 0
Nonmember Banks and Savings capital accounts or $5 capital accounts or $10
Associations. million. million.
Part 340--Restrictions on Sale of Sec. 340.2(h).......... $50,000................. 140 $100,000................ 280 140
Assets of a Failed Institution by the
FDIC.
Part 347--International Banking....... Sec. 347.111(a)(1)..... $60 million; 25% of 5 $120 million............ 5 0
bank's Tier 1 capital.
Sec. 347.111(b)(1)..... $30 million; 5% of 5 $60 million............. 5 0
bank's Tier 1 capital.
Part 363--Annual Independent Audits Sec. 363.1(a).......... $500 million or more.... 1,802 $1 billion or more...... 1,024 -778
and Reporting Requirements. Sec. 363.2(b)(3)....... $1 billion or more...... 1,024 $5 billion or more...... 297 -727
Sec. 363.3(b).......... $1 billion or more...... 1,024 $5 billion or more...... 297 -727
Sec. 363.5(a)(2)....... $500 million or more but 778 $1 billion or more but 727 -51
less than $1 billion. less than $5 billion.
Sec. 363.5(a)(1)....... $1 billion or more...... 1,024 $5 billion or more...... 297 -727
Sec. 363.5(b).......... More than $3 billion.... 420 More than $5 billion.... 297 -123
Guideline 28(a)(4)....... $100,000................ 1,802 $120,000................ 1,802 0
Part 380--Orderly Liquidation Sec. 380.13(b)(6)...... $50,000................. 66 $100,000................ 132 66
Authority.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Positive values represent an increase in the number of covered entities attributable to the updated thresholds and negative values represent a
decrease in the number of covered entities.
Source: FDIC calculations.
[[Page 55803]]
Part 303--Filing Procedures
Section 303.227 establishes de minimis thresholds for covered
offenses under which a convicted person would not be required to submit
a section 19 application. The current thresholds are $2,500 and $1,000,
which the final rule increases to $3,500 and $1,225, respectively. From
the beginning of 2023 through the first half of 2025, the FDIC received
an average of five section 19 applications annually.\80\ Because
applications can be submitted by both IDIs and individuals, and
detailed attribution is unavailable, the FDIC conservatively assumes
each application represents a unique IDI. Assuming the number of
section 19 applications declines in proportion to the percentage
increases in the applicable thresholds--40 percent for the general de
minimis threshold and 22.5 percent for the small-dollar theft
threshold--the number of annual applications is expected to decline to
approximately four and three, respectively.
---------------------------------------------------------------------------
\80\ Section 19 of the FDI Act was significantly amended in
December of 2022 by the Fair Hiring in Banking Act. See Public Law
117-263, 136 Stat. 2395, 3411. In a change from the proposal, for
purposes of this estimation, the FDIC counts section 19 applications
from January 1, 2023, through June 30, 2025, or approximately 2.5
years, for a more accurate depiction of the current rate of
applications under the baseline. There were 13 total applications
over this time period. 13 applications/2.5 years [ap] 5 section 19
applications annually.
---------------------------------------------------------------------------
Part 335--Securities of State Nonmember Banks and Savings Associations
Section 335.801 requires disclosure of extensions of credit to
insiders in excess of certain thresholds. The final rule raises the
current threshold of $5 million to $10 million.\81\ The FDIC identified
nine IDIs \82\ that are subject to the requirements under the Exchange
Act and are therefore potentially affected. Because data on insider
indebtedness are unavailable, the FDIC conservatively assumes all nine
IDIs could be affected, though the actual number may be smaller.
Raising this threshold could reduce the number of required insider loan
disclosures for affected IDIs, although the extent of these reductions
may vary according to each IDI's characteristics.
---------------------------------------------------------------------------
\81\ The final rule does not change the parallel threshold of 10
percent of equity capital.
\82\ List of FDIC-Supervised Banks Filing under the Exchange
Act, available at <a href="https://www.fdic.gov/analysis/list-fdic-supervised-banks-filing-under-securities-exchange-act">https://www.fdic.gov/analysis/list-fdic-supervised-banks-filing-under-securities-exchange-act</a>.
---------------------------------------------------------------------------
Part 340--Restrictions on Sale of Assets of a Failed Institution by the
Federal Deposit Insurance Corporation
Section 340 restricts certain individuals and entities from
purchasing failed-bank assets if they caused a ``substantial loss'' to
an institution. The final rule raises the minimum threshold for
``substantial loss'' from $50,000 to $100,000. Based on historical
annual PEC340 submissions from 2019 through 2023, the FDIC estimates
approximately 140 submissions annually under the baseline. The volume
of submissions in future periods depends on financial and economic
conditions and the volume and characteristics of failed bank assets,
among other conditions, all of which are difficult to predict. For
analytical purposes, the FDIC assumes that the 100 percent increase in
the threshold corresponds to a proportional increase in submissions as
a result of the final rule, yielding an estimate of 280 unique entities
annually. The FDIC acknowledges uncertainty regarding the degree to
which the updated threshold will change the volume of submissions.
Part 347--International Banking
Section 347.111 establishes maximum thresholds for (a) aggregate
underwriting commitments and (b) the equity securities held for
distribution and dealing by foreign organizations held by insured State
nonmember banks. The final rule doubles the current limits of $60
million and $30 million to $120 million and $60 million, respectively.
Based on data from the Federal Financial Institutions Examination
Council 's National Information Center (NIC), the FDIC identified 30
IDIs with foreign subsidiaries, of which five are State nonmember banks
subject to part 347. Given information gaps on business activity, the
FDIC conservatively assumes all five banks would be affected.
Part 363--Annual Independent Audits and Reporting Requirements
Part 363 contains multiple dollar value thresholds tied to an IDI's
total consolidated assets as of the beginning of an IDI's most recent
fiscal year \83\ and one threshold related to compensation.
Specifically, the final rule:
---------------------------------------------------------------------------
\83\ See, e.g., 12 CFR 363.1.
---------------------------------------------------------------------------
<bullet> Updates the general applicability threshold from $500
million to $1 billion in total assets, removing 778 IDIs from the scope
of 12 CFR 363.1(a).
<bullet> Updates the total assets thresholds related to ICFR
assessment from $1 billion or more to $5 billion or more, removing 727
IDIs from the scope of 12 CFR 363.2(b)(3) and 12 CFR 363.3(b).\84\
---------------------------------------------------------------------------
\84\ For 12 CFR 363.2(b)(3), this threshold is referenced in
part 363, appendix A, paragraphs 8A and 10, as well as part 363,
appendix B, paragraph 2(b). For 12 CFR 363.3(b), this threshold is
referenced in part 363, appendix A, paragraph 18A, as well as part
363, appendix B, paragraph 2(b).
---------------------------------------------------------------------------
<bullet> Updates the applicable thresholds for minimum audit
committee requirements under 12 CFR 363.5(a)(2) for IDIs between $500
million to $1 billion in total assets to IDIs between $1 billion to $5
billion, removing a net of 51 IDIs from scope; and under 12 CFR
363.5(a)(1) for IDIs between $1 billion and $5 billion in total assets,
removing 727 IDIs from scope.\85\
---------------------------------------------------------------------------
\85\ These thresholds are referenced in part 363, appendix A,
paragraphs 27, 30(b), 30(c), 35(a), and 35(b). The 778 IDIs
currently subject to 12 CFR 363.5(a)(2) would no longer be subject
to these requirements, whereas the 727 IDIs with total assets
between $1 billion and $5 billion would now be subject to the
requirements under 12 CFR 363.5(a)(2). Therefore, the FDIC estimates
1,505 IDIs would be affected by this change.
---------------------------------------------------------------------------
<bullet> Updates the $3 billion threshold for additional audit
committee requirements to $5 billion, removing 123 IDIs from the scope
of 12 CFR 363.5(b).\86\
---------------------------------------------------------------------------
\86\ This threshold is referenced in part 363, appendix A,
paragraph 35(c).
---------------------------------------------------------------------------
<bullet> Updates the $100,000 compensation threshold for
independent directors under Guideline 28(a)(4) to $120,000.\87\
---------------------------------------------------------------------------
\87\ The FDIC does not have the data necessary to estimate the
number of potential directors of IDI audit committees that this
update would affect.
---------------------------------------------------------------------------
Part 380--Orderly Liquidation Authority
Part 380 restricts persons who participated in a transaction that
caused a substantial loss to a covered financial company under part 380
from acquiring any assets of a covered financial company under part
380. The final rule raises the minimum threshold of a ``substantial
loss'' from $50,000 to $100,000. As previously discussed, the FDIC
would receive PECs under part 380 only if it has been appointed
receiver for a covered financial company. Based on internal data, the
FDIC estimates 66 PEC submissions annually under the baseline.\88\ The
volume of submissions in future periods depends on financial and
economic conditions and the volume and characteristics of failed bank
assets, among other conditions, all of which are difficult to predict.
For analytical purposes, the FDIC assumes that the 100 percent increase
in the threshold corresponds to a proportional increase in submissions
as a result of the final rule, yielding an estimate of 132 unique
entities annually. The FDIC
[[Page 55804]]
acknowledges uncertainty regarding the degree to which the updated
threshold will change the volume of submissions.
---------------------------------------------------------------------------
\88\ The estimates of PEC submissions under part 380 are
predicated upon a potential invocation of the Orderly Liquidation
Authority. Office of Management and Budget, Information Collection
List, Covered Financial Company Asset Sales Prospective Purchaser
Eligibility Certification, available at <a href="https://www.reginfo.gov/public/do/PRAICList?ref_nbr=202311-3064-003">https://www.reginfo.gov/public/do/PRAICList?ref_nbr=202311-3064-003</a>.
---------------------------------------------------------------------------
Indexing Methodology
The final rule also implements an indexing methodology that
reflects inflation to make future automatic adjustments to most
thresholds discussed above.\89\ The FDIC does not have the information
necessary to precisely estimate the number of entities that will be
affected by future adjustments to these dollar thresholds due to
changes in inflation. However, since the indexing methodology under the
final rule aligns these dollar thresholds with their real values over
time, it will help ensure the number of entities subject to the
affected regulations remains consistent with the original policy
intent.
---------------------------------------------------------------------------
\89\ The dollar value threshold under 12 CFR part 363, appendix
A, paragraph 28(b)(4), pertaining to independence of management is
not scheduled to be periodically adjusted for inflation under the
final rule. This threshold was initially adopted to follow the
parallel threshold under the listing standards of national
securities exchanges. Therefore, the revision under the final rule
to increase this threshold from $100,000 to $120,000 brings it into
alignment with these parallel thresholds. See Nasdaq Stock Market
Rules, Rule 5605(a)(2), ``Definition of Independence;'' New York
Stock Exchange Listed Company Manual, section 303A.02(b)(ii),
``Independence Tests.''
---------------------------------------------------------------------------
C. Costs and Benefits of the Final Rule
The threshold updates in the final rule are intended to help
preserve certain threshold levels in the FDIC's regulations in real
terms to help maintain their intended application and policy
objectives. The FDIC expects that the overall effect will reduce
unnecessary compliance burden for IDIs, other financial institutions,
and certain persons.
Part 303--Filing Procedures
Updating de minimis thresholds is expected to reduce the number of
section 19 applications by an estimated one and two annually. This
would lower compliance costs for affected IDIs and individuals and
potentially provide more flexibility in hiring. Updating this threshold
would reduce the number of individuals screened through the section 19
process. The FDIC does not have the information necessary to fully
quantify such effects but concludes that the aggregate cost savings
associated with this change would be relatively minor.
Part 335--Securities of State Nonmember Banks and Savings Associations
Updating the materiality threshold for insider credit disclosures
from $5 million to $10 million would likely reduce the number of
disclosures for the estimated nine affected IDIs. This change would
modestly reduce compliance costs while better aligning reporting
requirements with the threshold level related to insider indebtedness
in real terms. Although fewer transactions would meet the disclosure
threshold, the FDIC expects that transparency into insider
relationships of supervisory concern would be preserved. Overall, the
FDIC views this as a modest refinement that reduces unnecessary
reporting without diminishing oversight effectiveness.
Part 340--Restrictions on Sale of Assets of a Failed Institution by the
Federal Deposit Insurance Corporation
Updating the minimum threshold for ``substantial loss'' from
$50,000 to $100,000 is expected to allow for more individuals and
entities to be eligible to purchase assets from failed institutions,
increasing competition and potentially raising bid prices. This would
benefit the DIF by improving recoveries. A potential cost is a modest
increase in the risk of sales to less-qualified buyers, but oversight
processes remain in place to mitigate this risk.
Part 347--International Banking
Updating underwriting and dealing limits for foreign subsidiaries
may permit State nonmember banks to engage in larger or more complex
cross-border transactions and improve competitiveness with foreign
institutions. These actions may then result in additional compliance
obligations for the State nonmember bank from foreign regulatory
regimes. However, these costs are expected to be modest relative to the
institutions' overall operating expenses and are likely to be one-time
or short-term in nature, reflecting transitional adjustments rather
than ongoing burdens. Moreover, because participation in such
activities remains discretionary and market-driven, IDIs are likely to
undertake them only when the expected returns outweigh these rather
incremental compliance costs.
Part 363--Annual Independent Audits and Reporting Requirements
The most substantial effects of the final rule are associated with
part 363, where updated asset thresholds are expected to significantly
reduce the number of IDIs subject to independent audit and reporting
requirements. Approximately 778 IDIs with assets between $500 million
and $1 billion, 727 IDIs with assets between $1 billion and $5 billion,
and 123 IDIs with assets between $3 billion to $5 billion would see
reduced compliance obligations. These changes would lower audit-related
costs and help preserve certain threshold levels in the FDIC's
regulations in real terms to help maintain their intended application
and policy objectives. While fewer mid-sized IDIs would be subject to
audit and reporting requirements, oversight of the largest and most
complex institutions would remain unchanged. Additionally, to the
extent that the appropriate Federal banking agency exercises its
discretion to provide exemptive relief to IDIs, as described above,
such relief may further attenuate compliance costs. The FDIC does not
expect these cost savings to be outweighed by any significant increase
in the risk profile of IDIs generally or any expected losses to the
DIF. As discussed above, the largest IDIs would see no change in
requirements. Due to the tailored and measured approach taken to the
update of thresholds contained in part 363, the FDIC concludes these
changes do not significantly increase risk to the DIF.
Part 380--Orderly Liquidation Authority
As with part 340, updating the minimum threshold for ``substantial
loss'' under part 380 would expand eligibility, increasing the number
of bidders for failed covered financial company assets. This could
improve asset recovery values. A potential cost is the inclusion of
some less-qualified buyers, though oversight mechanisms are expected to
limit this risk.
D. Overall Assessment
Across all parts of the FDIC's regulations, the threshold updates
provided by the final rule are expected to reduce compliance
obligations for many smaller institutions while expanding eligibility
for certain activities under parts 340 and 380. Table 2 shows that the
largest scope of affected entities arises from the amendments to part
363, where the final rule would result in hundreds of IDIs no longer
expected to be subject to enhanced audit and ICFR requirements.
Overall, the FDIC expects the changes to result in reductions in
regulatory burden.
The final rule is expected to yield positive net benefits by:
<bullet> Reducing compliance burden for hundreds of smaller and
mid-sized IDIs.
<bullet> Helping preserve threshold levels in the FDIC's
regulations in real terms to help maintain their intended application
and policy objectives.
[[Page 55805]]
<bullet> Enhancing market participation in asset sales, which could
improve recoveries to the DIF.
Any potential costs, such as marginal reductions in the frequency
of reporting or supervisory review, are expected to be limited in scope
and outweighed by the benefits of restoring and preserving threshold
levels with their intended application.
V. Administrative Law Matters
A. Administrative Procedure Act
The Administrative Procedure Act (APA) requires an agency to
publish a substantive rule not less than 30 days before its effective
date, except when an agency otherwise publishes in the final rule good
cause for providing for an earlier effective date.\90\ The FDIC finds
that there is good cause to dispense with the 30-day delayed effective
date generally prescribed by the APA for this final rule.
---------------------------------------------------------------------------
\90\ 5 U.S.C. 553(d).
---------------------------------------------------------------------------
The final rule updates for inflation the dollar thresholds used to
determine the applicability of certain regulatory requirements,
immediately relieving affected institutions and individuals of
reporting and compliance burdens. Delaying the effective date of the
final rule would impose unnecessary and avoidable costs on regulated
institutions and affected individuals. Specifically, a delayed
effective date could force institutions that would no longer be subject
to the revised thresholds to unnecessarily continue expending resources
to meet requirements to which they would no longer be subject. The
delayed effective date is both unnecessary and contrary to the public
interest because it perpetuates costs of regulatory compliance that
serve no prudential purposes. In addition, immediate effectiveness will
promote clarity and certainty for affected institutions as they plan
compliance activities for upcoming reporting and examination cycles.
Accordingly, the FDIC finds that a delayed effective date is both
unnecessary and contrary to the public interest. Therefore, the final
rule is effective as of the date set forth under the DATES heading,
above.
B. Congressional Review Act
Pursuant to the Congressional Review Act, the Office of Budget and
Management (OMB) makes a determination as to whether a final rule
constitutes a ``major rule,'' defined in the Congressional Review Act
as any rule that the Administrator of the Office of Information and
Regulatory Affairs of the OMB finds has resulted in or is likely to
result in (A) an annual effect on the economy of $100,000,000 or more;
(B) a major increase in costs or prices for consumers, individual
industries, Federal, State, or local government agencies or geographic
regions; or (C) significant adverse effects on competition, employment,
investment, productivity, innovation, or on the ability of United
States-based enterprises to compete with foreign-based enterprises in
domestic and export markets.\91\ If a rule is determined to be a
``major rule'' by OMB, the Congressional Review Act generally provides
that the rule may not take effect until at least 60 days following its
publication.\92\ If a rule is not a ``major rule,'' the rule may take
effect after the Federal agency submits to Congress a report required
under the Congressional Review Act.\93\
---------------------------------------------------------------------------
\91\ 5 U.S.C. 804(2).
\92\ 5 U.S.C. 801(a)(3).
\93\ 5 U.S.C. 801(a)(1).
---------------------------------------------------------------------------
OMB has determined the final rule is not a major rule under the
Congressional Review Act. Accordingly, the FDIC will submit the report
to Congress required by the Congressional Review Act and proposes an
effective date for the final rule as set forth under the DATES heading,
above.
C. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (PRA) \94\ states that no
agency may conduct or sponsor, nor is the respondent required to
respond to, an information collection unless it displays a currently
valid OMB control number. The FDIC reviewed the final rule and
determined that it revises certain information collection requests
previously cleared by OMB under the following OMB Control Nos.:
---------------------------------------------------------------------------
\94\ 44 U.S.C. 3501 through 3521.
1. 3064-0018: Application Pursuant to Section 19 of the Federal
Deposit Insurance Act
2. 3064-0030: Securities of State Nonmember Banks and State Savings
Associations
3. 3064-0113: External Audits
4. 3064-0194: Covered Financial Company Asset Purchaser Eligibility
Certification
The FDIC will submit the proposed revisions to these information
collections to OMB for review under section 3507(d) of the PRA \95\ and
5 CFR 1320.11 of the OMB's implementing regulations.\96\
---------------------------------------------------------------------------
\95\ 44 U.S.C. 3507(d).
\96\ 5 CFR 1320.11.
---------------------------------------------------------------------------
Proposed Revisions to Existing Information Collections
Title of Information Collection: Application Pursuant to Section 19
of the Federal Deposit Insurance Act.
OMB Number: 3064-0018.
Affected Public: IDIs and individuals.
Current Actions: The final rule revises the currently approved
information collection as follows:
The final rule updates the threshold for certain offenses under
which no application to the FDIC under section 19 of the FDI Act is
required. By updating the dollar threshold for the de minimis
exception, the final rule decreases the number of respondents required
to submit applications to the FDIC. Based on the final rule as well as
historical data, the FDIC estimates a decrease from 43 respondents to
17 respondents, resulting in a total annual burden for OMB No. 3064-
0018 of 272 hours, a decrease of 416 hours.\97\
---------------------------------------------------------------------------
\97\ FDIC Application Pursuant to Section 19 of the Federal
Deposit Insurance Act, OMB No. 3064-0018, available at <a href="https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202407-3064-005">https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202407-3064-005</a>.
---------------------------------------------------------------------------
Title of Information Collection: Securities of State Nonmember
Banks and State Savings Associations.
OMB Number: 3064-0030.
Affected Public: Insured State nonmember banks and State savings
associations.
Current Actions: The final rule revises the currently approved
information collection as follows:
The final rule updates the thresholds for disclosure requirements
for extensions of credit to insiders from in excess of 10 percent of
the capital account of an institution or $5 million, whichever is less,
to 10 percent of the capital account of an institution or $10 million.
Raising this threshold decreases the total information the FDIC
requests from the affected respondents; therefore, it is a substantive
modification to the previously approved information collection titled
``14A Proxy Statements.'' As such, the FDIC is required to submit the
information collection for review and approval by OMB.\98\ However,
based on available historical data, similar reporting requirements
imposed by the SEC, and the FDIC's supervisory experience and
expertise, the FDIC does not anticipate a change in the burden
estimates for this information collection.
---------------------------------------------------------------------------
\98\ 5 CFR 1320.5(g).
Title of Information Collection: External Audits.
OMB Number: 3064-0113.
Affected Public: All insured financial institutions with total
assets of $1 billion or more and other insured
[[Page 55806]]
financial institutions with total assets of less than $1 billion that
voluntarily choose to comply.
Current Actions: The final rule revises the currently approved
information collection as follows:
The final rule updates several thresholds in part 363. It raises
the general applicability thresholds from $500 million to $1 billion,
the ICFR asset threshold from $1 billion to $5 billion, and thresholds
related to audit committee composition generally from $500 million to
$1 billion, and from $1 billion and $3 billion to $5 billion. By
raising the thresholds in part 363, the final rule changes several
existing information collections under OMB Control No. 3064-0113 by
changing the number of respondents or changing the reporting
requirements. Accordingly, the FDIC will revise the categories of the
existing information collections to better align with proposed rule's
updated thresholds. The updated burden estimates and the information
collection categories are as follows:
Table 3--Summary of Estimated Annual Burden
[OMB No. 3064-0113]
----------------------------------------------------------------------------------------------------------------
Type of burden Number of Average time Annual
Information Collection (IC) (frequency of Number of responses per per response burden
(obligation to respond) response) respondents respondent (HH:MM) (hours)
----------------------------------------------------------------------------------------------------------------
Institutions With $10 Billion or More in Total Consolidated Assets
----------------------------------------------------------------------------------------------------------------
1. Annual Report, 12 CFR part 363 Recordkeeping 161 1 150:00 24,150
(Mandatory). (Annual).
2. Annual Report, 12 CFR part 363 Reporting (Annual). 161 1 150:00 24,150
(Mandatory).
3. Audit Committee Composition, Recordkeeping 161 1 03:00 483
12 CFR part 363 (Mandatory). (Annual).
4. Audit Committee Composition, Reporting (Annual). 161 1 03:00 483
12 CFR part 363 (Mandatory).
5. Filing of Other Reports, 12 Recordkeeping 161 1 00:08 21
CFR part 363 (Mandatory). (Annual).
6. Filing of Other Reports, 12 Reporting (Annual). 161 1 00:08 21
CFR part 363 (Mandatory).
7. Notice of Change in Recordkeeping 40 1 00:15 10
Accountants, 12 CFR part 363 (Annual).
(Mandatory).
8. Notice of Change in Reporting (Annual). 40 1 00:15 10
Accountants, 12 CFR part 363
(Mandatory).
----------------------------------------------------------------------------------------------------------------
Institutions With $5 Billion to Less Than $10 Billion in Total Consolidated Assets
----------------------------------------------------------------------------------------------------------------
9. Annual Report, 12 CFR part 363 Recordkeeping 136 1 125:00 17,000
(Mandatory). (Annual).
10. Annual Report, 12 CFR part Reporting (Annual). 136 1 125:00 17,000
363 (Mandatory).
11. Audit Committee Composition, Recordkeeping 136 1 03:00 408
12 CFR part 363 (Mandatory). (Annual).
12. Audit Committee Composition, Reporting (Annual). 136 1 03:00 408
12 CFR part 363 (Mandatory).
13. Filing of Other Reports, 12 Recordkeeping 136 1 00:08 18
CFR part 363 (Mandatory). (Annual).
14. Filing of Other Reports, 12 Reporting (Annual). 136 1 00:08 18
CFR part 363 (Mandatory).
15. Notice of Change in Recordkeeping 34 1 00:15 9
Accountants, 12 CFR part 363 (Annual).
(Mandatory).
16. Notice of Change in Reporting (Annual). 34 1 00:15 9
Accountants, 12 CFR part 363
(Mandatory).
----------------------------------------------------------------------------------------------------------------
Institutions With $1 Billion to Less Than $5 Billion in Total Consolidated Assets
----------------------------------------------------------------------------------------------------------------
17. Annual Report, 12 CFR part Recordkeeping 727 1 12:30 9,088
363 (Mandatory). (Annual).
18. Annual Report, 12 CFR part Reporting (Annual). 727 1 12:30 9,088
363 (Mandatory).
19. Audit Committee Composition, Recordkeeping 727 1 01:00 727
12 CFR part 363 (Mandatory). (Annual).
20. Audit Committee Composition, Reporting (Annual). 727 1 01:00 727
12 CFR part 363 (Mandatory).
21. Filing of Other Reports, 12 Recordkeeping 727 1 00:08 97
CFR part 363 (Mandatory). (Annual).
22. Filing of Other Reports, 12 Reporting (Annual). 727 1 00:08 97
CFR part 363 (Mandatory).
23. Notice of Change in Recordkeeping 182 1 00:15 46
Accountants, 12 CFR part 363 (Annual).
(Mandatory).
24. Notice of Change in Reporting (Annual). 182 1 00:15 46
Accountants, 12 CFR part 363
(Mandatory).
----------------------------------------------------------------------------------------------------------------
Institutions With Less Than $1 Billion of Total Consolidated Assets
----------------------------------------------------------------------------------------------------------------
25. Filing of Other Reports, 12 Recordkeeping 3,472 1 00:15 868
CFR part 363 (Voluntary). (Annual).
26. Filing of Other Reports, 12 Reporting (Annual). 3,472 2 00:15 1,736
CFR part 363 (Voluntary).
---------------------------------------------------------
Total Annual Burden (Hours).. ................... ............ ............... .............. 106,718
----------------------------------------------------------------------------------------------------------------
Source: FDIC.
Note: The estimated annual IC time burden is the product, rounded to the nearest hour, of the estimated annual
number of responses and the estimated time per response for a given IC. The estimated annual number of
responses is the product, rounded to the nearest whole number, of the estimated annual number of respondents
and the estimated annual number of responses per respondent. This methodology ensures the estimated annual
burdens in the table are consistent with the values recorded in OMB's consolidated information system.
Based on the final rule, the FDIC estimates a total annual burden
for OMB Control No. 3064-0113 of 106,718 hours, resulting in a burden
decrease of 31,496 hours from the most recent PRA renewal.\99\
---------------------------------------------------------------------------
\99\ FDIC External Audits, OMB No. 3064-0113, available at
<a href="https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202207-3064-004">https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202207-3064-004</a>.
Title of Information Collection: Covered Financial Company Asset
Sales Purchaser Eligibility Certification.
OMB Number: 3064-0194.
Affected Public: Any individual or entity that is a potential
purchaser of assets from (1) the FDIC as receiver for a Covered
Financial Company (CFC); or (2) a bridge financial company (BFC) that
requires the approval of the FDIC, as receiver for the predecessor CFC
and as the sole shareholder of the BFC (e.g., the BFC's sale of a
significant business line).
Current Actions: The final rule updates the currently approved
information collection as follows:
The final rule updates the ``substantial loss'' threshold in 12 CFR
380.13 by raising the existing threshold from $50,000 to $100,000.
Raising this threshold decreases the total information the FDIC
requests from the affected respondents; therefore, it is a substantive
modification to the previously approved information collection titled
``Covered Financial Company Asset Sales Purchaser Eligibility
Certification.'' \100\ As such, the FDIC is required to submit the
information collection for review and approval by OMB.\101\ The FDIC
does not anticipate a change in the burden
[[Page 55807]]
estimates for this information collection. This determination is based
on the FDIC supervisory experience and analysis of prospective
respondents.
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\100\ FDIC Covered Financial Company Asset Purchaser Eligibility
Certification, OMB No. 3064-0194, available at <a href="https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202311-3064-003">https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202311-3064-003</a>.
\101\ 44 U.S.C. 3507(d).
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D. Regulatory Flexibility Act Analysis
The Regulatory Flexibility Act (RFA) generally requires that an
agency, in connection with a final rule, to prepare and make available
for public comment a final regulatory flexibility analysis that
describes the impact of the final rule on small entities.\102\ However,
a final regulatory flexibility analysis is not required if the agency
certifies that the final rule will not, if promulgated, have a
significant economic impact on a substantial number of small entities.
The Small Business Administration (SBA) has defined ``small entities''
to include banking organizations with total assets of less than or
equal to $850 million.\103\ Generally, the FDIC considers a significant
economic impact to be a quantified effect in excess of 5 percent of
total annual salaries and benefits or 2.5 percent of total noninterest
expenses. The FDIC concludes that effects in excess of one or more of
these thresholds typically represent significant economic impacts for
IDIs.
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\102\ 5 U.S.C. 601 et seq.
\103\ The SBA defines a small banking organization as having
$850 million or less in assets and determines an organization's
assets by averaging the assets reported on its four quarterly
financial statements for the preceding year. See 13 CFR 121.201 (as
amended by 87 FR 69118, effective December 19, 2022). Following
these regulations, the FDIC uses an IDI's affiliated and acquired
assets, averaged over the preceding four quarters, to determine
whether the IDI is ``small'' for the purposes of the RFA.
---------------------------------------------------------------------------
To evaluate the impact of this final rule on small entities, this
analysis considers all relevant regulations and guidance applicable to
these institutions, together with financial data for all IDIs as of the
quarter ending June 30, 2025.
Part 303--Filing Procedures
Section 303.227 establishes criteria for de minimis exemptions
under section 19 of the FDI Act, including thresholds of $2,500 and
$1,000 for certain offenses exempt from the requirement to submit a
section 19 application to the FDIC. As previously discussed, the final
rule updates these thresholds to $3,500 and $1,225, respectively.
To estimate potential effects, the FDIC reviewed the number of
section 19 applications received over the period from the beginning of
2023 through June 30, 2025. The FDIC received 13 applications (an
average of five annually) submitted by individuals or IDIs.\104\ As
discussed in the Economic Analysis section (section IV of this
SUPPLEMENTARY INFORMATION), the FDIC assumes that each application is
submitted by a unique IDI, which serves as a conservative estimate of
the number of potentially affected entities.
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\104\ Section 19 of the FDI Act was significantly amended in
December of 2022 by the Fair Hiring in Banking Act. See Public Law
117-263, 136 Stat. 2395, 3411. For purposes of this estimation, the
FDIC counts section 19 applications from January 1, 2023 through
June 30, 2025, or approximately 2.5 years, for a more accurate
depiction of the current rate of applications under the baseline.
There were 13 total applications over this time period. 13
applications/2.5 years [ap] 5 section 19 applications annually.
---------------------------------------------------------------------------
For the purposes of this analysis the FDIC assumes the number of
section 19 applications declines in proportion to the percentage
increases in the applicable thresholds. As previously discussed, the
final rule increases the de minimis threshold by 40 percent; therefore,
the FDIC estimates that this aspect of the final rule reduces annual
section 19 applications by two, to three. Further, the final rule
increases the small-dollar theft threshold by 22.5 percent; therefore,
the FDIC estimates that this aspect of the final rule reduces annual
section 19 application by one, to four.\105\ The FDIC does not have the
information necessary to determine the degree to which the changes to
the two de minimis exemption criteria may interact. Based on Call
Report data from June 30, 2025, approximately 70 percent of all IDIs
are considered small entities for the purposes of the RFA.\106\
Accordingly, the FDIC estimates that up to two small IDIs would no
longer need to submit a section 19 application under the final
rule.\107\ Based on an estimated 16 hours per application for
compliance activities under section 19 \108\ and a wage rate of
$103.70/hour,\109\ the FDIC estimates total annual cost savings of
approximately $3,318.40 across the affected institutions, or
approximately $1,659.20 per small IDI.\110\ Given the limited number of
affected entities and relatively modest cost savings, the FDIC
concludes that these updates do not have a significant economic impact
on small IDIs.
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\105\ For the general de minimis threshold: 5 estimated annual
section 19 applications x (1-0.4, or 40%) = 3 section 19
applications. For the small-dollar theft threshold: 5 estimated
annual section 19 applications x (1-0.225, or 22.5%) = 3.875, or
approximately 4, section 19 applications.
\106\ FDIC Call Report Data, June 30, 2025.
\107\ Five section 19 applications from unique IDIs x 70 percent
of all IDIs classified as small [ap] four small IDIs. A 22.5-percent
reduction, corresponding to an increase in the de minimis small-
dollar theft threshold from $1,000 to $1,225, would result in three
small IDIs estimated under the final rule. A 40-percent reduction,
corresponding to an increase in the general de minimis exemption
threshold from $2,500 to $3,500, would result in two small IDIs
estimated under the final rule.
\108\ Information collection request ICR 3064-0018 at <a href="https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202407-3064-005">https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202407-3064-005</a>.
\109\ Bureau of Labor Statistics: National Industry-Specific
Occupational Employment and Wage Estimates: Industry: Credit
Intermediation and Related Activities (5221 and 5223 only) (May
2024), Employer Cost of Employee Compensation (March 2024), and
Employment Cost Index (March 2024 and June 2025). For this ICR, the
FDIC estimated the following labor allocation for entities complying
with these requirements: Executives and Managers (11-0000): 10
percent; Lawyers (23-0000): 20 percent; Compliance Officers (13-
1040): 60 percent; and Clerical Workers (43-0000): 10 percent.
\110\ Estimated 16 hours per section 19 application x $103.70/
hour wage rate = Estimated $1,659.20 per application. The FDIC
estimates 1 and 2 small entities annually will incur receive cost
savings from the final rule's changes to part 303. 1 small entity x
$1,659.20 = $1,659.20. 2 small entities x $1,659.20 = $3,318.40.
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Part 335--Securities of State Nonmember Banks and Savings Associations
Section 335.801 establishes a threshold for disclosures related to
extensions of credit to insiders. As previously discussed, the final
rule updates the dollar-based threshold from $5 million to $10 million.
The FDIC identified nine FDIC-supervised IDIs \111\ subject to the
disclosure requirements under the Exchange Act. Of these, one is
classified as a small entity for the purposes of the RFA. While the
FDIC does not have the information necessary to estimate the change in
how many loans to insiders will be reported under the final rule, it
finds that the final rule does not have a substantive impact on small
FDIC-supervised IDIs because (1) this specific disclosure is just one
component of a much larger disclosure--proxy statements--which is
otherwise entirely unaffected by the final rule; and (2) it only
affects one FDIC-supervised IDI.
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\111\ See <a href="https://www.fdic.gov/analysis/list-fdic-supervised-banks-filing-under-securities-exchange-act">https://www.fdic.gov/analysis/list-fdic-supervised-banks-filing-under-securities-exchange-act</a> for the list of IDIs.
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Part 340--Restrictions on Sale of Assets of a Failed Institution by the
Federal Deposit Insurance Corporation
Section 340 relates to restrictions on the sale of failed bank
assets to certain persons that have caused a ``substantial loss'' to an
institution. ``Substantial loss'' is currently defined as greater than
$50,000 in losses, unpaid final judgments, delinquent obligations, or
deficiency balance following a foreclosure. As previously discussed,
the final rule updates this threshold to greater than $100,000.
Based on historical annual PEC340 submissions from 2019 through
2023, the FDIC receives approximately 140 submissions annually. As
discussed in
[[Page 55808]]
the Economic Analysis section (section IV of this SUPPLEMENTARY
INFORMATION), 70 percent of all IDIs are considered small for the
purposes of the RFA.\112\ Therefore, assuming each is submitted by a
unique entity, the FDIC estimates that approximately 98 PEC340s are
submitted by small entities.\113\
---------------------------------------------------------------------------
\112\ FDIC Call Report Data, June 30, 2025.
\113\ 140 estimated PEC340 submissions by IDIs x 70 percent = 98
``small'' IDIs.
---------------------------------------------------------------------------
The FDIC estimates that an entity will incur 30 minutes of labor to
submit a PEC340 to the FDIC.\114\ Employing a wage rate of $163.50/
hour,\115\ the FDIC estimates total annual costs of approximately
$8,011.50 across the affected institutions, or approximately $81.75 per
small IDI.\116\ The FDIC concludes that the final rule does not have a
substantive impact on small IDIs because the final rule affects a
relatively small number small IDIs--just over three percent of all
small IDIs.\117\
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\114\ Information collection request ICR 3064-0135 at <a href="https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202111-3064-002">https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202111-3064-002</a>.
\115\ Bureau of Labor Statistics: National Industry-Specific
Occupational Employment and Wage Estimates: Industry: Credit
Intermediation and Related Activities (5221 and 5223 only) (May
2024), Employer Cost of Employee Compensation (March 2024), and
Employment Cost Index (March 2024 and June 2025). For this ICR, the
FDIC estimated the following labor allocation for entities complying
with these requirements: Executives and Managers (11-0000): 10
percent; and Purchasing Managers (11-3060): 90 percent.
\116\ Estimated 98 small IDIs submitting PEC340s x 30 minutes
per PEC340 submission = 49 hours. 49 x $163.50 = $8,011.50 in total
annual costs. $8,011.50/98 small IDIs = $81.75 per small IDI.
\117\ FDIC Call Report Data, June 30, 2025. 98 estimated small
IDIs submitting PEC340s/3,092 ``small'' IDIs [ap] 3.17 percent of
small IDIs.
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Part 347--International Banking
Section 347.111 contains two relevant thresholds applicable to
foreign organizations held by uninsured State nonmember banks: the
aggregate underwriting commitment limit of $60 million and the
distribution and dealing limit of $30 million. As previously discussed,
the final rule updates both thresholds to $120 million and $60 million,
respectively.
Based on data from the NIC, the FDIC identified five State
nonmember banks with foreign subsidiaries subject to these provisions,
none of which are classified as small for the purposes of the RFA.\118\
Consequently, the FDIC finds that these updates do not affect any small
FDIC-supervised IDIs.
---------------------------------------------------------------------------
\118\ Federal Reserve National Information Center data as of
June 30, 2025. See <a href="https://www.ffiec.gov/npw/">https://www.ffiec.gov/npw/</a> for more information.
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Part 363--Annual Independent Audits and Reporting Requirements
As previously discussed, the final rule updates several dollar
thresholds under part 363.\119\ Among these, the most relevant for
small entities are the updates in the asset-size threshold from $500
million to $1 billion for: Annual audit requirements under 12 CFR
363.1(a), and audit committee requirements under 12 CFR 363.5(a)(2).
---------------------------------------------------------------------------
\119\ Part 363 requires any IDI with total consolidated assets
of $500 million or more at the beginning of its fiscal year to
comply with the requirements therein. Therefore, the FDIC uses data
as of the quarter ending December 31, 2024, for purposes of
estimating the effects of the final rule on small IDIs subject to
part 363.
---------------------------------------------------------------------------
As of December 31, 2024, 556 small IDIs report between $500 million
and $1 billion in assets. These institutions would no longer be subject
to the requirements under part 363. Based on estimates of 28 hours per
year for compliance activities under part 363 \120\ and a wage rate of
$99.49 per hour,\121\ the FDIC estimates annual cost savings of
approximately $1.55 million across affected institutions, or
approximately $2,800 per small IDI.\122\ The FDIC finds these updates
to the thresholds do not have a significant effect on small IDIs.
---------------------------------------------------------------------------
\120\ Information collection request ICR 3064-0113 at <a href="https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202207-3064-004">https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202207-3064-004</a>.
\121\ Bureau of Labor Statistics: National Industry-Specific
Occupational Employment and Wage Estimates: Industry: Credit
Intermediation and Related Activities (5221 and 5223 only) (May
2024), Employer Cost of Employee Compensation (March 2024), and
Employment Cost Index (March 2024 and June 2025). See Table 2 of the
FDIC's Supporting Statement at <a href="https://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=202207-3064-004">https://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=202207-3064-004</a> for information on the labor
allocations for this ICR.
\122\ 556 small IDIs x 28 hours in cost savings = 15,568 hours
in annual compliance cost savings. 15,568 hours x $99.48 per hour =
$1,548,704.64, or approximately $1.55 million. $1.55 million/556
small IDIs = $2,787.77, or approximately $2,800.
---------------------------------------------------------------------------
Part 380--Orderly Liquidation Authority
Part 380 defines ``substantial loss'' for restrictions on the sale
of failed financial company assets. As previously discussed, the final
rule updates this threshold from $50,000 to $100,000.
Based on PEC380 submissions, the FDIC estimates approximately 66
submissions annually. Assuming each is submitted by a unique entity and
using the FDIC's previous estimate that 70 percent of all IDIs are
small,\123\ the FDIC estimates that approximately 46 PEC380s are
submitted by small IDIs.\124\
---------------------------------------------------------------------------
\123\ FDIC Call Report Data, June 30, 2025.
\124\ 66 estimated PEC380 submissions by IDIs x 70 percent =
46.2, or approximately 46 ``small'' IDIs.
---------------------------------------------------------------------------
The FDIC estimates that an entity will incur 2.5 hours of labor to
submit a PEC380 to the FDIC.\125\ Employing a wage rate of $111.94 per
hour,\126\ the FDIC estimates total annual costs of approximately
$12,873.10 across the affected institutions, or approximately $279.85
per small IDI.\127\ The FDIC concludes that the final rule does not
have a substantive impact on small IDIs because the final rule only
affects about one and a half percent of all small IDIs.\128\
---------------------------------------------------------------------------
\125\ Information collection request ICR 3064-0194 at <a href="https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202311-3064-003">https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202311-3064-003</a>.
\126\ Bureau of Labor Statistics: National Industry-Specific
Occupational Employment and Wage Estimates: Industry: Credit
Intermediation and Related Activities (5221 and 5223 only) (May
2024), Employer Cost of Employee Compensation (March 2024), and
Employment Cost Index (March 2024 and June 2025). For this ICR, the
FDIC estimated the following labor allocation for entities complying
with these requirements: Executives and Managers (11-0000): 10
percent; Lawyers (23-0000): 10 percent; Compliance Officers (13-
1040): 10 percent; and Financial Analysts (13-2051): 70 percent.
\127\ Estimated 46 small IDIs submitting PEC380s x 2.5 hours per
PEC380 submission = 115 hours. 115 x $111.94 = $12,873.10 in total
annual costs. $12,873.10/46 small IDIs = $279.85 per small IDI.
\128\ FDIC Call Report Data, June 30, 2025. 46 estimated small
IDIs submitting PEC380s/3,092 ``small'' IDIs [ap] 1.49 percent of
small IDIs.
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Summary of Effects on Small Entities
As of the quarter ending June 30, 2025, the FDIC insured 4,430
institutions, of which 3,092 are considered small for the purposes of
the RFA. As of the same period the FDIC supervised 2,808 institutions,
2,085 are classified as small.\129\ The FDIC estimates that the final
rule's threshold updates in parts 303, 340, 363, and 380 will affect a
limited subset of small entities, resulting in minor compliance cost
savings or modest incremental costs, not to exceed $2,800, with parts
347 and 335 impacting zero to one small IDIs.\130\
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\129\ FDIC Call Report Data, June 30, 2025.
\130\ Certain aspects of the final rule, such as those
pertaining to section 19 and PEC submissions under parts 303, 340,
and 380, may affect individuals. The RFA applies to a small entity,
which is defined in 5 U.S.C. 601(6) as having ``the same meaning as
the terms `small business', `small organization' and `small
governmental jurisdiction' defined in paragraphs (3), (4) and (5)
of'' 5 U.S.C. 601. As such, a rule or information collection that
affects only natural persons does not affect any small entities.
---------------------------------------------------------------------------
Even assuming each small IDI was simultaneously affected by all
applicable provisions, the estimated cumulative annual cost change,
approximately $4,097.60 per institution,\131\ would not exceed five
percent of total annual salaries and benefits or 2.5 percent of total
noninterest expenses for the vast majority of small IDIs.\132\
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\131\ Approximately $4,459.20 in estimated annual cost savings
(parts 303 and 363)-$361.60 in estimated annual costs (parts 340 and
380) = $4,097.60.
\132\ The estimated cumulative annual cost change would exceed
one of these two thresholds at just three of the 3,092 ``small''
IDIs identified by the FDIC.
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[[Page 55809]]
Accordingly, the FDIC certifies that this final rule does not have
a significant economic impact on a substantial number of small entities
and, therefore, a final regulatory flexibility analysis is not
required.
E. Plain Language
Section 722 of the Gramm-Leach-Bliley Act requires Federal banking
agencies to use plain language in all proposed and final rules
published after January 1, 2000. The FDIC invited comments regarding
the use of plain language but did not receive any relevant comments.
The FDIC sought to clearly state the provisions of the rule in a simple
and straightforward manner, using plain language as much as possible.
F. Riegle Community Development and Regulatory Improvement Act of 1994
Section 302 of the Riegle Community Development and Regulatory
Improvement Act of 1994 (RCDRIA) requires that the Federal banking
agencies, including the FDIC, in determining the effective date and
administrative compliance requirements of new regulations that impose
additional reporting, disclosure, or other requirements on IDIs,
consider, consistent with principles of safety and soundness and the
public interest, any administrative burdens that such regulations would
place on depository institutions, including small depository
institutions, and customers of depository institutions, as well as the
benefit of such regulations. New regulations and amendments to
regulations prescribed by a Federal banking agency that impose
additional reporting, disclosure, or other new requirements on IDI
shall take effect on the first day of a calendar quarter that begins on
or after the date on which the regulations are published in final form,
with certain exceptions, including for good cause.
The final rule does not impose additional reporting, disclosure, or
other new requirements on IDIs. As such, the provisions of RCDRIA do
not apply to the FDIC's determination of the final rule's effective
date.
G. Executive Orders 12866 and 13563
Under Executive Order 12866, as affirmed and supplemented by
Executive Order 13563, ``significant regulatory actions'' are subject
to review by OMB.
The FDIC has submitted this regulatory action to OMB for review.
OMB has determined the rule is not a significant regulatory action as
defined by section 3(f) of Executive Order 12866. For more information
on the analysis conducted in connection with Executive Order 12866,
refer to other sections of this SUPPLEMENTARY INFORMATION.
H. Executive Order 14192
Executive Order 14192 directs agencies, unless prohibited by law,
to identify at least 10 existing regulations to be repealed when the
agency publicly proposes for notice and comment or otherwise
promulgates a new regulation with total costs greater than zero.
Executive Order 14192 further requires that new incremental costs
associated with new regulations shall, to the extent permitted by law,
be offset by the elimination of existing costs associated with at least
10 prior regulations. An Executive Order 14192 deregulatory action is
an action that has been finalized and has total costs less than zero.
This final rule is considered an Executive Order 14192 deregulatory
action.
List of Subjects
12 CFR Part 303
Administrative practice and procedure, Bank deposit insurance,
Banks, banking, Reporting and recordkeeping requirements, Savings
associations.
12 CFR Part 314
Accounting, Administrative practice and procedure, Authority
delegations (Government agencies), Bank deposit insurance, Banks,
banking, Brokers, Confidential business information, Credit, Foreign
banking, Holding companies, Insurance, Investments, Reporting and
recordkeeping requirements, Savings associations, Securities, Trusts
and trustees.
12 CFR Part 335
Accounting, Banks, banking, Confidential business information,
Reporting and recordkeeping requirements, Securities.
12 CFR Part 340
Banks, banking, Reporting and recordkeeping requirements.
12 CFR Part 347
Authority delegations (Government agencies), Bank deposit
insurance, Banks, banking, Credit, Foreign banking, Investments,
Reporting and recordkeeping requirements, U.S. investments abroad.
12 CFR Part 363
Accounting, Administrative practice and procedure, Banks, banking,
Reporting and recordkeeping requirements.
12 CFR Part 380
Brokers, Holding companies, Insurance, Investments, Trusts and
trustees.
Authority and Issuance
For the reasons set forth in the preamble, the Board of Directors
of the Federal Deposit Insurance Corporation amends 12 CFR chapter III
as follows:
PART 303--FILING PROCEDURES
0
1. The authority citation for part 303 continues to read as follows:
Authority: 12 U.S.C. 378, 1464, 1813, 1815, 1817, 1818, 1819(a)
(Seventh and Tenth), 1820, 1823, 1828, 1829, 1831a, 1831e, 1831o,
1831p-1, 1831w, 1835a, 1843(l), 3104, 3105, 3108, 3207, 5414, 5415,
and 15 U.S.C. 1601-1607.
Sec. 303.227 [Amended]
0
2. Amend Sec. 303.227 by:
0
a. In paragraph (a)(2), removing ``$2,500'' and adding in its place
``$3,500, as adjusted from time to time in accordance with 12 CFR
314.1,''.
0
b. In paragraph (b)(3)(i), removing ``$1,000'' and adding in its place
``$1,225, as adjusted from time to time in accordance with 12 CFR
314.1,''.
0
3. Add part 314 to read as follows:
PART 314--INDEXING OF SPECIFIED REGULATORY THRESHOLDS
Sec.
314.1 Threshold indexing.
314.2 [Reserved]
Authority: 12 U.S.C. 378, 1464, 1813, 1815, 1817, 1818, 1819,
1819(a) (Seventh and Tenth), 1820, 1821(p), 1823, 1828, 1829, 1831a,
1831e, 1831m, 1831o, 1831p-1, 1831w, 1835a, 1843(l), 3103, 3104,
3105, 3108, 3109, 3207, 5385(h), 5389, 5390(s)(3), 5390(b)(1)(C),
5390(a)(7)(D), 5381(b), 5390(r), 5390(a)(16)(D), 5414, 5415, and 15
U.S.C. 78j-1, 78l(i), 78m, 78n, 78p, 78w, U.S.C. 1601-1607, 5412,
5414, 5415, 7241, 7242, 7243, 7244, 7261, 7262, 7264, and 7265; Pub
L. No. 111-203, section 939A, 124 Stat. 1376, 1887 (July 21, 2010)
(codified 15 U.S.C. 78o-7 note).
Sec. 314.1 Threshold indexing.
(a) Methodology. The dollar thresholds specified in paragraph (c)
of this section shall be adjusted by multiplying the baseline threshold
values specified in paragraph (c) of this section by one plus the
cumulative percent change in the non-seasonally adjusted Consumer Price
Index for Urban Wage Earners and Clerical Workers, measured from the
effective date of this rule, as further described in paragraph (b) of
this section, and shall
[[Page 55810]]
be rounded in accordance with paragraph (d) of this section.
(b) Frequency--(1) In general--biennial adjustments. Except as
otherwise provided in paragraph (b)(2), (b)(3), or (b)(4) of this
section, the adjustments described in paragraph (a) of this section
shall be effective on October 1 following each consecutive two-year
period ending August 30, and using the non-seasonally adjusted Consumer
Price Index for Urban Wage Earners and Clerical Workers as of August 30
of that year.
(2) 2027 adjustment. The first adjustment described in paragraph
(a) of this section, which shall be effective on October 1, 2027, shall
be made using one plus the cumulative percent change in the non-
seasonally adjusted Consumer Price Index for Urban Wage Earners and
Clerical Workers through August 30, 2027.
(3) Periods of high inflation--annual adjustments. If the
cumulative percent change of the non-seasonally adjusted Consumer Price
Index for Urban Wage Earners and Clerical Workers, measured over the
12-month period ending August 30 following the year in which the most
recent adjustment was made exceeds 8 percent, then the dollar
thresholds shall be adjusted in accordance with paragraph (a) of this
section using the cumulative percent change of the non-seasonally
adjusted Consumer Price Index for Urban Wage Earners and Clerical
Workers, measured over the 12-month period ending August 30 with an
effective date of October 1 following the year in which the most recent
adjustment was made.
(4) Periods of negative inflation--no adjustments. Notwithstanding
paragraph (b)(1) or (b)(2) of this section, if an adjustment of dollar
thresholds using the cumulative percent change of the non-seasonally
adjusted Consumer Price Index for Urban Wage Earners and Clerical
Workers from the effective date of this rule or the most recent
adjustment, as applicable, would not result in an increase from the
current dollar thresholds, no adjustment will be made pursuant to
paragraph (a) of this section.
(c) Specified thresholds. The thresholds in the following sections
shall be adjusted in accordance with paragraph (a) of this section
relative to the baseline threshold values as of January 1, 2026,
specified in paragraphs (c)(1) through (31) of this section:
(1) Section 303.227(a)(2) of this chapter, baseline threshold value
$3,500;
(2) Section 303.227(b)(3)(i) of this chapter, baseline threshold
value $1,225;
(3) Section 335.801(d) of this chapter, baseline threshold value
$10,000,000;
(4) Section 340.2(h)(1) of this chapter, baseline threshold value
$100,000;
(5) Section 340.2(h)(2) of this chapter, baseline threshold value
$100,000;
(6) Section 340.2(h)(3) of this chapter, baseline threshold value
$100,000;
(7) Section 340.2(h)(4) of this chapter, baseline threshold value
$100,000;
(8) Section 347.111(a)(1) of this chapter, baseline threshold value
$120,000,000;
(9) Section 347.111(b)(1) of this chapter, baseline threshold value
$60,000,000;
(10) Section 363.1(a) of this chapter, baseline threshold value
$1,000,000,000;
(11) Section 363.2(b)(3) of this chapter, baseline threshold value
$5,000,000,000;
(12) Section 363.3(b) of this chapter, baseline threshold value
$5,000,000,000;
(13) Section 363.4(a)(2) of this chapter, baseline threshold value
$5,000,000,000;
(14) Section 363.4(c)(3) of this chapter, baseline threshold value
$5,000,000,000;
(15) Section 363.5(a)(1) of this chapter, baseline threshold value
$5,000,000,000;
(16) Both thresholds in Sec. 363.5(a)(2) of this chapter, baseline
threshold values of $1,000,000,000 or more but less than
$5,000,000,000;
(17) Section 363.5(b) of this chapter, baseline threshold value
$5,000,000,000;
(18) Both thresholds in paragraph (8)(A) of appendix A of part 363
of this chapter, baseline threshold value $5,000,000,000;
(19) Paragraph (10) of appendix A of part 363 of this chapter,
baseline threshold value $5,000,000,000;
(20) Paragraph (18)A of appendix A of part 363 of this chapter,
baseline threshold value $5,000,000,000;
(21) All three thresholds in paragraph (27) of appendix A of part
363 of this chapter, with the first baseline threshold value being
$5,000,000,000 or more and the second and third baseline threshold
values being $1,000,000,000 or more but less than $5,000,000;
(22) Paragraph (30)(b) of appendix A of part 363 of this chapter,
baseline threshold value $5,000,000,000;
(23) Both thresholds in paragraph (30)(c) of appendix A of part 363
of this chapter, baseline threshold value $1,000,000,000 or more but
less than $5,000,000,000;
(24) Paragraph (35)(a) of appendix A of part 363 of this chapter,
baseline threshold value $1,000,000,000;
(25) Paragraph (35)(b) of appendix A of part 363 of this chapter,
baseline threshold value $5,000,000,000;
(26) Paragraph (35)(c) of appendix A of part 363 of this chapter,
baseline threshold value $5,000,000,000;
(27) Paragraph 2(b) of appendix B of part 363 of this chapter,
baseline threshold value $5,000,000,000;
(28) Section 380.13(b)(6)(i) of this chapter, baseline threshold
value $100,000;
(29) Section 380.13(b)(6)(ii) of this chapter, baseline threshold
value $100,000;
(30) Section 380.13(b)(6)(iii) of this chapter, baseline threshold
value $100,000; and
(31) Section 380.13(b)(6)(iv) of this chapter, baseline threshold
value $100,000.
(d) Rounding. When adjusting thresholds under this section, each
threshold shall be rounded based on the size of the threshold (e.g.,
thousands, millions, billions) to the nearest number with two
significant digits.
(e) Effective date of threshold adjustments. The FDIC shall
announce the thresholds adjusted in accordance with this section by
publishing in the Federal Register a final rule without notice and
comment. Such adjusted thresholds shall be effective on October 1 of
the year during which an adjustment is made.
(f) Failure to publish final rule in Federal Register. In the
event, for any reason, a final rule is not published in the Federal
Register in a year in which an adjustment is made under this section,
the thresholds specified in paragraph (c) of this section will adjust
as provided in this section and be effective on October 1,
notwithstanding the lack of a final rule published in the Federal
Register.
Sec. 314.2 [Reserved]
PART 335--SECURITIES OF STATE NONMEMBER BANKS AND STATE SAVINGS
ASSOCIATIONS
0
4. The authority citation for part 335 continues to read as follows:
Authority: 12 U.S.C. 1819, 15 U.S.C. 78j-1, 78l(i), 78m, 78n,
78p, 78w, 5412, 5414, 5415, 7241, 7242, 7243, 7244, 7261, 7262,
7264, and 7265.
Sec. 335.801 [Amended]
0
5. In Sec. 335.801(d) introductory text, remove ``$5 million,'' and
add in its place ``$10 million, as adjusted from time to time in
accordance with 12 CFR 314.1,''.
[[Page 55811]]
PART 340--RESTRICTIONS ON SALE OF ASSETS OF A FAILED INSTITUTION BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION
0
6. The authority citation for part 340 continues to read as follows:
Authority: 12 U.S.C. 1819 (Tenth), 1821(p).
Sec. 340.2 [Amended]
0
7. In Sec. 340.2(h), remove ``$50,000'' wherever it appears and add in
its place ``$100,000, as adjusted from time to time in accordance with
12 CFR 314.1''.
PART 347--INTERNATIONAL BANKING
0
8. The authority citation for part 347 continues to read as follows:
Authority: 12 U.S.C. 1813, 1815, 1817, 1819, 1820, 1828, 3103,
3104, 3105, 3108, 3109; Pub L. No. 111-203, section 939A, 124 Stat.
1376, 1887 (July 21, 2010) (codified 15 U.S.C. 78o-7 note).
Sec. 347.111 [Amended]
0
9. Amend Sec. 347.111 by:
0
a. In paragraph (a)(1), removing ``$60 million'' and adding in its
place ``$120 million, as adjusted from time to time in accordance with
12 CFR 314.1,''; and
0
b. In paragraph (b)(1) introductory text, removing ``$30 million'' and
adding in its place ``$60 million, as adjusted from time to time in
accordance with 12 CFR 314.1,''.
PART 363--ANNUAL INDEPENDENT AUDITS AND REPORTING REQUIREMENTS
0
10. The authority citation for part 363 continues to read as follows:
Authority: 12 U.S.C. 1831m.
Sec. 363.1 [Amended]
0
11. In Sec. 363.1(a), remove ``$500 million'' and add in its place
``$1 billion, as adjusted from time to time in accordance with 12 CFR
314.1,''.
Sec. 363.2 [Amended]
0
12. In Sec. 363.2(b)(3) introductory text, remove ``$1 billion'' and
add in its place ``$5 billion, as adjusted from time to time in
accordance with 12 CFR 314.1,''.
Sec. 363.3 [Amended]
0
13. In Sec. 363.3(b) introductory text, remove ``$1 billion'' and add
in its place ``$5 billion, as adjusted from time to time in accordance
with 12 CFR 314.1,''.
Sec. 363.4 [Amended]
0
14. Amend Sec. 363.4 by:
0
a. In paragraph (a)(2), removing ``$1 billion'' and adding in its place
``$5 billion, as adjusted from time to time in accordance with 12 CFR
314.1,''; and
0
b. In paragraph (c)(3), removing ``$1 billion'' and adding in its place
``$5 billion, as adjusted from time to time in accordance with 12 CFR
314.1,''.
Sec. 363.5 [Amended]
0
15. Amend Sec. 363.5 by:
0
a. In paragraph (a)(1), removing ``$1 billion'' and adding in its place
``$5 billion, as adjusted from time to time in accordance with 12 CFR
314.1,'';
0
b. In paragraph (a)(2), removing ``$500 million'' and adding in its
place ``$1 billion, as adjusted from time to time in accordance with 12
CFR 314.1,'';
0
c. In paragraph (a)(2), removing ``$1 billion'' and adding in its place
``$5 billion, as adjusted from time to time in accordance with 12 CFR
314.1,''; and
0
d. In paragraph (b), removing ``$3 billion'' and adding in its place
``$5 billion, as adjusted from time to time in accordance with 12 CFR
314.1,''.
0
16. Add Sec. 363.6 to read as follows:
Sec. 363.6 Discretion to exempt certain insured depository
institutions from this part.
If an insured depository institution likely will no longer be
subject to a requirement of this part as a result of the application of
a threshold adjusted in accordance with Sec. 314.1 of this chapter
that is scheduled to occur during the insured depository institution's
current fiscal year, the appropriate Federal banking agency with
respect to the insured depository institution may exercise discretion
to not require compliance from the insured depository institution with
respect to such requirement as of the beginning of the insured
depository institution's current fiscal year. If the insured depository
institution's total assets exceed such a threshold subsequent to the
threshold adjustment occurring, the insured depository institution
would be required to comply with the relevant requirement
notwithstanding this section, unless the appropriate Federal banking
agency again drew the same conclusion with respect to a future
threshold adjustment.
Appendix A to Part 363 [Amended]
0
17. Amend appendix A to part 363 by:
0
a. In paragraph 8A introductory text, removing ``$1 billion'', wherever
it appears, and adding in its place ``$5 billion, as adjusted from time
to time in accordance with 12 CFR 314.1,'';
0
b. In paragraph 10, removing ``$1 billion'' and adding in its place
``$5 billion, as adjusted from time to time in accordance with 12 CFR
314.1,'';
0
c. In paragraph 18A introductory text, removing ``$1 billion'' and
adding in its place ``$5 billion, as adjusted from time to time in
accordance with 12 CFR 314.1,'';
0
d. In paragraph 27:
0
i. Removing ``$1 billion'', wherever it appears, and adding in its
place ``$5 billion, as adjusted from time to time in accordance with 12
CFR 314.1,''; and
0
ii. Removing ``$500 million'' and adding in its place ``$1 billion, as
adjusted from time to time in accordance with 12 CFR 314.1,'';
0
e. In paragraph 28(b)(4), removing ``$100,000'' and adding in its place
``$120,000'';
0
f. In paragraph 30(b), removing ``$1 billion'' and adding in its place
``$5 billion, as adjusted from time to time in accordance with 12 CFR
314.1,'';
0
g. In paragraph 30(c):
0
i. Removing ``$500 million'' and adding in its place ``$1 billion, as
adjusted from time to time in accordance with 12 CFR 314.1,''; and
0
ii. Removing ``$1 billion'' and adding in its place ``$5 billion, as
adjusted from time to time in accordance with 12 CFR 314.1,'';
0
h. In paragraph 35(a) introductory text, removing ``$500 million'' and
adding in its place ``$1 billion, as adjusted from time to time in
accordance with 12 CFR 314.1,'';
0
i. In paragraph 35(b), removing ``$1 billion'' and adding in its place
``$5 billion, as adjusted from time to time in accordance with 12 CFR
314.1,''; and
0
j. In paragraph 35(c), removing ``$3 billion'' and adding in its place
``$5 billion, as adjusted from time to time in accordance with 12 CFR
314.1,''.
Appendix B to Part 363 [Amended]
0
18. In appendix B to part 363, paragraph 2(b), remove ``$1 billion''
and add in its place ``$5 billion, as adjusted from time to time in
accordance with 12 CFR 314.1,''.
PART 380--ORDERLY LIQUIDATION AUTHORITY
0
19. The authority citation for part 380 continues to read as follows:
Authority: 12 U.S.C. 5385(h); 12 U.S.C. 5389; 12 U.S.C.
5390(s)(3); 12 U.S.C. 5390(b)(1)(C); 12 U.S.C. 5390(a)(7)(D); 12
U.S.C. 5381(b); 12 U.S.C. 5390(r); 12 U.S.C. 5390(a)(16)(D).
Sec. 380.13 [Amended]
0
20. In Sec. 380.13(b)(6), remove ``$50,000'' wherever it appears and
add in its place ``$100,000, as adjusted from time to time in
accordance with 12 CFR 314.1''.
Federal Deposit Insurance Corporation.
By order of the Board of Directors.
[[Page 55812]]
Dated at Washington, DC, on November 25, 2025.
Jennifer M. Jones,
Deputy Executive Secretary.
[FR Doc. 2025-21914 Filed 12-3-25; 8:45 am]
BILLING CODE 6714-01-P
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</html>Indexed from Federal Register on December 4, 2025.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.