FDIC GRANTS RELIEF FROM CERTAIN AUDIT AND REPORTING REQUIREMENTS
FOR IMMEDIATE RELEASE PR-9-96 (2-6-96)
The FDIC Board of Directors today agreed to provide relief
from audit and reporting requirements for certain sound, well-
managed banks. These amendments to Part 363 of the FDIC's
regulations implement various provisions of the Riegle Community
Development and Regulatory Improvement Act of 1994. Today's
actions also resulted from the FDIC's own efforts to review its
regulations and eliminate unnecessary requirements.
Existing FDIC rules in part require each FDIC-insured
institution with $500 million or more in total assets to submit
every year reports by management and an independent public
accountant on internal controls and compliance with designated
laws. However, most institutions with less than $9 billion in
total assets may satisfy this reporting requirement if its parent
holding company files these reports on its behalf.
One change adopted today by the FDIC provides that if an
insured institution has more than $9 billion in total assets and is
highly rated under the interagency rating system, the institution
also can be included in the holding company's reports on internal
controls and compliance instead of having to file its own reports.
This exception is intended to relieve duplicative reporting
requirements for the largest, well-managed institutions that are
subsidiaries of multibank holding companies. Approximately 70
institutions are affected by this change.
The amendment also streamlines and reformats specific
procedures that independent accountants must perform to help
regulators determine compliance with designated laws. These
changes are expected to provide regulatory relief for approximately
1,000 FDIC-insured banks and savings associations. The FDIC has
separately asked the Congress to eliminate these specific
procedures as part of a regulatory burden relief proposal.
In addition, the FDIC today agreed to make reporting less
burdensome for 1995 by permitting institutions to follow the new
procedures, the existing regulation or the similar procedures
issued for public comment last February. This will help reduce the
reporting burden for the vast majority of institutions that issue
reports on a calendar-year basis and are now in the process of
preparing annual reports for 1995. Any institution with a fiscal
year that ends after March 31, 1996, however, is expected to follow
the new rules, which become effective April 1, 1996.
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Congress created the Federal Deposit Insurance Corporation in 1933
to maintain public confidence in the nation's banking system. The
FDIC insures deposits at the nation's 12,000 banks and savings
associations and it promotes the safety and soundness of these
institutions by identifying, monitoring and addressing risks to
which they are exposed.