The Federal Reserve Board, the OCC and the FDIC (collectively, the "agencies") issued an interim final rule to excuse community banks that were affected by government policy responses to COVID-19 from the regulatory requirements that apply to institutions with over $10 billion in assets.
As described in the interim final rule, community banking organizations that had under $10 billion in total assets as of December 31, 2019 can use their asset data as of that date to determine the applicable regulatory asset thresholds and reporting requirements for calendar years 2020 and 2021.
The agencies found that many community banking organizations have crossed the $10 billion asset regulatory threshold due to policy responses to COVID-19, including the Paycheck Protection Program. The agencies stated that if additional regulation or reporting requirements were to apply to community banks as a result of their balance sheet growth, such organizations would incur "significant transition and compliance costs."
The interim final rule will go into effect on the date of its publication in the Federal Register and the comment period will close 60 days thereafter.
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