Notice of Proposed Rulemaking on Adjusting and Indexing Certain Regulatory Thresholds

35449

Federal Register / Vol. 90, No. 142 / Monday, July 28, 2025 / Proposed Rules

Document

ADAMS

Accession No./

FEDERAL REG-

ISTER Citation

PRM–50–124, Ralph O. Meyer, Petition for Rulemaking, dated August 1, 2022 ...........................................................................

ML22284A087

PRM–50–124, ‘‘Licensing Safety Analysis for Loss-of-Coolant Accidents,’’ notice of docketing and request for comments,

dated November 23, 2022.

87 FR 71531

PRM–50–124, ‘‘Licensing Safety Analysis for Loss-of-Coolant Accidents,’’ extension of comment period, dated February 2,

2023.

88 FR 7012

Nuclear Energy Institute, Request for Extension of the Comment Period for PRM–50–124, dated January 23, 2023 .................

ML23023A275

Comment (001) from Ralph Meyer on PRM–50–124, dated October 12, 2022 ..............................................................................

ML23009B712

Comment (002) from Ralph Meyer on PRM–50–124, dated January 12, 2023 ..............................................................................

ML23031A196

Comment (003) from Zachary Harper of Westinghouse on PRM–50–124, dated February 2, 2023 .............................................

ML23058A228

Comment (004) from Gayle Elliott on behalf of Framatome Inc., dated February 23, 2023 ...........................................................

ML23061A128

Comment (005) from Mike Powell on behalf of Pressurized Water Reactors Owners Group on PRM–50–124, dated March 1,

2023.

ML23062A715

Comment (006) from Frances Pimentel on Behalf of Nuclear Energy Institute on PRM–50–124, dated March 3, 2023 ..............

ML23062A716

Comment (007) from Ralph Meyer on PRM–50–124, dated March 14, 2023 ................................................................................

ML23074A071

Comment (008) from Ralph Meyer on PRM–50–124, dated July 26, 2023 ...................................................................................

f Nuclear Energy Institute on PRM–50–124, dated March 3, 2023 ..............

ML23062A716

Comment (007) from Ralph Meyer on PRM–50–124, dated March 14, 2023 ................................................................................

ML23074A071

Comment (008) from Ralph Meyer on PRM–50–124, dated July 26, 2023 ....................................................................................

ML23209A607

Comment (009) from Ralph Meyer on PRM–50–124, dated September 11, 2023 .........................................................................

ML23254A398

Comment (010) from Ralph Meyer and Wolfgang Wiesenack on PRM–50–124—Licensing Safety Analysis for Loss-of-Coolant

Accidents, dated January 18, 2024.

ML24024A061

Comment (011) from Ralph Meyer on PRM–50–124—Licensing Safety Analysis for Loss-of-Coolant Accidents .........................

ML24100A815

Comment (012) Ralph Meyer on PRM–50–124—Licensing Safety Analysis for Loss-of-Coolant Accidents .................................

ML24239A784

SECY–21–0109, ‘‘Rulemaking Plan on Use of Increased Enrichment of Conventional and Accident Tolerant Fuel Designs for

Light-Water Reactors,’’ dated December 20, 2021.

ML21232A237

SRM–SECY–21–0109, ‘‘Staff Requirements—SECY–21–0109—Rulemaking Plan on Use of Increased Enrichment of Conven-

tional and Accident Tolerant Fuels Designs for Light-Water Reactors,’’ dated March 16, 2022.

ML22075A103

SECY–16–0033, ‘‘Draft Final Rule—Performance-Based Emergency Core Cooling System Requirements and Related Fuel

Cladding Acceptance Criteria (RIN 3150–AH42),’’ dated March 16, 2016.

ML15238A947

(Package)

SRM–SECY–16–0033, ‘‘Staff Requirements—SECY–16–0033—Draft Final Rule—Performance-Based Emergency Core Cool-

ing System Requirements and Related Fuel Cladding Acceptance Criteria (RIN 3150–AH42)

SECY–16–0033, ‘‘Draft Final Rule—Performance-Based Emergency Core Cooling System Requirements and Related Fuel

Cladding Acceptance Criteria (RIN 3150–AH42),’’ dated March 16, 2016.

ML15238A947

(Package)

SRM–SECY–16–0033, ‘‘Staff Requirements—SECY–16–0033—Draft Final Rule—Performance-Based Emergency Core Cool-

ing System Requirements and Related Fuel Cladding Acceptance Criteria (RIN 3150–AH42).

ML24102A281

SECY–15–0148, ‘‘Evaluation of Fuel Fragmentation, Relocation and Dispersal Under Loss-Of-Coolant Accident (LOCA) Con-

ditions Relative to the Draft Final Rule on Emergency Core Cooling System Performance During a LOCA (50.46c),’’ dated

November 30, 2015.

ML15230A200

NRC Research Information Letter 2021–13, ‘‘Interpretation of Research on Fuel Fragmentation, Relocation, and Dispersal at

High Burnup,’’ dated December 2021.

ML21313A145

NRC Memorandum from Paul M. Clifford to William H. Ruland, ‘‘ECCS Performance Safety Assessment and Audit Report,’’

dated February 10, 2012.

ML12041A078

G. Hache and H.M. Chung, ‘‘The History of LOCA Embrittlement Criteria,’’ NUREG/CP–0172, May 2001, pp. 205–237 ............

ML011370559

VI. Conclusion

For the reasons cited in this

document, the NRC is denying PRM–

50–124. The petition did not present

any significant new information or

arguments that would warrant the

requested amendment.

Dated: July 24, 2025.

For the Nuclear Regulatory Commission.

Carrie Safford,

Secretary of the Commission.

[FR Doc. 2025–14215 Filed 7–25–25; 8:45 am]

BILLING CODE 7590–01–P

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: Notice of proposed rulemaking.

SUMMARY: The Federal Deposit

Insurance Corporation (FDIC) is inviting

comment on a proposed rule that would

amend certain regulatory thresholds in

the FDIC’s regulations to reflect

inflation

Parts 303, 314, 335, 340, 347,

363, and 380

RIN 3064–AG15

Adjusting and Indexing Certain

Regulatory Thresholds

AGENCY: Federal Deposit Insurance

Corporation.

ACTION: Notice of proposed rulemaking.

SUMMARY: The Federal Deposit

Insurance Corporation (FDIC) is inviting

comment on a proposed rule that would

amend certain regulatory thresholds in

the FDIC’s regulations to reflect

inflation. Specifically, the proposal

would generally update such thresholds

to reflect inflation from the date of

initial implementation or the most

recent adjustment, and provide for

future adjustments pursuant to an

indexing methodology. The changes set

forth in this proposal would provide a

more durable regulatory framework by

helping to preserve, in real terms, the

level of certain thresholds set forth in

the FDIC’s regulations, 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: Comments must be received on

or before September 26, 2025.

ADDRESSES: You may submit comments,

identified by RIN 3064–AG15, by any of

the following methods:

• FDIC Website: https://

www.fdic.gov/federal-register-

publications. Follow instructions for

submitting comments on the agency

website.

• Email: Comments@fdic.gov. Include

RIN 3064–AG15 in the subject line of

the message.

• Mail: Jennifer M. Jones, Deputy

Executive Secretary, Attention:

Comments—RIN 3064–AG15, Federal

Deposit Insurance Corporation, 550 17th

Street NW, Washington, DC 20429.

• Hand Delivery to FDIC: Comments

may be hand-delivered to the guard

station at the rear of the 550 17th Street

NW building (located on F Street) on

business days between 7 a.m. and 5 p.m.

• Public Inspection: Comments

received, including any personal

information provided, may be posted

without change to https://www.fdic.gov/

federal-register-publications

Street NW, Washington, DC 20429.

• Hand Delivery to FDIC: Comments

may be hand-delivered to the guard

station at the rear of the 550 17th Street

NW building (located on F Street) on

business days between 7 a.m. and 5 p.m.

• Public Inspection: Comments

received, including any personal

information provided, may be posted

without change to https://www.fdic.gov/

federal-register-publications.

Commenters should submit only

information that the commenter wishes

to make available publicly. The FDIC

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Federal Register / Vol. 90, No. 142 / Monday, July 28, 2025 / Proposed Rules

1 See e.g., 12 CFR 337.12(b) (classifying

institutions with less than $10 million in assets as

small for examination cycle purpose); 12 CFR

327.8(e) (classifying institutions with assets of $10

billion or more as large for assessment purposes).

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 84 FR

59230 (Nov. 1, 2019).

4 Specifically, under 12 CFR 303.227, the

requirements of Section 19 do not apply to covered

offenses where an 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.

5 5 U.S.C. 553(b); see also 5 U.S.C

et 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.

5 5 U.S.C. 553(b); see also 5 U.S.C. 553(B)

(providing exception where agency for good cause

finds notice and comment is ‘‘impracticable,

unnecessary, or contrary to public interest’’).

6 See e.g., 12 U.S.C. 1819(a) (Seventh and Tenth).

7 12 U.S.C. 2901 et seq.

8 Specifically, this adjustment corresponds to the

average of the Consumer Price Index for Urban

Wage Earners and Clerical Workers (CPI–W), 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).

9 Specifically, this threshold was adjusted to

correspond to the year-to-year change in the average

of the CPI–W, not seasonally adjusted, with

rounding to the nearest $100 million. See 84 FR

54465, 54468 (Oct. 10, 2019).

may review, redact, or refrain from

posting all or any portion of any

comment that it may deem to be

inappropriate for publication, such as

irrelevant or obscene material. The FDIC

may post only a single representative

example of identical or substantially

identical comments, and in such cases

will generally identify the number of

identical or substantially identical

comments represented by the posted

example. All comments that have been

redacted, as well as those that have not

been posted, that contain comments on

the merits of the proposed rule will be

retained in the public comment file and

will be considered as required under all

applicable laws. All comments may be

accessible under the Freedom of

Information Act

ntical or substantially identical

comments represented by the posted

example. All comments that have been

redacted, as well as those that have not

been posted, that contain comments on

the merits of the proposed rule will be

retained in the public comment file and

will be considered as required under all

applicable laws. All comments may be

accessible under the Freedom of

Information Act.

FOR FURTHER INFORMATION CONTACT:

Andrew Carayiannis, Chief, Policy &

Risk Analytics Section; Bryan Jonasson,

Deputy Chief Accountant; Keith

Bergstresser, Senior Policy 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; Ryan Tetrick, Deputy Director,

Division of Complex Institution

Supervision and Resolution; Alex

Greenberg, Assistant Director, Brock

Walker, Assistant Director, Division of

Resolutions and Receiverships;

capitalmarkets@fdic.gov, (202) 898–

6888; Federal Deposit Insurance

Corporation, 3701 Fairfax Drive,

Arlington, VA 22203.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Introduction

A. Background

B. Considerations for Updating and

Indexing Thresholds

C. Overview of the Proposal and Policy

Objectives

II. Initial Updates

A. 12 CFR Part 303 (Part 303)—Filing

Procedures

B. 12 CFR Part 335 (Part 335)—Securities

of State Nonmember Banks and Savings

Associations

C. 12 CFR Part 340 (Part 340)—Restrictions

on Sale of Assets of a Failed Institution

by the Federal Deposit Insurance

Corporation

D. 12 CFR Part 347 (Part 347)—

International Banking

E. 12 CFR Part 363 (Part 363)—Annual

Independent Audits and Reporting

Requirements

F. 12 CFR Part 380 (Part 380)—Orderly

Liquidation Authority

G. Additional Thresholds

III. Indexing Methodology for Future

Threshold Adjustments

A. Description of Methodology

B. Alternatives to the Proposed Indexing

Methodology

1

nsurance

Corporation

D. 12 CFR Part 347 (Part 347)—

International Banking

E. 12 CFR Part 363 (Part 363)—Annual

Independent Audits and Reporting

Requirements

F. 12 CFR Part 380 (Part 380)—Orderly

Liquidation Authority

G. Additional Thresholds

III. Indexing Methodology for Future

Threshold Adjustments

A. Description of Methodology

B. Alternatives to the Proposed Indexing

Methodology

1. Alternative Measures of Inflation

2. Adjustment Frequency Within the

Indexing Methodology

3. Milestone Approach

4. Degree of Automation in Indexing

IV. Economic Analysis

A. Expected Effects

B. Estimates of the Number of Directly

Affected Entities

1. Part 303

2. Part 335

3. Part 340

4. Part 347

5. Part 363

6. Part 380

C. Costs and Benefits of the Proposal

1. Part 303

2. Part 335

3. Part 340

4. Part 347

5. Part 363

6. Part 380

V. Administrative Matters

A. Paperwork Reduction Act

B. Regulatory Flexibility Act Analysis

C. Plain Language

D. Riegle Community Development and

Regulatory Improvement Act of 1994

E. Executive Orders 12866 and 13563

F. Providing Accountability Through

Transparency Act of 2023

I. Introduction

A. Background

Thresholds are used to determine the

scope of applicability for certain

regulations promulgated by the FDIC.

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 size 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

nonbank assets or cross-jurisdictional

activities.2 Combining thresholds in this

manner helps to support a regulatory

framework that is tailored to the risks

presented by an individual institution

or categories of institutions.3

While most thresholds set a general

level of applicability for a regulation, in

some instances, thresholds are applied

within a regulation to establish

exclusions

onbank assets or cross-jurisdictional

activities.2 Combining thresholds in this

manner helps to support a regulatory

framework that is tailored to the risks

presented by an individual institution

or categories of institutions.3

While most thresholds set a general

level of applicability for a regulation, in

some instances, thresholds are applied

within a regulation to establish

exclusions, provide for optionality, or to

tailor individual requirements within a

broad-based regulation to the varying

sizes and risk profiles of all in-scope

institutions. For example, as discussed

further below, thresholds of $2,500 and

$1,000 are used to define certain

offenses that are exempt from the

application requirements of section 19

of the Federal Deposit Insurance Act

(FDI Act), as implemented by 12 CFR

part 303.4

Under the FDIC’s regulations, most

thresholds are static, with no

mechanism for periodic adjustments

over time. To adjust a static threshold,

the FDIC must, in general, provide

notice and seek comment on such

adjustment before it can be

implemented as final.5 However, certain

thresholds within the FDIC regulations

are required by statute and therefore

cannot be adjusted without legislative

changes.6

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,7 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.8 As an additional example, the

FDIC adjusted 12 CFR part 348,

Management Official Interlocks (Part

348), in 2019 to increase asset-based

thresholds that had been established in

1996.9 Part 348 further provides that the

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he year-to-year change in

inflation through a Federal Register

notice.8 As an additional example, the

FDIC adjusted 12 CFR part 348,

Management Official Interlocks (Part

348), in 2019 to increase asset-based

thresholds that had been established in

1996.9 Part 348 further provides that the

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10 Part 348 further indicates the FDIC will

announce the revised thresholds by publishing a

final rule without notice and comment in the

Federal Register. 12 CFR 348.3(c).

11 Certain thresholds under the proposal would be

updated initially to reflect other considerations. For

example, as discussed in section II.E 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. See infra, n. 45.

12 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. See, U.S. Social Security

Administration, CPI for Urban Wage Earners and

Clerical Workers, available at www.ssa.gov/oact/

STATS/cpiw.html.

13 Any references to inflation in this proposal

refer to inflation as measured under the CPI–W,

unless specifically noted otherwise.

14 The EGRPRA requires that regulations

prescribed by the Federal Financial Institutions

Examination Council, Office of the Comptroller of

the Currency, Federal Deposit Insurance

Corporation, and Board of Governors of the Federal

Reserve System be reviewed by the agencies not

less frequently than once every 10 years

nflation as measured under the CPI–W,

unless specifically noted otherwise.

14 The EGRPRA requires that regulations

prescribed by the Federal Financial Institutions

Examination Council, Office of the Comptroller of

the Currency, Federal Deposit Insurance

Corporation, and Board of Governors of the Federal

Reserve System be reviewed by the agencies not

less frequently than once every 10 years. The

purpose of the EGRPRA review is to identify

outdated or unnecessary regulations and consider

how to reduce regulatory burden on insured

depository institutions while, at the same time,

ensuring their safety and soundness and the safety

and soundness of the financial system.

15 As discussed in section II.E of this

SUPPLEMENTARY INFORMATION, the initial updates to

thresholds in part 363 would 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 part

363 that is intended to align to listing standards of

the national securities exchanges would not be

subject to the proposed indexing methodology.

FDIC will adjust such asset thresholds,

as necessary, based on inflation.10

B. Considerations 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 without periodic

adjustments to reflect inflation do not

preserve threshold levels in real terms,

leading to unintended policy

consequences. For example, smaller and

mid-size institutions can become subject

to requirements originally intended for

relatively larger institutions, thereby

increasing burden for reasons unrelated

to changes in their inflation-adjusted

size or risk profile

lds without periodic

adjustments to reflect inflation do not

preserve threshold levels in real terms,

leading to unintended policy

consequences. For example, smaller and

mid-size institutions can become subject

to requirements originally intended for

relatively larger institutions, thereby

increasing burden for reasons unrelated

to changes in their inflation-adjusted

size or risk profile.

Adjusting regulatory thresholds to

reflect inflation would help ensure that

they preserve their intended application

in real terms over time and remain

generally aligned with their intended

policy objectives. However, if not

properly structured, inflation-based

adjustments also can lead to unintended

and undesirable outcomes. For example,

adjusting regulatory thresholds too

frequently and in the absence of

meaningful inflation can result in

inefficiencies, as institutions may incur

cost to frequently realign their balance

sheet management practices to reflect

adjusted thresholds. By contrast,

adjustments that are infrequent and do

not sufficiently keep pace with inflation

result in thresholds that are continually

decreasing in real terms in the time

period between adjustments. 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 inflation-

based 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

ion-

based 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 and Policy

Objectives

The FDIC is proposing to update

certain regulatory thresholds and

provide automatic adjustments to those

thresholds over time using an indexing

methodology. Under the proposal, the

FDIC would initially update such

thresholds to reflect historical

inflation 11 (measured as the percentage

change in the non-seasonally adjusted

Consumer Price Index for Urban Wage

Earners and Clerical Workers (CPI–

W)),12 generally based off the date of

initial implementation or the most

recent quantitative adjustment.

Additionally, the FDIC is proposing an

indexing methodology for subsequent,

periodic threshold adjustments that

would be implemented automatically

every two consecutive calendar years, or

during any intervening calendar year

when the cumulative change in CPI–W

since the last adjustment increases by

more than 8 percent.13

The adjustments provided for in this

proposal are intended to help preserve,

in real terms, certain threshold levels in

the FDIC’s regulations, thereby avoiding

the undesirable and unintended

outcome 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.

The proposal is the first of a multi-

phase effort to reevaluate thresholds

within the FDIC’s regulations. The

thresholds selected for this initial phase

are thresholds that (1) appear within

regulations issued only by the FDIC, (2)

are not set by statute, and (3) are

relatively straightforward to adjust

than actual changes in

the institution’s size, risk profile or level

of complexity.

The proposal is the first of a multi-

phase effort to reevaluate thresholds

within the FDIC’s regulations. The

thresholds selected for this initial phase

are thresholds that (1) appear within

regulations issued only by the FDIC, (2)

are not set by statute, and (3) are

relatively straightforward to adjust. For

example, the proposal would initially

update and provide for subsequent

periodic adjustments pursuant to an

indexing methodology for a number of

dollar-based thresholds in 12 CFR part

363 related to audit, internal control,

audit committee composition, and

reporting requirements. The FDIC

expects to solicit comment on one or

more subsequent proposals to update

and adjust additional thresholds, and, as

appropriate, will seek to coordinate

with other Federal agencies.

Additionally, the FDIC, together with

the Federal Financial Institutions

Examination Council, Office of the

Comptroller of the Currency, and Board

of Governors of the Federal Reserve

System, commenced a review under the

Economic Growth and Regulatory

Paperwork Reduction Act of 1996

(EGRPRA) in 2024 to solicit feedback

from the public on potentially outdated

or otherwise unnecessary regulatory

requirements.14 The FDIC expects to

review and consider any comments

received pursuant to this EGRPRA

review that relate to the thresholds

considered within this proposal as part

of any final rulemaking

under the

Economic Growth and Regulatory

Paperwork Reduction Act of 1996

(EGRPRA) in 2024 to solicit feedback

from the public on potentially outdated

or otherwise unnecessary regulatory

requirements.14 The FDIC expects to

review and consider any comments

received pursuant to this EGRPRA

review that relate to the thresholds

considered within this proposal as part

of any final rulemaking.

As discussed in the sections that

follow, the proposal would initially

update and thereafter periodically

adjust certain thresholds in the

following FDIC regulations:

• 12 CFR Part 303—Filing Procedures

• 12 CFR Part 335—Securities of

Nonmember Banks and State Savings

Associations

• 12 CFR Part 340—Restrictions on Sale

of Assets of a Failed Institution by the

Federal Deposit Insurance

Corporation

• 12 CFR Part 347—International

Banking

• 12 CFR Part 363—Annual

Independent Audits and Reporting

Requirements

• 12 CFR Part 380—Orderly Liquidation

Authority

II. Initial Updates

Except as otherwise provided,15 the

proposal would provide for an initial

increase in the thresholds described

below to reflect historical inflation and

index these thresholds to account for

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16 12 U.S.C. 1829.

17 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)(ii) is set by

statute (see 12 U.S.C. 1829(c)(3)(C)) and is therefore

not within the FDIC’s discretion to adjust and not

included in this proposal.

18 Additional criteria that must be met include (1)

the theft was not committed against an insured

depository institution (IDI) or insured credit union;

s

exceptions. The $2,000 or less threshold for bad

checks set forth in 12 CFR 303.227(b)(2)(ii) is set by

statute (see 12 U.S.C. 1829(c)(3)(C)) and is therefore

not within the FDIC’s discretion to adjust and not

included in this proposal.

18 Additional criteria that must be met include (1)

the theft was not committed against an insured

depository institution (IDI) or insured credit union;

(2) the individual has no more than one other

offense that is considered exempt under this

section; and (3) if there are two offenses—each of

which, by itself, is considered exempt under this

section—each conviction or program entry was

entered at least three years prior to the date an

application would otherwise be required, or at least

18 months prior to the date an application would

otherwise be required if the actions that resulted in

the conviction or program entry all occurred when

the individual was 21 years of age or younger.

Simple theft excludes burglary, forgery, robbery,

identity theft, and fraud. See 12 CFR 303.227(b)(3).

19 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 insured institution 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. See 83 FR 38143 (Aug. 3, 2018).

20 For example, changes to the de minimis

exception in the final rule published in 2020 would

have reduced past applications by approximately 20

percent. See Fact Sheet: FDIC Issues Rule on

Section 19 of the Federal Deposit Insurance Act

(July 2020).

21 12 CFR part 335.

22 17 CFR 229.404.

23 12 CFR 335.801(d).

24 See 44 FR 33077, 33079 (Jun. 8, 1979).

25 See 62 FR 6852, 6855 (Feb. 14, 1997)

For example, changes to the de minimis

exception in the final rule published in 2020 would

have reduced past applications by approximately 20

percent. See Fact Sheet: FDIC Issues Rule on

Section 19 of the Federal Deposit Insurance Act

(July 2020).

21 12 CFR part 335.

22 17 CFR 229.404.

23 12 CFR 335.801(d).

24 See 44 FR 33077, 33079 (Jun. 8, 1979).

25 See 62 FR 6852, 6855 (Feb. 14, 1997).

26 For example, growth in the dollar amount of

capital as a result of inflation would impact the

permitted amount extensions of credit under 12

CFR 337.3(b) if an FDIC-supervised institution

provides an extension of credit less than 5 percent

of its unimpaired capital and unimpaired surplus.

future inflation. Initial updates would

become effective, consistent with

applicable law, at the beginning of the

first calendar quarter following adoption

of the final rule.

A. 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.16

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.17 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

e of

section 19 and for which no section 19

application is required.17 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.18

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 insured

institution. 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.19 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 Deposit Insurance Fund.20

The non-seasonally adjusted CPI–W

has increased by approximately 38

percent since the $2,500 de minimis

threshold was set in 2012; the proposal

would increase this threshold to $3,500.

Similarly, the non-seasonally adjusted

CPI–W has increased by approximately

23 percent since the $1,000 de minimis

threshold was set in 2020; the proposal

would increase this threshold to $1,225

ce Fund.20

The non-seasonally adjusted CPI–W

has increased by approximately 38

percent since the $2,500 de minimis

threshold was set in 2012; the proposal

would increase this threshold to $3,500.

Similarly, the non-seasonally adjusted

CPI–W has increased by approximately

23 percent since the $1,000 de minimis

threshold was set in 2020; the proposal

would increase this threshold to $1,225.

These proposed updates would help

preserve, in real terms, the level of such

thresholds 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.

Question 1: What are the advantages

and disadvantages of increasing the de

minimis offense thresholds for purposes

of section 19? Would the proposal

appropriately support objectives of the

de minimis exceptions framework in a

manner consistent with safety and

soundness?

B. 12 CFR Part 335 (Part 335)—

Securities of State Nonmember Banks

and Savings Associations

Part 335 of the FDIC’s regulations

provides securities recordkeeping and

requirements for State nonmember

banks and State savings associations,

and generally applies only to such

institutions 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.21 Part 335 is substantially

similar to Securities and Exchange

Commission (SEC) regulations that

implement the securities registration,

disclosure, proxies and proxy

solicitation, information statements,

tender offer, election of directors, and

beneficial ownership and reporting

requirements of the Exchange Act.

The SEC and FDIC regulations both

contain disclosure requirements for

loans to insiders

s substantially

similar to Securities and Exchange

Commission (SEC) regulations that

implement the securities registration,

disclosure, proxies and proxy

solicitation, information statements,

tender offer, election of directors, and

beneficial ownership and reporting

requirements of the Exchange Act.

The SEC and FDIC regulations both

contain disclosure requirements for

loans to insiders. The SEC regulations

require disclosure of certain insider

indebtedness in excess of $120,000,

which have preferential terms, were not

made in the ordinary course of business,

or which involve more than the normal

risk of collectability or involve other

unfavorable features.22 By contrast, part

335 requires disclosure of extensions of

credit to insiders in excess of 10 percent

of the capital account of an institution

or $5 million, whichever is less.23 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.24 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.25

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. The

proposal would update the dollar

threshold in 12 CFR 335.801(d) to $10

million to reflect inflation since that

time

lion

threshold, was in the public interest and

appropriate for protection of investors.25

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. The

proposal would update the dollar

threshold in 12 CFR 335.801(d) to $10

million to reflect inflation since that

time. The proposed revision would help

to preserve, in real terms, the level of

this threshold.26

Question 2: What are the advantages

and disadvantages of raising the

threshold for the management

indebtedness disclosure provisions

under part 335 to $10 million?

Question 3: Are there any unintended

consequences that the FDIC should

consider in increasing the threshold for

disclosure of extensions of credit to

insiders?

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27 See 12 CFR 340.1(b).

28 12 CFR 340.4(a)(1).

29 See 12 CFR 340.4(c).

30 See 12 CFR 340.2(h).

31 See 65 FR 14816, 14819 (Mar. 20, 2000).

32 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).

33 See generally, id.

34 The Purchaser Eligibility Certification form,

available at https://www.fdic.gov/asset-sales/

purchaser-eligibility-certification-pec.pdf

he 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).

33 See generally, id.

34 The Purchaser Eligibility Certification form,

available at https://www.fdic.gov/asset-sales/

purchaser-eligibility-certification-pec.pdf.

35 63 FR 17056 (Apr. 8, 1998).

36 66 FR 54346, 54354 (Oct. 26, 2001); see 12 CFR

211.10(a)(14).

37 66 FR 54346, 54354 (Oct. 26, 2001); see 12 CFR

211.10(a)(15).

38 Id.

39 70 FR 17550 (Apr. 5, 2005).

C. 12 CFR Part 340 (Part 340)—

Restrictions on Sale of Assets of a Failed

Institution by the FDIC

Part 340 of the FDIC’s regulations

addresses 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.27 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 28 or has demonstrated a

pattern or practice causing a substantial

loss to one or more failed

institution(s).29 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.’’ 30

The FDIC added part 340 to the

FDIC’s regulations in 2000.31

Subsequent updates 32 to part 340 have

not substantively modified the

‘‘substantial loss’’ definition or the

$50,000 threshold.33 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.34

The FDIC is proposing to revise the

‘‘substantial loss’’ threshold in part 340

by raising the existing threshold from

$50,000 to $100,000

ion or the

$50,000 threshold.33 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.34

The FDIC is proposing to revise the

‘‘substantial loss’’ threshold in part 340

by raising the existing threshold from

$50,000 to $100,000. If indexed to

inflation since the FDIC established the

‘‘substantial loss’’ threshold in 2000, the

$50,000 threshold would be $92,666.

This proposed updated threshold of

$100,000 approximates inflation

adjustments.

Updating the threshold for

‘‘substantial loss’’ would preserve, in

real terms, the level of the threshold,

while allowing more prospective

purchasers to make offers to buy failed

IDI assets. The FDIC does not expect

this proposed adjustment to adversely

affect competition or the prices paid for

failed IDI assets.

More generally, the FDIC has

experienced challenges with

implementation of part 340 and is

considering future amendments to the

regulation, but, in the interim, is

proposing to revise the threshold for

‘‘substantial loss’’ as part of this

rulemaking.

Question 4: What are the advantages

and disadvantages of increasing the

$50,000 substantial loss threshold that

is used to determine whether

individuals or entities are eligible to

purchase assets of a failed institution?

Does the proposal appropriately balance

the potential benefit of increasing

competition for failed institution assets

with any public interest concerns that

may be associated with increasing this

threshold?

D. 12 CFR Part 347 (Part 347)—

International Banking

Part 347 of the FDIC’s regulations

governs international banking

ntities are eligible to

purchase assets of a failed institution?

Does the proposal appropriately balance

the potential benefit of increasing

competition for failed institution assets

with any public interest concerns that

may be associated with increasing this

threshold?

D. 12 CFR Part 347 (Part 347)—

International Banking

Part 347 of the FDIC’s regulations

governs international banking. Subpart

A to part 347, which implements

section 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

recordkeeping, supervision, and

approval requirements. Subpart A also

addresses permissible activities for

foreign branches of insured State

nonmember banks.

The FDIC issued a final rule in 1998

amending its international banking

regulations and consolidating them into

part 347.35 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

the 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

thresholds. First,

12 CFR 347.111(a) provides that the

aggregate underwriting commitments by

the 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. At the time, the FDIC stated

that it intended to maintain parity

between the restrictions governing the

international activities of State

nonmember banks regulated by the

FDIC and member banks subject to the

Federal Reserve Board’s (FRB)

Regulation K. In 2001, the FRB issued

a final rule to adjust certain limitations

on activities of bank holding companies,

State member banks, Edge corporations,

and agreement corporations (FRB-

supervised institutions)

etween the restrictions governing the

international activities of State

nonmember banks regulated by the

FDIC and member banks subject to the

Federal Reserve Board’s (FRB)

Regulation K. In 2001, the FRB issued

a final rule to adjust certain limitations

on activities of bank holding companies,

State member banks, Edge corporations,

and agreement corporations (FRB-

supervised institutions). For example,

the final rule expanded underwriting

limits for well-capitalized, well-

managed FRB-supervised institutions by

tying the limit for underwriting shares

to a single organization to a percentage

of the institution’s Tier 1 capital, and

eliminating the limitation based on a

dollar amount.36 FRB-supervised

institutions that are not well-capitalized

and well-managed remained subject to

the $60 million underwriting

commitment threshold for shares of

individual organizations.37 The final

rule also revised the dealing limit on

shares in which an FRB-supervised

institution can hold in its trading or

dealing accounts for a single issuer from

the lesser of $40 million or 10 percent

of Tier 1 capital, increased from $30

million. The FRB justified this increase

by noting that 10 years had passed since

the $30 million limit was first

established.38

Following the FRB’s revisions to

Regulation K, the FDIC issued a rule on

April 6, 2005,39 transferring these limits

to its current location at 12 CFR

347.111; the dollar-based thresholds

remained unchanged. Since these limits

were established in 1998, the CPI–W has

increased by approximately 95 percent.

If indexed to inflation, the limits on

aggregate underwriting commitments

and on the equity securities of any

entity held for distribution or dealing

would be $118 million and $59 million,

respectively.

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sed by approximately 95 percent.

If indexed to inflation, the limits on

aggregate underwriting commitments

and on the equity securities of any

entity held for distribution or dealing

would be $118 million and $59 million,

respectively.

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40 12 U.S.C. 1831m.

41 Consistent with the statute, the FDIC is

consulting with the other Federal banking agencies

in adjusting these thresholds.

42 See 12 CFR 363.2.

43 See 12 CFR 363.2(b)(3) and 363.3(b).

44 70 FR 71226, 71227 (Nov. 28, 2005).

45 58 FR 31332, 31333 (June 2, 1993).

46 Id.

47 Supra n. 44.

48 Id.

49 Id.

50 74 FR 35726 (July 20, 2009). The most

significant amendments to part 363 in 2009

included: (1) extending the time period for a non-

public institution to file its Part 363 Annual Report

by 30 days and replace the 30-day extension of the

filing deadline that may be granted if an institution

(public or non-public) is confronted with

extraordinary circumstances beyond its reasonable

control with a late filing notification requirement

that would have general applicability; (2) providing

relief from the annual reporting requirements for

institutions that are merged out of existence before

the filing deadline; (3) providing relief from

reporting on internal control over financial

reporting for businesses acquired during the fiscal

year; (4) requiring management’s assessment of

compliance with the laws and regulations

pertaining to insider loans and dividend restrictions

to State management’s conclusion regarding

compliance and disclose any noncompliance with

such laws and regulations; (5) requiring an

institution’s management and the independent

public accountant to identify the internal control

framework used to evaluate internal control over

financial reporting and disclose all identifi

d regulations

pertaining to insider loans and dividend restrictions

to State management’s conclusion regarding

compliance and disclose any noncompliance with

such laws and regulations; (5) requiring an

institution’s management and the independent

public accountant to identify the internal control

framework used to evaluate internal control over

financial reporting and disclose all identified

material weaknesses that have not been remediated

prior to the institution’s most recent fiscal year-end;

(6) clarifying the independence standards with

which independent public accountants must

comply and enhance the enforceability of

compliance with these standards; (7) specifying that

the duties of the audit committee include the

appointment, compensation, and oversight of the

independent public accountant, including ensuring

that audit engagement letters do not contain unsafe

and unsound limitation of liability provisions; (8)

requiring certain communications by independent

public accountants to audit committees; (9)

establishing retention requirements for audit

working papers; (10) requiring boards of directors

to adopt written criteria for evaluating an audit

committee member’s independence and provide

expanded guidance for boards of directors to use in

determining independence; (11) providing that

ownership of 10 percent or more of any class of

voting securities of an institution is not an

automatic bar for considering an outside director to

be independent of management; (12) requiring the

total assets of a holding company’s insured

depository institution subsidiaries to comprise 75

percent or more of the holding company’s

consolidated total assets in order for an institution

to be eligible to comply with part 363 at the holding

company level; and (13) providing illustrative

management reports to assist institutions in

complying with the annual reporting requirements.

51 85 FR 67427 (Oct. 23, 2020)

g company’s insured

depository institution subsidiaries to comprise 75

percent or more of the holding company’s

consolidated total assets in order for an institution

to be eligible to comply with part 363 at the holding

company level; and (13) providing illustrative

management reports to assist institutions in

complying with the annual reporting requirements.

51 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.

To preserve the level of these

thresholds in real terms, the FDIC is

proposing to revise the dollar limits in

subpart A of part 347 on aggregate

underwriting commitments and on

equity securities held for distribution or

dealing to $120 million and $60 million,

respectively. The proposed increases in

these limits approximate inflation

adjustments since 1998. The limits on

aggregate underwriting commitments

and the dollar limit on equity securities

held for distribution and dealing, as

percentages of Tier 1 capital, would

remain unchanged. The proposal would

not align these thresholds with those

used in parallel regulations of the FRB.

Question 5: What are the advantages

and disadvantages of updating the

dollar limits in subpart A of 12 CFR part

347 on aggregate underwriting

commitments and on equity securities

held for distribution or dealing to $120

million and $60 million, respectively?

Question 6: Should the FDIC consider

eliminating the limit based on a dollar

amount for underwriting shares to a

single organization for institutions that

are well-capitalized and well-managed

and only include a limit for a percentage

of an institution’s Tier 1 capital,

consistent with FRB Regulation K? What

would be the advantages and

disadvantages of such an approach?

Question 7: What are the potential

unintended consequences, if any, of

establishing a higher limit on equity

securities held for

single organization for institutions that

are well-capitalized and well-managed

and only include a limit for a percentage

of an institution’s Tier 1 capital,

consistent with FRB Regulation K? What

would be the advantages and

disadvantages of such an approach?

Question 7: What are the potential

unintended consequences, if any, of

establishing a higher limit on equity

securities held for dealing or

distribution under part 347 relative to

the limit that applies under Regulation

K?

E. 12 CFR Part 363 (Part 363)—Annual

Independent Audits and Reporting

Requirements

Section 112 of the Federal Deposit

Insurance Corporation Improvement Act

of 1991 (FDICIA) added section 36,

‘‘Early Identification of Needed

Improvements in Financial

Management,’’ to the FDI Act.40 Section

36 generally subjects IDIs above a

certain asset size threshold to annual

independent audits, assessments 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.41

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 financial statements, the

independent public accountant’s report

thereon, and a management report

containing a statement of management’s

responsibilities and an assessment by

management of compliance with

applicable laws and regulations.42 The

management report component of the

part 363 Annual Report for an

institution with $1 billion or more in

total assets mus

rt) comprised of

audited financial statements, the

independent public accountant’s report

thereon, and a management report

containing a statement of management’s

responsibilities and an assessment by

management of compliance with

applicable laws and regulations.42 The

management report component of the

part 363 Annual Report for an

institution with $1 billion or more in

total assets must also include an

assessment by management of the

effectiveness of ICFR and an

independent public accountant’s

attestation report on ICFR.43 The FDIC

has not adjusted the $500 million

mandatory compliance threshold for

part 363 since its initial

implementation; however, the $1 billion

threshold was increased from $500

million in 2005.44

When the FDIC initially implemented

part 363, use of a $500 million threshold

captured approximately 1,000 IDIs (out

of 14,000) holding 75 percent of U.S.

banking assets, while exempting

approximately two-thirds of institutions

that would have been subject to section

36 under a $150 million threshold.45 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 depository institution

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 Deposit

Insurance Fund.46

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.47 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) insured institutions,

representing approximately 90 percent

of industry assets.48 Following the 2005

amendm

ad

become more burdensome and costly,

particularly for smaller nonpublic

institutions.47 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) insured institutions,

representing approximately 90 percent

of industry assets.48 Following the 2005

amendment, about 600 of the largest

insured institutions 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.49 Subsequent amendments

to part 363 in 2009 50 and 2020 51 did

not result in permanent changes to the

regulatory asset thresholds.

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52 In total, the FDIC is proposing increases to 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 insured

depository institutions that are subsidiaries of

holding companies), and audit committee

composition requirements.

53 Supra n. 45 at 58 FR 31333.

54 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.

55 Sarbanes-Oxley Act of 2002, Public Law 107–

204, 116 Stat. 745 (2002), and its implementing

regulations, 15 U.S.C. 7262.

56 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 on line M.1 in the Memorandum to Schedule

RC

24); Conn. Gen. Stat 36a–86; and Ga. Comp.

R. & Regs. R. 80–1–14–.01.

55 Sarbanes-Oxley Act of 2002, Public Law 107–

204, 116 Stat. 745 (2002), and its implementing

regulations, 15 U.S.C. 7262.

56 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 on line M.1 in the Memorandum to Schedule

RC.

57 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).

58 Nasdaq Stock Market Rules, Rule 5605(a)(2);

New York Stock Exchange Listed Company Manual,

section 303A.02(b)(ii).

Most of the dollar-based thresholds in

part 363 have been in place for more

than 30 years. The proposal would raise

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.52 Use of these thresholds would

help support a key underlying objective

of part 363—that is, achieving sound

financial management at insured

institutions posing the greatest risk to

the Deposit Insurance Fund 53—and

maintain consistency with the historical

scope of applicability according to

several metrics. The $1 billion and $5

billion thresholds would cover

institutions holding approximately 95

and 89 percent of industry assets,

respectively

ng objective

of part 363—that is, achieving sound

financial management at insured

institutions posing the greatest risk to

the Deposit Insurance Fund 53—and

maintain consistency with the historical

scope of applicability according to

several metrics. The $1 billion and $5

billion thresholds would 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 75 percent of

institutions) at the time of initial

implementation and under the 2005

amendment.

The thresholds set forth in the

proposal also would achieve meaningful

burden reduction for the smallest

institutions, which would be removed

from the 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

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 proposed 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.54

Additionally, insured depository

institutions 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.55 As of March 31, 2025,

approximately 52 percent of institutions

not subject to part 363 still obtained an

audit.56

The FDIC is also proposing to increase

the $100,000 compensation threshold

under part 363 57 related to the

determination of whether a director is

considered ‘‘independent of

management.’’ 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.

The FDIC implemented the $100,000

threshold under part 363 in 2009

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.

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

$120,000.58 Accordingly, the proposal

would increase 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.

In contrast to the other thresholds in

part 363 that are subject to this

proposal, the $120,000 compensation

threshold would not be subject to the

proposed indexing methodology

described in section III 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 expects to

adjust this threshold in the future to

maintain continued alignment with

parallel thresholds in the listing

standards of the national securities

exchanges.

The table below details the proposed

changes to part 363 thresholds.

PART 363 THRESHOLDS PROPOSED TO BE REVISED

Citation

Current threshold

Proposal threshold

363.1(a) ................................................................................................................

$500 million ..........................................

$1 billion.

363.2(b)(3) ...........................................................................................................

T 363 THRESHOLDS PROPOSED TO BE REVISED

Citation

Current threshold

Proposal 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.

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$5 billion.

363.5(a)(2) ............................................................................................................

$500 million ..........................................

$1 billion.

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Federal Register / Vol. 90, No. 142 / Monday, July 28, 2025 / Proposed Rules

59 As discussed above, the proposal also would

raise 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.

60 See 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.

61 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.

62 See 12 CFR 380.13(a)(1).

63 See 12 CFR 380.13(a)(2)(i).

64 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).

65 See 12 CFR 380.13(c)(3).

66 See 12 CFR 380.13(b)(6).

67 See 79 FR 20762, 20766–20767 (Apr. 14, 2014).

68 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.).

69 See ‘‘Restrictions on Sale of Assets of a

Financial Institution by the Federal Deposit

Insurance Corporations,’’ 80 FR 22886 (Apr. 24,

2015) at 80 FR 22286, 80 FR 22887 and 12 CFR

380.13

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.).

69 See ‘‘Restrictions on Sale of Assets of a

Financial Institution by the Federal Deposit

Insurance Corporations,’’ 80 FR 22886 (Apr. 24,

2015) at 80 FR 22286, 80 FR 22887 and 12 CFR

380.13.

PART 363 THRESHOLDS PROPOSED TO BE REVISED—Continued

Citation

Current threshold

Proposal threshold

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

..........

$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.59

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.

Guideline 35(c) .....................................................................................................

$3 billion ...............................................

$5 billion.

Appendix B item 2(b) ...........................................................................................

$1 billion ...............................................

$5 billion.

Question 8: What are the advantages

and disadvantages of increasing the

thresholds within part 363, as described

above?

Question 9: Does the proposal

appropriately balance the objectives

preserving the levels of part 363

thresholds on an inflation-adjusted basis

and reducing burden for smaller

institutions with the safety and

soundness benefits of audit and

financial controls requirements? If not,

how could the proposal improve the

balance of these objectives?

Question 10: Would the proposed

thresholds under part 363 help to

address challenges for smaller

institutions in rural areas or other

geographies? Please describe any

elevated challenges associated with

current provisions of part 363 and

whether the proposal would help to

address them. Please provide supporting

data where available.

Question 11: To what extent do the

requirements of part 363 help ensure

that institutions establish and maintain

appropriate lines of defense for

compliance and safety and soundness

purposes? How burdensome are the

requirements for small institutions?

F

th

current provisions of part 363 and

whether the proposal would help to

address them. Please provide supporting

data where available.

Question 11: To what extent do the

requirements of part 363 help ensure

that institutions establish and maintain

appropriate lines of defense for

compliance and safety and soundness

purposes? How burdensome are the

requirements for small institutions?

F. 12 CFR Part 380 (Part 380)—Orderly

Liquidation Authority

Part 380 of the FDIC’s regulations

implements the FDIC’s orderly

liquidation authority,60 which applies

once the FDIC has been appointed

receiver for a covered financial

company.61 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.62 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.63

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 64 or has demonstrated a

pattern or practice causing a substantial

loss to one or more covered financial

companies.65 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.’’ 66

The FDIC added 12 CFR 380.13 to the

FDIC’s regulations in 2014.67 From

inception, the FDIC has explicitly

implemented the requirements in 12

CFR 380.13, including the ‘‘substantial

loss’’ provisions and threshold, in a

manner consis

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.’’ 66

The FDIC added 12 CFR 380.13 to the

FDIC’s regulations in 2014.67 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 IDIs asset sales under

part 340.68 Previous revisions to part

340 were also specifically intended to

align the requirements in part 340 and

12 CFR 380.13.69

The FDIC is proposing to revise the

‘‘substantial loss’’ threshold in 12 CFR

380.13 by raising the existing threshold

from $50,000 to $100,000. This

proposed revised threshold

approximates inflation adjustments

since the FDIC created the ‘‘substantial

loss’’ threshold under part 340 in 2000,

which was included in 12 CFR 380.13

in 2014, and will maintain consistency

between the ‘‘substantial loss’’

provisions in part 340 and 12 CFR

380.13.

In addition to maintaining

consistency between these related

requirements, as with part 340, updating

the threshold for ‘‘substantial loss’’ will

preserve, in real terms, the level of the

threshold. The FDIC also does not

expect this proposed adjustment to

adversely affect competition for sales of

covered financial company assets or the

prices paid for those assets.

Question 12: What are the advantages

and disadvantages of the FDIC updating

the $50,000 ‘‘substantial loss’’ threshold

under 12 CFR 380.13 to $100,000?

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for sales of

covered financial company assets or the

prices paid for those assets.

Question 12: What are the advantages

and disadvantages of the FDIC updating

the $50,000 ‘‘substantial loss’’ threshold

under 12 CFR 380.13 to $100,000?

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70 This process to adjust numerical thresholds in

the Code of Federal Regulations would be 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 The period in which new thresholds would

apply may differ depending on considerations

specific to each individual regulation. For example,

thresholds within part 363 of FDIC regulations

apply on a fiscal year basis rather than a calendar

year basis and would be made applicable for fiscal

years beginning after the threshold update.

72 For simple illustration, this example ignores

compounding of prior years’ inflation.

G. Additional Thresholds

As discussed above, the proposal is

intended to be the first of a multi-phase

effort to reevaluate thresholds within

the FDIC’s regulations. The FDIC also

seeks comment on which additional

regulatory thresholds, if any, the FDIC

should update and index. Please

identify any such thresholds and

explain which, if any, should be

prioritized and why.

III. Indexing Methodology for Future

Threshold Adjustments

The FDIC is proposing to implement

an indexing methodology to make future

automatic adjustments to most

thresholds discussed above according to

a pre-determined methodology that

reflects inflation. Use of the indexing

methodology would result in a more

consistent and predictable application

of thresholds over time, in further

support of the objectives of this

proposal.

A

ld Adjustments

The FDIC is proposing to implement

an indexing methodology to make future

automatic adjustments to most

thresholds discussed above according to

a pre-determined methodology that

reflects inflation. Use of the indexing

methodology would result in a more

consistent and predictable application

of thresholds over time, in further

support of the objectives of this

proposal.

A. Description of Methodology

Under the proposal, the FDIC would

generally adjust the dollar thresholds

described in section II of this document

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 any

final rulemaking. This two-year period

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.

If, however, the cumulative

percentage change in the non-seasonally

adjusted CPI–W during any intervening

calendar year since the most recent

adjustment exceeds 8 percent, then the

thresholds subject to the indexing

methodology would be adjusted during

the first quarter of the following

calendar year. This feature of the

indexing methodology is intended to

address the possibility that periods of

significant inflation could cause

thresholds to decrease substantially in

real terms before adjustments would

occur under the two-year cadence. By

providing for the thresholds to be

revised on an interim basis during any

year since the prior adjustment in which

the cumulative percent change increases

by more than 8 percent, the proposal

would help ensure threshold amounts

reflect inflation in a timely manner and

avoid the undesirable and unintended

consequences of excessive inflation

between adjustments.

Under the proposal, the FDIC

generally would announce threshold

adjustments pursuant to the indexing

methodology by publishing a final rule

in the Federal Register

change increases

by more than 8 percent, the proposal

would help ensure threshold amounts

reflect inflation in a timely manner and

avoid the undesirable and unintended

consequences of excessive inflation

between adjustments.

Under the proposal, the FDIC

generally would announce threshold

adjustments pursuant to the indexing

methodology by publishing a final rule

in the Federal Register. The final rule

would not be subject to a notice and

comment period, and would amend the

Code of Federal Regulations to reflect

the adjusted numerical threshold.70

While the FDIC would fully expect to

publish a final rule in the Federal

Register as required by the proposal, the

proposal also notes that the adjustment

would occur even in the absence of a

publication in the Federal Register. The

adjusted thresholds would be effective

on April 1 of the year during which the

adjustment occurs.71 For example, 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.

Under the proposed indexing

methodology, the FDIC would not lower

thresholds in any given year to reflect

periods of deflation. In modern times,

deflation has been rare and limited.

However, as further described below, a

period of deflation would 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 the

economy experiences a period of

sustained deflation, the FDIC may

consider revisiting the proposed

indexing methodology.

Additionally, thresholds adjusted

under the indexing methodology would

be rounded, as appropriate, based on the

size of the threshold (e.g., thousands,

millions, billions), generally, to the

nearest number with two significant

digits. For example, the numbers $9.8

billion; $510 million; $1.1 million;

$520,000; and $2,700 each have two

significant digits

he proposed

indexing methodology.

Additionally, thresholds adjusted

under the indexing methodology would

be rounded, as appropriate, based on the

size of the threshold (e.g., thousands,

millions, billions), generally, to the

nearest number with two significant

digits. For example, the numbers $9.8

billion; $510 million; $1.1 million;

$520,000; and $2,700 each have two

significant digits. As an additional

example, a threshold that would

otherwise be calculated as $5.964

million would be rounded to $6.0

million. In this case, both the ‘6’ and ‘0’

are significant digits because $6.0

million is the value of the adjusted

threshold rounded to the nearest $0.1

million.

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 any final

rulemaking to implement the proposal.

Referring back to a discrete starting

point would ensure that any distortions

due to rounding or non-adjustments for

deflation do not carry forward to future

adjustments. For example, if a final rule

to implement this proposal becomes

effective on December 31, 2025, then

this date would serve as the starting

point for future threshold adjustment

calculations. In addition, to illustrate

the effects of deflation, suppose that

inflation is 0 percent in calendar year

2026 and ¥5 percent (5 percent

deflation) in calendar year 2027. No

adjustment would be made at the end of

calendar year 2026 because inflation did

not exceed 8 percent, and no adjustment

would be made at the end of calendar

year 2027 because, as stated above, the

FDIC would not adjust thresholds lower

in any given year. Suppose also that

inflation is 0 percent in calendar year

2028 and 5 percent in calendar year

2029

deflation) in calendar year 2027. No

adjustment would be made at the end of

calendar year 2026 because inflation did

not exceed 8 percent, and no adjustment

would be made at the end of calendar

year 2027 because, as stated above, the

FDIC would not adjust thresholds lower

in any given year. Suppose also that

inflation is 0 percent in calendar year

2028 and 5 percent in calendar year

2029. The adjusted threshold

calculation for 2029 would consider

cumulative inflation since December 31,

2025, meaning the ¥5 percent inflation

in 2027 would roughly offset the 5

percent inflation in 2029, and no

adjustment would be made.

As an example of how the proposal

would avoid rounding distortions,

consider a $1 million threshold and

consistent 3 percent inflation in each

year from 2026 through 2029.

Cumulative inflation at the end of 2027

would be roughly 6 percent, resulting in

an unrounded adjusted threshold of

$1.06 million ($1 million * 1.06 = $1.06

million), which would then be rounded

to $1.1 million. Cumulative inflation in

the years 2028 and 2029 would also be

roughly 6 percent. If the indexing

methodology were to be based on the

previous adjustment, the new

unrounded adjusted threshold would be

$1.166 ($1.1 million * 1.06 = $1.166

million) and would round to $1.2

million. Thus, the $0.04 million in

rounding at the end of 2027 would carry

forward and add to the $0.034 million

in rounding applied at the end of 2029.

Conversely, under the proposed

methodology, the 2029 adjustment

would be calculated based on the

roughly 12 percent cumulative inflation

in the years 2026–2029.72 The $1

million threshold from December 31,

2025, would be adjusted to an

unrounded threshold of $1.12 million

($1 million * 1.12 = $1.12 million)

ry

forward and add to the $0.034 million

in rounding applied at the end of 2029.

Conversely, under the proposed

methodology, the 2029 adjustment

would be calculated based on the

roughly 12 percent cumulative inflation

in the years 2026–2029.72 The $1

million threshold from December 31,

2025, would be adjusted to an

unrounded threshold of $1.12 million

($1 million * 1.12 = $1.12 million). The

unrounded adjusted threshold would be

rounded to $1.1 million, which would

be equivalent to the current adjusted

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73 See U.S. Bureau of Labor Statistics, CPI-Urban

Wage Earners and Clerical Workers (Current

Series)), available at https://datawww.bls.gov/

PDQWebhelp/one_screen/cw.htm.

74 See Social Security Administration, Latest Cost

of Living Adjustments, available at https://

www.ssa.gov/OACT/COLA/latestCOLA.html.

75 See U.S. Bureau of Labor Statistics, Producer

Price Index, available at https://www.bls.gov/ppi/.

76 See Bureau of Economic Analysis, Personal

Expenditures Price Index, available at https://

www.bea.gov/data/personal-consumption-

expenditures-price-index.

77 See Bureau of Economic Analysis, Gross

Domestic Purchases Price Index, available at

https://www.bea.gov/data/prices-inflation/gross-

domestic-purchases-price-index.

78 C–CPI–U has been published since 2000 and is

not included in the three-decade comparison.

79 See § 345.12(u)(2) of appendix G to 12 CFR part

345; see also 12 CFR 1003.2(g)(1)(i).

threshold (established at year-end 2027),

so no adjustment would be made

sis, Gross

Domestic Purchases Price Index, available at

https://www.bea.gov/data/prices-inflation/gross-

domestic-purchases-price-index.

78 C–CPI–U has been published since 2000 and is

not included in the three-decade comparison.

79 See § 345.12(u)(2) of appendix G to 12 CFR part

345; see also 12 CFR 1003.2(g)(1)(i).

threshold (established at year-end 2027),

so no adjustment would be made.

Question 13: Would increasing

thresholds pursuant to the proposed

indexing methodology have any

unintended policy consequences? Are

there other factors that should be

considered as part of any update to

thresholds?

Question 14: Under the proposal, the

FDIC would generally not expect to

adjust thresholds lower in any given

year, for example, following periods of

deflation. Is it appropriate to only adjust

thresholds higher to reflect inflation?

What would be the advantages and

disadvantages of adjusting thresholds to

reflect both inflationary and

deflationary periods?

Question 15: Does the proposal

appropriately address potential

distortions that could result from

rounding? If not, please explain. What

would be the advantages and

disadvantages of not applying rounding?

Question 16: Under the proposal,

adjusted thresholds would be rounded

to the nearest value with two significant

digits. What would be the advantages

and disadvantages of adjusting

thresholds under the indexing

methodology to reflect the exact

numerical threshold amount produced

as a result of changes in inflation

(instead of rounding)?

Question 17: Should the FDIC apply

the proposed methodology consistently

across all regulations or should the FDIC

tailor alternative methodologies to

consider factors specific to each

individual threshold and/or regulation,

or groups of thresholds and/or

regulations? Would the benefits of a

more tailored approach justify the cost

of inconsistent indexing methods?

B

nstead of rounding)?

Question 17: Should the FDIC apply

the proposed methodology consistently

across all regulations or should the FDIC

tailor alternative methodologies to

consider factors specific to each

individual threshold and/or regulation,

or groups of thresholds and/or

regulations? Would the benefits of a

more tailored approach justify the cost

of inconsistent indexing methods?

B. Alternatives to the Proposed Indexing

Methodology

In developing this proposal, the FDIC

considered other factors that could be

used to adjust regulatory thresholds to

preserve the levels of thresholds in real

terms over time. For example, the

approach to adjust thresholds could rely

on an alternative index or measure of

inflation (e.g., core versus non-core

measures). Additionally, rather than

using changes in inflation as a basis for

updating thresholds, the FDIC

considered using changes in economic

growth or banking industry assets since

thresholds were originally

implemented. Another alternative

considered was a methodology for

updating each threshold individually,

based on the factors most relevant to

that threshold. The FDIC also

considered not updating the thresholds

included in section II of this document

from their current levels and instead

relying solely on the proposed

methodology to index thresholds.

Additionally, the mechanics of the

indexing methodology could involve a

less or more frequent cadence, or use of

a process that is less automated. The

FDIC requests feedback on all

alternative approaches discussed below

and any other alternative approaches

that should be considered.

1. Alternative Measures of Inflation

The non-seasonally adjusted CPI–W is

a measure of prices paid by urban wage

earners and clerical workers published

by the U.S. Bureau of Labor Statistics.73

Among other uses, the CPI–W is used by

the U.S

automated. The

FDIC requests feedback on all

alternative approaches discussed below

and any other alternative approaches

that should be considered.

1. Alternative Measures of Inflation

The non-seasonally adjusted CPI–W is

a measure of prices paid by urban wage

earners and clerical workers published

by the U.S. Bureau of Labor Statistics.73

Among other uses, the CPI–W is used by

the U.S. Social Security Administration

to make ‘‘cost-of-living adjustments’’ to

benefit payments.74 There are other

consumer price indices that could be

considered for updating and indexing

thresholds within FDIC regulations. The

CPI–W is calculated based on the

consumption patterns of urban wage

earners and clerical workers whereas

the Consumer Price Index for All Urban

Consumers (CPI–U) is calculated based

on the consumption patterns of a

broader set of urban consumers. The

Chained CPI–U (C–CPI–U) reflects the

consumption patterns of the broader set

of urban consumers and is designed to

account for consumer substitution

between item categories. The Producer

Price Index (PPI), also published by the

U.S. Bureau of Labor Statistics, tracks

the selling prices received by domestic

producers.75 The Personal Consumption

Expenditures Price Index (PCEPI) is

published by the U.S. Bureau of

Economic Analysis and tracks the prices

of goods and services purchased by

consumers in the United States.76 The

U.S. Bureau of Economic Analysis also

publishes a broader domestic price

index, the Gross Domestic Purchases

Price Index (GDPPI), which tracks prices

of goods and services purchased by U.S.

residents.77

In aggregate, there is not a significant

difference in changes over time between

these various consumer price indices

goods and services purchased by

consumers in the United States.76 The

U.S. Bureau of Economic Analysis also

publishes a broader domestic price

index, the Gross Domestic Purchases

Price Index (GDPPI), which tracks prices

of goods and services purchased by U.S.

residents.77

In aggregate, there is not a significant

difference in changes over time between

these various consumer price indices.

Each of the consumer price indices

discussed above has increased between

55 percent and 67 percent over the last

two decades and has increased between

87 percent and 111 percent over the last

three decades.78

One 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.79 One advantage

of using other price indices, such as the

CPI–U, C–CPI–U, PPI, PCEPI, and

GDPPI, may be that they are based on

consumption patterns of a broader set of

consumers, and, in some cases, may

adjust for substitutions in consumption

patterns. Use of price indices that are

based on consumption patterns of a

broader set of consumers could be more

responsive to both household and

business credit expansion relative to the

CPI–W, which may be more reflective of

the types of activities typically financed

through the banking industry and

therefore a potentially more relevant

measure for revising thresholds.

However, these alternatives are less

frequently used by the FDIC and other

Federal agencies and may be less

familiar to the public

esponsive to both household and

business credit expansion relative to the

CPI–W, which may be more reflective of

the types of activities typically financed

through the banking industry and

therefore a potentially more relevant

measure for revising thresholds.

However, these alternatives are less

frequently used by the FDIC and other

Federal agencies and may be less

familiar to the public.

Question 18: What would be the

advantages and disadvantages of using

the CPI–W as the reference index under

the proposed indexing methodology?

What would be the advantages and

disadvantages of using other potential

indices for updating and indexing

thresholds within FDIC regulations? Are

there other consumer price indices that

should be considered for updating and

indexing thresholds within FDIC

regulations? If so, please explain the

advantages and disadvantages of those

indices relative to the CPI–W and the

alternatives described above.

In addition to the consumer price

indices discussed above, the U.S.

Bureau of Labor Statistics and U.S.

Bureau of Economic Analysis also

publish ‘‘core’’ versions of their

respective consumer price indices,

which exclude prices for food and

energy, as prices in those categories

tend to be more volatile. Core price

indices are often used by monetary

policy authorities, such as the Board of

Governors of the Federal Reserve

System in seeking to understand

underlying, longer-term inflation

dynamics. However, core price indices,

by their nature as price indices focusing

on a subset of consumer prices, do not

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as the Board of

Governors of the Federal Reserve

System in seeking to understand

underlying, longer-term inflation

dynamics. However, core price indices,

by their nature as price indices focusing

on a subset of consumer prices, do not

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80 See U.S. Bureau of Labor Statistics, Consumer

Price Index Seasonally Adjusted Data, available at

https://www.bls.gov/cpi/seasonal-adjustment/using-

seasonally-adjusted-data.htm.

81 U.S. Bureau of Labor Statistics, Table 1.1.5.

Gross Domestic Product, line 1, available at https://

apps.bea.gov/iTable/?reqid=19&step=

2&isuri=1&categories=survey.

82 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).

83 See Financial Accounts of the United States

(Z.1) published by the Board of Governors of the

Federal Reserve System at https://

www.federalreserve.gov/releases/z1/.

84 See FDIC Quarterly Banking Profile ending

December 31, 1994 (indicating total assets of $5.02

trillion and total deposits of $3.6 trillion) relative

to FDIC Quarterly Banking Profile ending December

31, 2024 (indicating total assets of $24.1 trillion and

total deposits of $19.2 trillion), available at https://

www.fdic.gov/quarterly-banking-profile/past-

quarterly-banking-profiles.

provide as complete of a picture of

inflation as compared to broader indices

and may miss changing trends such as

food and energy prices. One advantage

of using the CPI–W for updating and

indexing thresholds within FDIC

regulations, as opposed to the core CPI–

W or other core price indices, is that the

CPI–W is already commonly referenced,

including by FDIC regulations

-banking-profiles.

provide as complete of a picture of

inflation as compared to broader indices

and may miss changing trends such as

food and energy prices. One advantage

of using the CPI–W for updating and

indexing thresholds within FDIC

regulations, as opposed to the core CPI–

W or other core price indices, is that the

CPI–W is already commonly referenced,

including by FDIC regulations. Another

advantage of the CPI–W relative to the

core CPI–W or other core price indices

is that the CPI–W provides a broader

representation of consumer price

inflation, making its use as an index

more appropriate for thresholds that are

updated to reflect inflation at a cadence

of once-per-year or once-every-two-

years pace, as under the proposal. Using

a core index for purposes of updating

thresholds would not provide a full

reflection of price changes over these

time periods, since core indexes are

designed to reduce the amount of

volatility in the price levels they

measure. Using a core index over a one-

and two-year cadence may therefore not

maintain thresholds in real terms over

time.

Question 19: What would be the

advantages and disadvantages of using

core consumer price indices for

purposes of updating and indexing

thresholds within FDIC regulations

relative to using indices that are not

limited to core prices?

The U.S. Bureau of Labor Statistics

provides a non-seasonally adjusted and

seasonally adjusted version of the CPI–

W series. The seasonally adjusted data

adjust for recurring seasonal price

trends, due to weather, holidays, etc.,

and are the preferred measure for

examining short-term (less than a year)

price trends in the economy.80 By

comparison, the non-adjusted data do

not include adjustments for recurring

seasonal price trends and reflect all

prices that consumers pay, including as

a result of seasonal patterns

easonally adjusted data

adjust for recurring seasonal price

trends, due to weather, holidays, etc.,

and are the preferred measure for

examining short-term (less than a year)

price trends in the economy.80 By

comparison, the non-adjusted data do

not include adjustments for recurring

seasonal price trends and reflect all

prices that consumers pay, including as

a result of seasonal patterns. The

proposal would adjust thresholds in

FDIC regulations at the end of every

two-year period with the potential for

an interim adjustment in the intervening

year if non-seasonally adjusted inflation

exceeds 8 percent. The FDIC believes

use of the non-seasonally adjusted CPI–

W series would serve as a more

appropriate reference than the

seasonally adjusted CPI–W series for the

purpose of updating and indexing

thresholds within FDIC regulations

because such adjustments are intended

to reflect longer-term changes in

inflation.

Question 20: What would be the

advantages and disadvantages of using

seasonally adjusted price indices for

updating and indexing thresholds

within FDIC regulations? What would

be the advantages and disadvantages of

using non-seasonally adjusted price

indices?

In addition to consumer price indices,

the FDIC considered the use of other

types of indices to update and index the

regulatory thresholds subject to this

proposal. The U.S. Bureau of Economic

Analysis publishes a Gross Domestic

Product (GDP) data series on a quarterly

basis, which measures U.S. economic

activity.81 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.82 For example, 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

economic

activity.81 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.82 For example, 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. Therefore, if GDP were

used as the basis for updating and

indexing thresholds within FDIC

regulations, such thresholds would be

initially updated to a higher amount

and, going forward, would likely

increase at a faster rate than under the

proposal.

Using changes in inflation as a basis

for updating and indexing thresholds

within FDIC regulations would have the

advantage of specifically targeting price

levels to ensure dollar thresholds

remain relatively consistent, in real

terms, over time. However, financial

activity is closely related to broader

macroeconomic activity and tends to

grow together with the economy. Using

GDP as a basis for updating and

indexing thresholds may provide for

thresholds that more closely reflect the

banking industry’s proportional role in

the economy. However, a disadvantage

of using GDP within an indexing

methodology is that it is subject to

business cycle fluctuations which may

not always correspond with price level

changes, such as in a ‘‘stagflationary’’

environment where stagnant economic

growth occurs simultaneously with

inflation. Using GDP as a basis for

threshold adjustments during such a

scenario may result in thresholds that

are not revised as price levels increase,

potentially limiting the ability to

maintain dollar-based threshold levels

in real terms over time. Another

disadvantage of using GDP within an

indexing methodology is that it is a

lagging indicator that is frequently

revised

ously with

inflation. Using GDP as a basis for

threshold adjustments during such a

scenario may result in thresholds that

are not revised as price levels increase,

potentially limiting the ability to

maintain dollar-based threshold levels

in real terms over time. Another

disadvantage of using GDP within an

indexing methodology is that it is a

lagging indicator that is frequently

revised. As such, depending on the

frequency of revisions, thresholds could

be revised according to a percentage

change in GDP that is subsequently

revised, thereby limiting the indexing

methodology’s accuracy as well as the

durability of revised threshold amounts

in maintaining their levels in real terms.

Additionally, the U.S. economy is

complex and measures of GDP can

consider a wider range of factors than

changes in price level alone. As such,

GDP may be an inappropriate measure

to revise thresholds relative to inflation.

Question 21: What would be the

advantages and disadvantages of using

GDP for updating and indexing

thresholds within FDIC regulations?

The FDIC also considered updating

and indexing thresholds within FDIC

regulations using measures of growth in

banking or financial sector activity. The

banking sector and the broader financial

sector have grown faster than GDP over

the last several decades. For example,

total U.S. household financial assets

have grown by approximately 502

percent over the last three decades.83

Total bank assets for all FDIC-insured

institutions have similarly grown by

approximately 380 percent over the last

three decades, while total bank deposits

at those institutions have grown by

approximately 432 percent over the

same period.84 If thresholds within

FDIC regulations were updated based on

growth in banking or financial sector

activity, the proposed thresholds would

be several times larger than those

suggested by the growth in consumer

prices

own by

approximately 380 percent over the last

three decades, while total bank deposits

at those institutions have grown by

approximately 432 percent over the

same period.84 If thresholds within

FDIC regulations were updated based on

growth in banking or financial sector

activity, the proposed thresholds would

be several times larger than those

suggested by the growth in consumer

prices. Although it is difficult to predict

future growth in the banking industry

over the long-term, if recent growth

rates continue, indexing thresholds

within FDIC regulations using measures

of banking activity and financial sector

activity would result in thresholds

growing faster relative to indexing based

on consumer prices. Using a measure of

banking or financial sector activity as a

basis for which thresholds are revised

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85 See FDIC Quarterly Banking Profile for

December 31, 2024, and December 31, 2019,

available at https://www.fdic.gov/quarterly-

banking-profile/past-quarterly-banking-profiles.

86 See total assets reported for all FDIC-insured

institutions in FDIC Quarterly Banking Profile

ending December 31, 2024, and December 31, 1994,

both inflation-adjusted using the non-seasonally

adjusted CPI–W available at https://

fred.stlouisfed.org/series/CWUR0000SA0L1E.

would have the advantage of more

closely aligning threshold levels with

changes in the banking industry and the

relevance of banks in supporting

broader economic activity. For example,

the FDIC could use changes in total

assets of all IDIs as a measure to revise

thresholds within FDIC regulations,

which would ensure such thresholds

remain relevant to banking industry

dynamics

000SA0L1E.

would have the advantage of more

closely aligning threshold levels with

changes in the banking industry and the

relevance of banks in supporting

broader economic activity. For example,

the FDIC could use changes in total

assets of all IDIs as a measure to revise

thresholds within FDIC regulations,

which would ensure such thresholds

remain relevant to banking industry

dynamics. Using growth in the size of

the banking industry to adjust

thresholds in FDIC regulations would

account for growth trends that are

specific to the banking industry and

may be better correlated with the

characteristics of banks that affect the

costs and benefits of particular

regulations.

Overall, using growth in the size of

the banking industry to adjust

thresholds in FDIC regulations would

keep the proportion of impacted banks

relatively constant since the threshold

would increase with industry size.

However, a disadvantage of this

approach is that many thresholds are

intended to apply to banks of a certain

size, not necessarily a fixed proportion

of the industry. As the banking industry

grows, the increase in thresholds may

outpace actual changes in size and risk

profile for an individual institution.

Further, aggregate changes in industry

growth may not always be

representative of, or broadly consistent

with, changes occurring across banks of

different size ranges. For example, total

banking industry assets grew roughly

$5.45 trillion, or 29 percent, from year-

end 2019 to year-end 2024.85 By

comparison, total assets of banks with

assets between $1 billion to $100 billion

increased by $963 billion, or 19 percent,

over the same time period, while total

assets of banks with assets less than $1

billion decreased by $33 billion, or 3

percent.

Another disadvantage of this

approach is that banking or financial

sector activity reflects both real growth

and changes in inflation

5 By

comparison, total assets of banks with

assets between $1 billion to $100 billion

increased by $963 billion, or 19 percent,

over the same time period, while total

assets of banks with assets less than $1

billion decreased by $33 billion, or 3

percent.

Another disadvantage of this

approach is that banking or financial

sector activity reflects both real growth

and changes in inflation. Accordingly,

the measure of growth used to adjust

and index regulatory thresholds would

have to be discounted for inflation in

order to capture actual, activity-driven

trends within the banking industry. One

method of discounting banking sector

growth for inflation would be to

inflation-adjust total assets prior to

measuring total asset growth. Under this

approach, total real growth in banking

industry assets for all FDIC-insured

institutions that accounts for inflation

from 1995–2005 would be 128 percent

compared to 380 percent from nominal

growth.86 Compared to the use of

inflation alone, such an approach would

be relatively more complex and less

transparent to banks and market

participants.

Another disadvantage of this

approach is that certain thresholds,

including several as part of this

proposal, are set at levels that are

unrelated to asset size. Using total assets

as a basis for revising thresholds may

therefore result in threshold revisions

that are inappropriate and

disadvantageous for certain banks. By

contrast, using inflation as a basis for

revising thresholds would allow for a

more simple, transparent, and

consistent approach across varying

thresholds and banks of varying sizes.

Question 22: What would be the

advantages and disadvantages of using

measures of banking or financial sector

activity for updating and indexing

thresholds within FDIC regulations?

The table below presents a

comparison of growth in the various

indices described above across a period

of three decades

ransparent, and

consistent approach across varying

thresholds and banks of varying sizes.

Question 22: What would be the

advantages and disadvantages of using

measures of banking or financial sector

activity for updating and indexing

thresholds within FDIC regulations?

The table below presents a

comparison of growth in the various

indices described above across a period

of three decades. Growth in total assets

across the banking industry exhibited

the largest percentage change, followed

by GDP growth. Seasonal adjustments,

for those indices that applied them as an

alternative measurement, only increased

or decreased percentage changes slightly

compared to their counterparts without

seasonal adjustments.

Percentage change

1995–2005

2005–2015

2015–2025

1995–2025

CPI–W:

Non-seasonally adjusted ..........................................................................................

26.0

22.5

36.3

110.5

Seasonally adjusted .................................................................................................

26.5

22.6

36.3

111.3

Core CPI–W:

Non-seasonally adjusted ..........................................................................................

23.5

20.5

35.8

102.1

Seasonally adjusted .................................................................................................

23.7

20.5

35.8

102.4

CPI–U:

Non-seasonally adjusted ..........................................................................................

26.9

22.6

35.9

111.4

Seasonally adjusted .................................................................................................

27.3

22.5

35.9

112.0

C–CPI–U: *

Non-seasonally adjusted 1 ........................................................................................

N/A

19.9

32.1

N/A

Core CPI–U:

Non-seasonally adjusted .........................................................................................

d .................................................................................................

27.3

22.5

35.9

112.0

C–CPI–U: *

Non-seasonally adjusted 1 ........................................................................................

N/A

19.9

32.1

N/A

Core CPI–U:

Non-seasonally adjusted ..........................................................................................

25.0

20.6

35.4

104.1

Seasonally adjusted .................................................................................................

25.2

20.5

35.4

104.2

PCEPI:

Non-seasonally adjusted 2 ........................................................................................

21.2

18.5

N/A

N/A

Seasonally adjusted .................................................................................................

20.5

19.5

29.6

86.5

Core PCEPI:

Non-seasonally adjusted 2 ........................................................................................

18.9

19.1

N/A

N/A

Seasonally adjusted .................................................................................................

18.9

18.2

29.3

81.6

PPI, all commodities: *

Non-seasonally adjusted ..........................................................................................

22.8

27.2

34.0

109.4

GDPPI ..............................................................................................................................

20.2

22.4

27.1

87.0

GDP:

Non-seasonally adjusted ..........................................................................................

69.5

41.8

66.0

299.0

Seasonally adjusted .................................................................................................

69.7

41.5

66.0

298.5

Banking Industry Assets:

Nominal growth ........................................................................................................

......................................................................................

69.5

41.8

66.0

299.0

Seasonally adjusted .................................................................................................

69.7

41.5

66.0

298.5

Banking Industry Assets:

Nominal growth .........................................................................................................

101.2

53.9

55.0

379.9

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87 See § 345.12(u)(2) of appendix G to 12 CFR part

345; see also 12 CFR 1003.2(g)(1)(i).

Percentage change

1995–2005

2005–2015

2015–2025

1995–2025

Real growth 3 ............................................................................................................

59.7

25.6

13.7

127.9

Percentage changes are based on beginning-of-year measurements. For example, the percentage changes for 1995–2005 are based on Janu-

ary 1, 1995, through January 1, 2005. Some measurements use end-of-year balances from the preceding year (e.g., December 31, 1994, was

used for 1995) to compute the percentage changes.

Source data for the indices vary in intervals (monthly, quarterly, annual) but should not affect the change per 10-year span presented above.

Percent change 1995–2025 does not equal the arithmetic sum of the 10-year percent change columns due to compounding.

* Data for these indices was only available without seasonal adjustments.

1 Data for non-seasonally adjusted C–CPI–U prior to 1999 is not available.

2 Data for PCEPI and Core PCEPI, non-seasonally adjusted, after January 1, 2024, is not available.

3 Inflation adjusted using CPI–W, non-seasonally adjusted.

2. Adjustment Frequency Within the

Indexing Methodology

Under the proposal, thresholds would

generally be adjusted every two years

without seasonal adjustments.

1 Data for non-seasonally adjusted C–CPI–U prior to 1999 is not available.

2 Data for PCEPI and Core PCEPI, non-seasonally adjusted, after January 1, 2024, is not available.

3 Inflation adjusted using CPI–W, non-seasonally adjusted.

2. Adjustment Frequency Within the

Indexing Methodology

Under the proposal, thresholds would

generally be adjusted every two years. In

addition, thresholds would be adjusted

if the cumulative change in non-

seasonally adjusted CPI–W since the last

adjustment exceeds 8 percent.

Certain other FDIC and other Federal

regulations that reference the CPI–W

require threshold adjustments on a more

frequent basis. For example, the

regulations implementing the

Community Reinvestment Act and the

Home Mortgage Disclosure Act require

adjustments to thresholds based on the

year-to-year change in the average CPI–

W for each 12-month period.87

The FDIC considered various other

adjustment frequencies including

quarterly, semi-annually, annually,

every 3 years, and every 5 years.

Thresholds updated based on a shorter

adjustment frequency (e.g., quarterly)

would have the advantage of

consistently reflecting changes in

inflation and not becoming outdated

during the periods between

adjustments. For institution-level

thresholds, a shorter adjustment

frequency would reduce the number of

institutions that cross a threshold

between adjustments solely based on

growth consistent in consumer prices.

For most of the index options, including

for the CPI–W, an adjustment frequency

as short as monthly would be feasible

based on data availability. A

disadvantage of shorter update

frequencies is that it can lead to

confusion for institutions and

uncertainty regarding the applicability

of various rules. Institutions also would

have to more routinely update systems

and compliance programs to reflect

more frequently adjusted thresholds

the CPI–W, an adjustment frequency

as short as monthly would be feasible

based on data availability. A

disadvantage of shorter update

frequencies is that it can lead to

confusion for institutions and

uncertainty regarding the applicability

of various rules. Institutions also would

have to more routinely update systems

and compliance programs to reflect

more frequently adjusted thresholds.

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 heighten the potential for

banking organizations to cross

thresholds between adjustments due to

inflation.

The proposal would use a two-year

period for measuring inflation, 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 revisions 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

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.

Question 23: What would be the

advantages and disadvantages of

revising thresholds through ad-hoc

review versus regular, periodic

adjustments through a pre-determined

indexing methodology as provided

under the proposal?

Question 24: What would be the

advantages and disadvantages of using

shorter or longer adjustment frequencies

within the indexing methodology for

thresholds in FDIC regulations? For

example, the FDIC could adjust

thresholds at the end of every one-year

period, or it could adjust thresholds at

the end of every three-year, five-year or

ten-year period. Would there be

unintended consequences of using a

longer period, such as impacting the

ability of the indexing methodology to

preserve thresholds in real terms on an

inflation-adjusted basis? Alternatively,

would there be unintended

consequences of using a shorter period,

such as adding undue complexity or

burden?

Question 25: What would be the

advantages and disadvantages of

providing for a potential adjustment in

intervening year(s) if the cumulative

change in the non-seasonally adjusted

CPI–W since the last adjustment

exceeds 8 percent? Is there a level other

than 8 percent that should be

considered to require an adjustment in

the intervening year(s)? If so, what

would be the advantages and

disadvantages of such a level relative to

the 8 percent level under the proposal?

How should the FDIC balance the

objective of reflecting periods of

significant inflation with the complexity

of allowing for interim adjustments

during the two-year cadence?

3

an 8 percent that should be

considered to require an adjustment in

the intervening year(s)? If so, what

would be the advantages and

disadvantages of such a level relative to

the 8 percent level under the proposal?

How should the FDIC balance the

objective of reflecting periods of

significant inflation with the complexity

of allowing for interim adjustments

during the two-year cadence?

3. Milestone Approach

The FDIC considered 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. Under this alternative, for each

regulatory threshold, the FDIC would

calculate a potential adjusted threshold

based on inflation 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.

Under this alternative, milestone

amounts could be tailored for each

threshold to reflect a material change as

a result of inflation. For example, for

thresholds between $100 million and $1

billion, milestone amounts could occur

every $10 million. Under this approach,

if a regulatory threshold is $500 million

today, it could be adjusted higher only

if the cumulative change in inflation, as

measured at the end of a year relative to

when a threshold was implemented or

last revised, would result in an adjusted

threshold of $510 million or higher.

Milestone amounts could similarly be

set at higher levels for larger thresholds.

For example, for thresholds between $1

billion and $10 billion, milestone

amounts could occur every $100

million; between $10 billion and $100

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or higher.

Milestone amounts could similarly be

set at higher levels for larger thresholds.

For example, for thresholds between $1

billion and $10 billion, milestone

amounts could occur every $100

million; between $10 billion and $100

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88 Specifically: $950,000 * 158.4 = $150.48

million.

89 As of June 12, 2025.

90 $950,000 * 314.839 = $299.10 million.

91 15 U.S.C. 78 et seq.

92 Both parts 340 and 380 require potential

participants in asset sales by the FDIC to certify

their eligibility with the FDIC prior to participation.

Potential participants interested in bidding on

billion, milestone amounts could occur

every $1 billion; and between $100

billion and $1 trillion, milestone

amounts could occur every $10 billion.

The milestone approach would be

similar to a rounding methodology

where adjusted thresholds are rounded

to the nearest number with two

significant digits that is also less than

the unrounded adjusted threshold.

Relative to an alternative without

rounding, the milestone approach

would have the advantage of limiting

threshold changes to a degree of

materiality, eliminating potential

smaller, immaterial changes.

Additionally, the approach would

support transparency and predictability

as potential future to threshold amounts

would be known in advance, subject to

changes in inflation. However, the

approach may lead to confusion and

uncertainty, as it may be challenging for

the public to track when increases in

various thresholds will be triggered

eliminating potential

smaller, immaterial changes.

Additionally, the approach would

support transparency and predictability

as potential future to threshold amounts

would be known in advance, subject to

changes in inflation. However, the

approach may lead to confusion and

uncertainty, as it may be challenging for

the public to track when increases in

various thresholds will be triggered.

Question 26: What would be the

advantages and disadvantages to using a

milestone approach compared to the

proposed indexing methodology?

Question 27: If the FDIC were to

implement a milestone approach to

adjust thresholds in future periods for

purposes of any final rule to implement

the proposal, should the milestone

approach be combined with a minimum

cumulative change in inflation level

(e.g., 8 percent) to help ensure that

thresholds adjustments keep pace with

significant periods of inflation? What

would be the advantages and

disadvantages of this approach relative

to both the milestone approach

described above and the indexing

methodology set forth in the proposal?

4. Degree of Automation in Indexing

The proposal provides that the FDIC

would, every two years, publish a

Federal Register notice announcing

thresholds adjustments based on a pre-

determined methodology. The FDIC has

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. For example, part

347 currently contains a $60 million

threshold for aggregate underwriting

commitment limits applicable to foreign

organizations held by insured State

nonmember banks. This threshold was

established in 1998. In January 1998, the

CPI–W had an index level of 158.4

this approach a

threshold would be defined within

regulation as a starting value multiplied

by an index value. For example, part

347 currently contains a $60 million

threshold for aggregate underwriting

commitment limits applicable to foreign

organizations held by insured State

nonmember banks. This threshold was

established in 1998. In January 1998, the

CPI–W had an index level of 158.4. The

direct reference approach would

redefine the threshold to be equal to the

most recent index level of the CPI–W

multiplied by a starting value of

$380,000, which would correspond to

the dollar value needed to arrive at a

threshold of approximately $60 million

when multiplied by the CPI–W.88 The

CPI–W value as of May 2025 was

314.839.89 Therefore, under the direct

reference approach, the current dollar

value of the threshold would be $119.64

million.90 Under this approach, the

threshold would automatically update

again once the June 2025 CPI–W value

was released. The FDIC could also use

this same approach to mimic the

proposal, in which the actual threshold

would rise every two years and would

be rounded. The FDIC could also post

the thresholds on its website and notify

institutions and the public when they

are increased.

The direct reference approach has the

advantage of enhancing the automation

provided under the proposal, which

could help contribute to a relatively

more streamlined adjustment process.

However, a disadvantage of the direct

reference approach is it may be slightly

less clear for members of the public or

regulated entities. While the FDIC could

post the thresholds on its website, the

revised threshold amounts would not be

in the Code of Federal Regulations.

Question 28: What would be the

advantages and disadvantages of using

the direct reference approach to index

thresholds in FDIC regulations?

Question 29: Are there other

automated approaches (e.g., fixed dollar

amounts or percentages) that may be

appropriate?

IV. Economic Analysis

A

thresholds on its website, the

revised threshold amounts would not be

in the Code of Federal Regulations.

Question 28: What would be the

advantages and disadvantages of using

the direct reference approach to index

thresholds in FDIC regulations?

Question 29: Are there other

automated approaches (e.g., fixed dollar

amounts or percentages) that may be

appropriate?

IV. Economic Analysis

A. Expected Effects

As discussed above, the proposal

would update certain dollar thresholds

within the FDIC’s regulations generally

to incorporate changes in inflation since

the thresholds were initially

implemented or most recently adjusted.

Further, the proposed rule would

implement an indexing methodology to

adjust thresholds in future periods.

If promulgated, the proposed rule

would affect institutions with a wide

range of sizes and risk profiles. To

estimate the expected effects of the

proposal, this analysis considers all

relevant regulations and guidance

applicable to these institutions, as well

as information on the financial

condition of all IDIs as of the quarter

ending March 31, 2025.

Based on the FDIC’s analysis, the

FDIC expects the proposal could affect

IDIs, individuals and other entities as

follows:

• Part 303: The requirements in part

303 generally apply to all IDIs and any

other person or entity submitting an

application or filing to the FDIC, as

provided for under part 303. As of

March 31, 2025, the latest period for

which data is available, there were

4,471 IDIs. However, the FDIC does not

have the data necessary to estimate the

number non-IDIs that may be subject to

the requirements of part 303.

• Part 335: The requirements of part

335 apply generally to all securities

issued by FDIC-supervised depository

institutions that are subject to the

registration requirements of section

12(b) or 12(g) of the Securities Exchange

Act of 1934.91 As of March 31, 2025, the

FDIC was the primary federal supervisor

for 2,835 IDIs

mber non-IDIs that may be subject to

the requirements of part 303.

• Part 335: The requirements of part

335 apply generally to all securities

issued by FDIC-supervised depository

institutions that are subject to the

registration requirements of section

12(b) or 12(g) of the Securities Exchange

Act of 1934.91 As of March 31, 2025, the

FDIC was the primary federal supervisor

for 2,835 IDIs.

• Part 340: The requirements in part

340 generally apply to persons (both

individuals and entities) seeking to

purchase the assets of failed IDIs in

FDIC conservatorship or receivership.

Using data from the period 2019–23, as

well as internal estimates and analysis,

of part 340 Purchaser Eligibility

Certification (PEC340) submissions, the

FDIC estimates approximately 140

PEC340 submissions annually from

covered individuals and other entities.

• Part 347: The requirements in part

347 generally apply to FDIC-supervised

IDIs and foreign banks with uninsured

U.S. bank branch subsidiaries or any

foreign bank seeking to establish an

uninsured U.S. bank branch subsidiary.

As of March 31, 2025, 124 FDIC-

supervised IDIs reported having one or

more uninsured U.S. bank branches, for

a total of 180 uninsured U.S. bank

branches.

• Part 363: The requirements of part

363 generally apply to all IDIs. Part 363

generally provides annual independent

audit and reporting requirements for

such institutions. As noted above, as of

March 31, 2025, there were 4,471 IDIs.

• Part 380: The requirements in part

380 generally apply to persons

(individuals and entities) interested in

buying assets of failed financial

companies in FDIC conservatorship or

receivership under Orderly Liquidation

Authority

t 363

generally provides annual independent

audit and reporting requirements for

such institutions. As noted above, as of

March 31, 2025, there were 4,471 IDIs.

• Part 380: The requirements in part

380 generally apply to persons

(individuals and entities) interested in

buying assets of failed financial

companies in FDIC conservatorship or

receivership under Orderly Liquidation

Authority. Using internal estimates and

analysis, the FDIC estimates

approximately 66 part 380 Purchaser

Eligibility Certification (PEC380)

submissions annually from covered

persons.92

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assets of a failed IDI must file a PEC340 associated

with part 340, while those interested in bidding on

covered financial company assets must file a

PEC380 under part 380.

93 55 IDIs estimated under the current rule. 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 43

IDIs estimated under the proposal. A 40-percent

reduction, corresponding to an increase in the

general de minimis exceptions threshold from

$2,500 to $3,500, would result in 33 IDIs estimated

under the proposal.

94 See List of FDIC-Supervised Banks Filing under

the Securities Exchange Act, available at https://

www.fdic.gov/analysis/list-fdic-supervised-banks-

filing-under-securities-exchange-act.

95 Additional qualitative criteria are available in

the regulation.

96 ($100,000¥$50,000)/$50,000 = 100 percent.

B. Estimates of the Number of Directly

Affected Entities

This section discusses the expected

effects of the proposal separately under

each part of the FDIC’s regulations that

includes a threshold that would be

subject to an inflation-based adjustment.

1

curities-exchange-act.

95 Additional qualitative criteria are available in

the regulation.

96 ($100,000¥$50,000)/$50,000 = 100 percent.

B. Estimates of the Number of Directly

Affected Entities

This section discusses the expected

effects of the proposal separately under

each part of the FDIC’s regulations that

includes a threshold that would be

subject to an inflation-based adjustment.

1. Part 303

Section 303.227 discusses the criteria

for de minimis exceptions for purposes

of section 19 of the FDI Act. These

criteria include $2,500 and $1,000

thresholds for certain offenses that are

exempt from the requirements to submit

a section 19 application to the FDIC.

The proposed rule would update these

thresholds from $2,500 and $1,000 to

$3,500 and $1,225, respectively.

The FDIC used the historical annual

number of institutions that have

submitted a section 19 application as a

conservative estimate of the number of

entities that would be affected by this

amendment. Over the six-year period

ending on March 31, 2025, the FDIC

received 328 applications under section

19, or approximately 55 applications

annually. Section 19 applications can be

submitted by individuals as well as IDIs.

The FDIC does not have the information

necessary to attribute each application

submitted by an individual under

section 19 made over this period to a

particular IDI. Accordingly, for the

purposes of this analysis, the FDIC

conservatively estimates that each

section 19 application is submitted by a

unique IDI.

An increase in the thresholds under

the de minimis exception framework

would increase the number of persons

subject to the exceptions in 12 CFR

303.227. Given the 40-percent increase

in the general de minimis threshold of

$2,500 to $3,500 and the 22.5-percent

increase in the de minimis threshold for

small-dollar theft of $1,000 to $1,225,

the FDIC assumes a corresponding

decrease of between 22.5 percent and 40

percent in the estimated number of

section 19 applications

ase the number of persons

subject to the exceptions in 12 CFR

303.227. Given the 40-percent increase

in the general de minimis threshold of

$2,500 to $3,500 and the 22.5-percent

increase in the de minimis threshold for

small-dollar theft of $1,000 to $1,225,

the FDIC assumes a corresponding

decrease of between 22.5 percent and 40

percent in the estimated number of

section 19 applications. Therefore, the

FDIC estimates that the proposed rule

could reduce the annual number of IDIs

submitting section 19 applications from

55 to between 43 and 33 IDIs (rounded

to the nearest IDI).93

The proposed rule would also

establish requirements to amend certain

dollar thresholds in part 303 described

above in future periods. The FDIC does

not have the information necessary to

precisely estimate the number of entities

and the number of applications under

part 303 that would be affected by the

periodic adjustments to these dollar

thresholds in the proposed rule as a

result of future changes in inflation.

However, since the proposed rule would

more closely align these dollar

thresholds with their real values over

time, the FDIC believes that it would

mitigate unintended changes in the

volume of covered entities in future

periods.

2. Part 335

Section 335.801 provides a materiality

threshold for disclosures related to

extensions of credit to insiders. Under

this section, extensions of credit to such

individuals that are in excess of 10

percent of the equity capital accounts of

the bank or State savings association or

$5 million, whichever is less, shall be

deemed material and shall be disclosed

in addition to any other required

disclosure. The proposed rule would

update the $5 million threshold to $10

million

ns of credit to insiders. Under

this section, extensions of credit to such

individuals that are in excess of 10

percent of the equity capital accounts of

the bank or State savings association or

$5 million, whichever is less, shall be

deemed material and shall be disclosed

in addition to any other required

disclosure. The proposed rule would

update the $5 million threshold to $10

million.

To estimate the number of institutions

that would be directly affected by this

change, the FDIC identified nine IDIs 94

that are subject to the requirements

under the 1934 Securities Exchange Act

and are required to make additional

disclosures related to loans to insiders

(by virtue of being traded on a national

exchange or having more than 2,000

shareholders of record and $10 million

in assets). The FDIC does not have the

data necessary to quantify the

indebtedness of insiders at these

institutions such that it would be able

to identify which disclosures would no

longer be required by virtue of the

increased materiality threshold under

the proposal. Therefore, the FDIC

conservatively estimates that nine IDIs

may be affected by the threshold

adjustments in part 335 under the

proposed rule.

The proposed rule would also

establish requirements to amend the

dollar thresholds in part 335 described

above in future periods. The FDIC does

not have the information necessary to

precisely estimate the number of entities

that would be affected by the ongoing

adjustments to these dollar thresholds

as a result of future changes in inflation.

However, since the proposed rule would

more closely align these dollar

thresholds with their real values over

time, the FDIC believes that it would

mitigate unintended changes in the

volume of covered entities in future

periods.

3. Part 340

Section 340.4 relates to the definition

of ‘‘substantial loss’’ in the context of

restrictions on the sale of failed bank

assets

nges in inflation.

However, since the proposed rule would

more closely align these dollar

thresholds with their real values over

time, the FDIC believes that it would

mitigate unintended changes in the

volume of covered entities in future

periods.

3. Part 340

Section 340.4 relates to the definition

of ‘‘substantial loss’’ in the context of

restrictions on the sale of failed bank

assets. A person may not acquire any

assets of a failed institution from the

FDIC if the person or associated person

has participated, as an officer or director

of a failed institution or of an affiliate

of a failed institution, in a material way

in one or more transaction(s) that

caused a substantial loss to that failed

institution.95 Section 340.2 defines

‘‘substantial loss’’ using a threshold of

greater than $50,000 in losses, unpaid

final judgments, delinquent obligations,

or deficiency balance following a

foreclosure. The proposed rule would

revise the greater than $50,000

threshold to greater than $100,000.

The FDIC does not have the data

necessary to estimate the number of

persons who would submit PECs if the

proposed thresholds defining

substantial losses were increased to

greater than $100,000. To estimate the

number of persons who would be

affected by the proposal, the FDIC

analyzed historical trends for annual

part 340 Purchaser Eligibility

Certification (PEC340) submissions,

based on information from 2019 through

2023. This analysis found the FDIC

receives approximately 140 PEC340

submissions annually from individuals

or entities. The FDIC does not have the

data to estimate the number of unique

entities that would submit a PEC;

therefore, the FDIC conservatively

estimates that each PEC is submitted by

a unique entity.

An increase in the threshold would

reduce the number of persons subject to

the restrictions of part 340 by removing

persons involved in transactions

resulting in losses of greater than

$50,000 to greater than $100,000

ave the

data to estimate the number of unique

entities that would submit a PEC;

therefore, the FDIC conservatively

estimates that each PEC is submitted by

a unique entity.

An increase in the threshold would

reduce the number of persons subject to

the restrictions of part 340 by removing

persons involved in transactions

resulting in losses of greater than

$50,000 to greater than $100,000. Given

the 100 percent increase in the

threshold, the FDIC assumes a

corresponding 100 percent increase

(rounded to the nearest whole number

of persons) 96 in the estimated number

of persons that would be expected to

submit PECs under 12 CFR 340.7. This

results in an estimated 280 entities that

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97 The net change in the number of IDIs that

would be subject to these requirements from the

current rule is 22, as 774 IDIs (with total assets of

at least $500 million and less than $1 billion) are

subject under the current rule, and 752 (with total

assets of at least $1 billion and less than $5 billion)

would be subject under the proposed rule.

774¥752 = 22 IDIs.

would submit under the proposed rule,

an increase of 140 from the current rule.

The proposed rule would also adjust

the dollar thresholds in part 340 in

future periods using an indexing

methodology. The FDIC does not have

the information necessary to precisely

estimate the number of entities that

would be affected by future adjustments

to these dollar thresholds as a result of

future changes in inflation. However,

since the proposed rule would more

closely align these dollar thresholds

with their real values over time, the

FDIC believes that it would mitigate

unintended changes in the volume of

covered entities in future periods.

4

precisely

estimate the number of entities that

would be affected by future adjustments

to these dollar thresholds as a result of

future changes in inflation. However,

since the proposed rule would more

closely align these dollar thresholds

with their real values over time, the

FDIC believes that it would mitigate

unintended changes in the volume of

covered entities in future periods.

4. Part 347

Section 347.111 contains two

thresholds that would be adjusted under

the proposal. The first is for aggregate

underwriting commitment limits

applicable to foreign organizations held

by insured State nonmember banks,

which currently may not exceed the

lesser of $60 million or 25 percent of the

bank’s Tier 1 capital. The proposal

would increase the current $60 million

threshold to $120 million. The second

threshold in 12 CFR 347.111 is for

distribution and dealing limits

applicable to foreign organizations held

by insured State nonmember banks,

which currently may not exceed the

lesser of $30 million or 5 percent of the

bank’s Tier 1 capital. The proposal

would increase the current $30 million

threshold to $60 million.

To estimate the number of institutions

potentially affected by these changes,

the FDIC used data from the Federal

Reserve’s National Information Center

(NIC) to identify the number of foreign

entities with a parent company that is

an IDI. From this data, the FDIC was

able to identify 31 IDIs with foreign

subsidiaries. Of these, five are State

nonmember banks and would be subject

to part 347. The FDIC does not have the

data necessary to (1) estimate the

number of IDIs that would be subject to

these restrictions, and (2) understand

the business models of these IDIs and

their propensity to find and make

business deals that would be subject to

these restrictions under the current and

proposed rule. Therefore, the FDIC

conservatively estimates that all five

State nonmember banks would be

affected by these changes

cessary to (1) estimate the

number of IDIs that would be subject to

these restrictions, and (2) understand

the business models of these IDIs and

their propensity to find and make

business deals that would be subject to

these restrictions under the current and

proposed rule. Therefore, the FDIC

conservatively estimates that all five

State nonmember banks would be

affected by these changes.

The proposed rule would also adjust

the dollar thresholds in part 347 in

future periods using an indexing

methodology. The FDIC does not have

the information necessary to precisely

estimate the number of entities that

would be affected by future adjustments

to these dollar thresholds as a result of

future changes in inflation. However,

since the proposed rule would more

closely align these dollar thresholds

with their real values over time, the

FDIC believes that it would mitigate

unintended changes in the volume of

covered entities in future periods.

5. Part 363

Part 363 contains 24 different

thresholds that would be updated by the

proposed rule, the applicability of

which are based on an IDI’s total

consolidated assets at the beginning of

its fiscal year.

For brevity, this analysis groups

provisions with the same amended

dollar threshold level together to

address estimated changes in covered

institutions. Under the proposed rule,

the total assets thresholds for the

following requirements in part 363

would be raised from $500 million to $1

billion:

• 12 CFR 363.1(a), which provides

the general applicability criteria for part

363.

• 12 CFR 363. 5(a)(2), which

establishes minimum audit committee

requirements for IDIs with assets of

greater than $500 million but less than

$1 billion. This threshold is referenced

in part 363, appendix A, paragraphs 27,

30(c), and 35(a).

As of March 31, 2025, there were 774

IDIs that report total assets of at least

$500 million and less than $1 billion

cability criteria for part

363.

• 12 CFR 363. 5(a)(2), which

establishes minimum audit committee

requirements for IDIs with assets of

greater than $500 million but less than

$1 billion. This threshold is referenced

in part 363, appendix A, paragraphs 27,

30(c), and 35(a).

As of March 31, 2025, there were 774

IDIs that report total assets of at least

$500 million and less than $1 billion.

These 774 IDIs would no longer be

subject to the requirements described

above as a result of the proposal.

Under the proposed rule, the total

assets thresholds for the following

requirements in part 363 would be

raised from $1 billion to $5 billion:

• 12 CFR 363.2(b)(3), which requires

management to provide an assessment

of the effectiveness of ICFR as part of

the part 363 annual report submission.

This threshold is referenced in part 363,

appendix A, paragraphs 8A and 10, as

well as part 363, appendix B, paragraph

2(b).

• 12 CFR 363.3(b), which requires the

independent public accountant to

examine, attest to, and report separately

on management’s assessment of ICFR.

This threshold is referenced in part 363,

appendix A, paragraph 18A, as well as

part 363, appendix B, paragraph 2(b).

• 12 CFR 363.4(a)(2), which requires

publicly traded IDIs to submit copies of

management’s assessment of the

effectiveness of ICFR in addition to its

part 363 Annual Report.

• 12 CFR 363.4(c)(3), which requires

publicly traded IDIs to submit copies of

independent accountant’s letters and

reports.

• 12 CFR 363.5(a)(1), which

establishes additional minimum audit

committee requirements for IDIs with

assets of greater than $1 billion. This

threshold is referenced in part 363,

appendix A, paragraphs 27, 30(b), and

35(b).

• 12 CFR 363.5(a)(2), which

establishes minimum audit committee

requirements for IDIs with assets of

greater than $500 million but less than

$1 billion. This threshold is referenced

in part 363, appendix A, paragraphs 27,

30(c), and 35(a)

e requirements for IDIs with

assets of greater than $1 billion. This

threshold is referenced in part 363,

appendix A, paragraphs 27, 30(b), and

35(b).

• 12 CFR 363.5(a)(2), which

establishes minimum audit committee

requirements for IDIs with assets of

greater than $500 million but less than

$1 billion. This threshold is referenced

in part 363, appendix A, paragraphs 27,

30(c), and 35(a).

As of March 31, 2025, there were 752

IDIs that report between total assets of

at least $1 billion and less than $5

billion in assets. These 752 IDIs would

no longer be subject to the requirements

under 12 CFR 363.2 and 363.3, as well

as the audit committee requirements

under 12 CFR 363.5(a)(1) as a result of

the proposal.

The provisions in 12 CFR 363.4 only

apply to publicly traded IDIs. For

purposes of this analysis, the FDIC

conservatively estimates that all 752

IDIs will be affected by the changes to

the thresholds for these provisions

while acknowledging that fewer IDIs

will be affected by these changes.

With respect to the general audit

committee requirements under 12 CFR

363.5(a)(2) of the proposed rule, the 774

IDIs currently subject to 12 CFR

363.5(a)(2)—that is, those with between

$500 million and $1 billion in assets—

would no longer be subject to these

requirements. In addition, the 752 IDIs

with total assets of greater than $1

billion and less than $5 billion—which

are no longer subject to the

requirements under 12 CFR 363.5(a)(1),

would now be subject to the

requirem

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