Last week, the Federal Deposit Insurance Corporation (FDIC) approved a final rule updating the Federal Deposit Insurance Corporation Improvement Act audit and reporting requirements to account for inflation.
Effective January 1, the final rule will:
- Increase the Part 363 applicability asset threshold from $500 million to $1 billion.
- Raise the internal control over financial reporting (ICFR) asset threshold from $1 billion to $5 billion.
- Apply minimum audit committee requirements to institutions between $1 billion and $5 billion in total assets, up from the current range of $500 million to $1 billion.
- Increase the threshold for additional audit committee requirements from $3 billion to $5 billion.
- Update the compensation threshold in Part 363 related to the determination of whether a director is considered “independent of management” from $100,000 to $120,000.
- Provide for future adjustments indexed to inflation.
The FDIC further clarified that a bank does not need to comply with applicable Part 363 requirements in effect as of December 31, if the bank will not be subject to the requirements under the updated thresholds in effect as of January 1.
