FDIC Considers New Policy for Updated Regulatory Thresholds

On July 15, 2025, the Federal Deposit Insurance Corporation (FDIC) Board of Directors held an open meeting to discuss several regulatory matters. Among them, this session advanced a proposal to index key audit and reporting thresholds to inflation. This step highlights the regulators’ commitment to modernizing oversight tools, ensuring their framework adapts to present-day economic conditions, and providing some relief to community institutions.

Under the draft indexing rule, thresholds tied to asset‐size tests, audit triggers, reporting requirements, cross‐border activity limits, and liquidation caps would receive a one-time reset based on cumulative changes in the Consumer Price Index (CPI) since their last calibration across the following regulations:

FDIC Regulation	Current Applicability Threshold	Proposed Applicability Threshold Update
12 CFR Part 303: Filing Procedures	303.227: 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 303.227: “Small dollar, simple theft,” where the value of the currency, goods, or services involved has a value of $1,000 or less.	$3,500 $1,225
12 CFR Part 335: Securities of State Nonmember Banks and Savings Associations	335.801(d): 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	$10 million
12 CFR Part 340: Restrictions on Sale of Assets of a Failed Institution by the Federal Deposit Insurance Corporation	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.”	$100,000
12 CFR Part 347: International Banking	347.111(a): 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. 347.111(b): 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	$120 million $60 million
12 CFR Part 363: Annual Independent Audits and Reporting Requirements	363.1(a): This part applies to any insured depository institution with respect to any fiscal year in which its consolidated total assets as of the beginning of such fiscal year are $500 million or more. 363.2(b)(3): For an insured depository institution with consolidated total assets of $1 billion or more as of the beginning of such fiscal year, an assessment by management of the effectiveness of such internal control structure and procedures. 363.3(b): For each insured depository institution with total assets of $1 billion or more at the beginning of the institution's fiscal year, the independent public accountant who audits the institution's financial statements shall examine, attest to, and report separately on the assertion of management concerning the effectiveness of the institution's internal control structure and procedures for financial reporting. Appendix A to Part 363—Guidelines and Interpretation – 28(b)(4): 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…	$1 billion $5 billion $5 billion $120,000
12 CFR Part 380: Orderly Liquidation Authority	As in part 340, section 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.”	100,000

Thereafter, benchmarks would adjust automatically every two years, or sooner if inflation exceeds 8 percent, mirroring the CPI-W indexing mechanism used in the Community Reinvestment Act. These large increases are based on calculations of the CPI-W for the number of years since the initial thresholds were set.

The proposed approach aims to promote interagency uniformity and keep audit scope, reporting, and risk-management requirements proportionate to each institution’s size and complexity without relying on ad hoc rulemakings as inflation impacts the real value of static benchmarks over time. However, early indicators point to shifts in how banks measure and manage key compliance triggers. Higher indexed thresholds may pull smaller banks out of certain audit or reporting requirements, while faster-growing institutions could approach new trigger points sooner than expected. Furthermore, technology systems and risk‐management protocols must be recalibrated and periodically monitored to capture new trigger points. While there is relief of certain regulatory burden for institutions under this proposal, management should remain steadfast in their approach to operating robust control and risk management frameworks. Programs should continue to be risk based, and controls implemented and tested on any higher risk activities.

Under the proposal, the FDIC posed several questions for each change or adjustment that it is considering. Public comments are requested for each proposal for 60 days after publication in the Federal Register.

Our team is closely monitoring developments and stands ready to help you navigate this evolving regulatory landscape.

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