Federal Reserve Suspends Regular Examinations for Supervised Institutions with less than $100 Billion

As part of its response to the COVID-19 crisis, the Federal Reserve recently issued a statement suspending regular exams for supervised institutions with total consolidated assets of less than $100 billion.  Existing examinations will be moved off-site.  According to the statement, examinations can still occur if the Federal Reserve identifies that an exam would be “critical to the safety and soundness or consumer protection, or is required to address an urgent or immediate need.”  These changes will be in effect until the last week of April and will be reassessed by that time.

The statement also announced several other changes that impact financial institutions.  First, the Federal Reserve encouraged financial institutions to work with borrowers who cannot meet current payments.  Financial institutions are directed to use safe, sound, and prudent practices in their efforts to assist borrowers.

The Federal Reserve is also granting a 90 day extension for entities seeking to remediate supervisory findings.  This 90 day extension applies to “matters requiring attention, matters requiring immediate attention, and provisions in a formal or informal enforcement action.”

Finally, despite the extension on remediation filings and suspension on exams, the Federal Reserve is requiring firms to submit capital plans by April 6, 2020 as part of their Comprehensive Capital Analysis.  Due to COVID-19, the Federal Reserve is increasing its focus on monitoring the impact of the crisis on the financial stability of financial institutions and will use the capital plans as part of this process.