§ 208.26 - Frequency of examination.

(a) General. The Federal Reserve examines insured member banks pursuant to authority conferred by 12 U.S.C. 325 and the requirements of 12 U.S.C. 1820(d). The Federal Reserve is required to conduct a full-scope, on-site examination of every insured member bank at least once during each 12-month period.

(b) 18-month rule for certain small institutions. The Federal Reserve may conduct a full-scope, on-site examination at least once during each 18-month period, rather than each 12-month period as provided in paragraph (a) of this section, if the following conditions are satisfied:

(1) The insured member bank has total assets of $250 million or less;

(2) The insured member bank is well capitalized as defined in subpart B of this part (§ 208.33);

(3) At its most recent examination, the Federal Reserve found the insured member bank to be well managed;

(4) At its most recent examination, the Federal Reserve determined that the insured member bank was in outstanding or good condition, that is, it received a composite rating of 1 or 2 under the Uniform Financial Institutions Rating System (Copies are available at the address specified in § 216.6 of this chapter);

(5) The insured member bank currently is not subject to a formal enforcement proceeding or order by the FDIC, OCC, or Federal Reserve Board; and

(6) No person acquired control of the insured member bank during the preceding 12-month period in which a full-scope on-site examination would have been required but for this section.

(c) Authority to conduct more frequent examinations. This section does not limit the authority of the Federal Reserve to examine any insured member bank as frequently as the agency deems necessary.