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In late November 2025, the Federal Deposit Insurance Corporation (FDIC) issued FIL‑54‑2025, which, among other updates, adjusted the asset thresholds under 12 CFR Part 363. Section 36 of the Federal Deposit Insurance Act generally requires insured depository institutions above certain asset levels to undergo an annual independent audit, an assessment of the effectiveness of their internal control over financial reporting (ICFR), and related reporting and audit committee requirements. Part 363 implements Section 36.
Prior to FIL‑54‑2025, any insured depository institution with consolidated assets of $500 million or more at the beginning of its fiscal year was required to submit an annual report to the FDIC or its appropriate federal banking agency. This report included audited comparative financial statements, the independent public accountant's report, and a management report containing a statement of management's responsibilities and an assessment of management's compliance with designated laws and regulations.
Institutions with $1 billion or more in total consolidated assets were also required to include in that report management's assessment of the effectiveness of the ICFR along with the independent public accountant's attestation report on the ICFR.
Under FIL‑54‑2025, these thresholds have now been increased:
- From $500 million to $1 billion for the general Part 363 annual reporting requirements
- From $1 billion to $5 billion for the ICFR management assessments and related attestation requirements
Audit committee requirements are similarly adjusted to align with the updated asset ranges. Additionally, the compensation threshold used to determine whether a director is considered "independent of management" was raised from $100,000 to $120,000 to match current Securities and Exchange Commission listing standards.
Importantly, if an insured depository institution will no longer meet the Part 363 thresholds as updated effective January 1, 2026, the final rule provides immediate regulatory relief. Those institutions are no longer subject to Part 363 requirements.
Hopefully these changes were not overlooked amid year‑end activity, as they should result in meaningful cost savings going forward.
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