30-Day Federal Register Notice

55789

Rules and Regulations

Federal Register
Vol. 90, No. 231
Thursday, December 4, 2025

This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents.

FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Parts 303, 314, 335, 340, 347,
363, and 380
RIN 3064–AG15

Adjusting and Indexing Certain
Regulatory Thresholds
Federal Deposit Insurance
Corporation.
ACTION: Final rule.
AGENCY:

The Federal Deposit
Insurance Corporation (FDIC) is
adopting this final rule to amend certain
regulatory thresholds in the FDIC’s
regulations to reflect inflation.
Specifically, this final rule generally
updates such thresholds to reflect
inflation from the date of initial
implementation or the most recent
adjustment and provides for future
adjustments pursuant to an indexing
methodology. The changes set forth in
this final rule preserve the level of
certain thresholds set forth in the FDIC’s
regulations in real terms, thereby
avoiding the undesirable and
unintended outcome where the scope of
applicability for a regulatory
requirement changes due solely to
inflation rather than actual changes in
an institution’s size, risk profile, or level
of complexity.
DATES:
Effective date: The final rule is
effective January 1, 2026.
Applicability dates: An insured
depository institution (IDI) need not
comply with the applicable 12 CFR part
363 requirements in effect as of
December 31, 2025, if the IDI will not
be subject to such 12 CFR part 363
requirements under the updated
thresholds in effect as of January 1,
2026, as specified in this final rule.
FOR FURTHER INFORMATION CONTACT:
Andrew Carayiannis, Chief, Policy &
Risk Analytics Section; Bryan Jonasson,
Deputy Chief Accountant; Kimberly
Krizanovic, Senior Accounting Policy

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SUMMARY:

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Analyst; Keith Bergstresser, Senior
Policy Analyst; Lauren Brown, Senior
Policy and Risk Analyst; Jim Yu, Senior
Policy and Disclosure Analyst; Rachel
Romm-Nisson, Risk Analytics
Specialist, Capital Markets and
Accounting Policy Branch, Division of
Risk Management Supervision;
Christopher Blickley, Counsel, Legal
Division; Michelle Mire, Senior
Attorney, Legal Division; Robert Meiers,
Senior Attorney, Legal Division; Nathan
Raygor, Senior Attorney, Legal Division;
Ryan Tetrick, Deputy Director, Division
of Complex Institution Supervision and
Resolution; Alex Greenberg, Assistant
Director, Division of Resolutions and
Receiverships; [email protected],
(202) 898–6888; Federal Deposit
Insurance Corporation, 550 17th Street
NW, Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
A. Background
B. Considerations and Policy Objectives for
Updating and Indexing Thresholds
C. Overview of the Proposal
II. Overview of Comments Received
A. In General
B. Expected Effects
C. Indexing Methodology
D. Effective Date
E. Other Comments
III. Final Rule and Discussion of Comments
A. Initial Updates
1. 12 CFR part 303 (Part 303)—Filing
Procedures
2. 12 CFR part 335 (Part 335)—Securities
of State Nonmember Banks and Savings
Associations
3. 12 CFR part 340 (Part 340)—Restrictions
on Sale of Assets of a Failed Institution
by the Federal Deposit Insurance
Corporation
4. 12 CFR part 347 (Part 347)—
International Banking
5. 12 CFR part 363 (Part 363)—Annual
Independent Audits and Reporting
Requirements
i. Background
ii. Overview of Proposed Asset Threshold
Updates in Part 363
iii. Comments on Part 363
iv. Response to Comments on Part 363
v. Final Rule
6. 12 CFR part 380 (Part 380)—Orderly
Liquidation Authority
7. Additional Thresholds
8. Effective Date of Initial Threshold
Updates
9. Alternatives for Threshold Application
B. Indexing Methodology for Future
Threshold Adjustments
1. Description of Proposed Methodology

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i. Comments on the Proposed Methodology
ii. Response to Comments on the Proposed
Methodology
2. Alternatives to the Proposed Indexing
Methodology
i. Alternative Measures of Indexing: Other
Price Indices
ii. Alternative Measures of Indexing: Gross
Domestic Product
ii. Alternative Measures of Indexing: Other
Measures
iv. Adjustment Frequency Within the
Indexing Methodology
v. Degree of Automation in Indexing
3. Final Rule—Indexing Methodology
i. Indexing Methodology, In General
ii. Effective Date and Timing of Future
Adjustments
IV. Economic Analysis
A. Expected Scope of Impact
B. Estimates of the Number of Directly
Affected Entities
C. Costs and Benefits of the Final Rule
D. Overall Assessment
V. Administrative Law Matters
A. Administrative Procedure Act
B. Congressional Review Act
C. Paperwork Reduction Act
D. Regulatory Flexibility Act Analysis
E. Plain Language
F. Riegle Community Development and
Regulatory Improvement Act of 1994
G. Executive Orders 12866 and 13563
H. Executive Order 14192

I. Introduction
A. Background
Various regulations promulgated by
the FDIC use thresholds to determine
their scope of applicability. The most
common threshold is the amount of
total on-balance sheet assets of an
institution (measured in dollars), which
has long served as a proxy for an
institution’s size.1 In some cases, assetbased thresholds are combined with
other thresholds to serve as proxies for
an institution’s risk profile or level of
complexity, such as the amount of offbalance sheet exposures or crossjurisdictional activities.2 Combining
thresholds in this manner allows for a
regulatory framework that is tailored to
the risks presented by an individual
institution or categories of institutions.3
1 See, e.g., 12 CFR 337.12(b) (classifying
institutions with less than $3 billion in assets as
small for examination cycle purpose); 12 CFR 324.2
(providing definitions for Category II and III FDICsupervised institutions).
2 See, e.g., 12 CFR 329.3.
3 For example, for large financial institutions with
total assets of $100 billion or more, capital and
liquidity requirements increase in stringency based
on measures of size, cross-jurisdictional activity,

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Additionally, while most thresholds set
a general level of applicability for a
regulation, in some instances,
thresholds establish exclusions, provide
for optionality, or tailor individual
requirements within a broad-based
regulation to the varying sizes, risk
profiles, and levels of complexity of inscope institutions.
Under the FDIC’s regulations, most
thresholds are static, with no
mechanism for periodic adjustments
over time. To change a static threshold,
the FDIC must, in general, provide
notice and seek comment on any such
change before it can be implemented as
final.4 Certain thresholds within the
FDIC’s regulations are required by
statute and therefore cannot be changed
without legislative amendments.5
The FDIC has occasionally revised
discretionary regulatory thresholds or
established a mechanism within a
regulation to allow for adjustments on a
periodic basis. For example, 12 CFR part
345, which implements the Community
Reinvestment Act,6 defines small and
intermediate-small banks by reference to
asset-size criteria expressed in dollar
amounts, which are adjusted annually
based on the year-to-year change in
inflation through a Federal Register
notice.7

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B. Considerations and Policy Objectives
for Updating and Indexing Thresholds
As discussed above, the use of
applicability thresholds allows the FDIC
to differentiate and tailor regulatory
requirements based on an institution’s
size, risk profile, and level of
complexity. However, static dollarbased thresholds can lead to unintended
policy consequences if threshold levels
are not periodically updated or indexed
to inflation. For example, smaller and
mid-size institutions can become subject
to asset-based requirements originally
intended for relatively larger
institutions solely as a result of growth
in price levels, thereby increasing
burden for reasons unrelated to changes
weighted short-term wholesale funding, nonbank
assets, and off-balance sheet exposure. See 12 CFR
252.5, 12 CFR 238.10.
4 5 U.S.C. 553(b), (c).
5 See, e.g., 12 U.S.C. 5365(i)(2)(A), which
generally requires financial companies to conduct
periodic stress tests if their total consolidated assets
are greater than $250 billion. Pursuant to this
statutory language, the FDIC’s regulations reiterate
this $250 billion threshold at 12 CFR 325.2(c).
6 12 U.S.C. 2901 et seq.
7 Specifically, this adjustment corresponds to the
average of the Consumer Price Index for Urban
Wage Earners and Clerical Workers, not seasonally
adjusted, for each 12-month period ending in
November, with rounding to the nearest million.
See Community Reinvestment Act Regulations
Asset-Size Thresholds, 89 FR 106480, 106481 (Dec.
30, 2024).

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in their inflation-adjusted size or risk
profile.
Modifications to regulatory thresholds
can be made in several ways in order to
help preserve their intended application
and policy objectives. A threshold may
be periodically updated through ad-hoc
review, for example, as a one-time
update without pre-determining any
additional, automatic future
adjustments. Such an approach would
help to preserve the threshold’s
intended application since it was first
implemented or most recently amended
but would not efficiently provide for
preservation of the intended threshold
level over time. Separately, a regulatory
threshold may be automatically adjusted
in future periods, for example, through
periodic adjustments using a predetermined indexing methodology
based on a certain factor, such as
inflation. Automatic adjustments in this
way would more efficiently and
transparently preserve a threshold’s
intended application and maintain
alignment with intended policy
objectives over time. However, if not
properly structured for future periods,
index-based adjustments can lead to
unintended and undesirable outcomes.
For example, adjusting regulatory
thresholds too frequently and in the
absence of meaningful changes in the
chosen index can result in
inefficiencies, as institutions may incur
costs to frequently review their practices
to reflect adjusted thresholds. By
contrast, infrequent adjustments also
result in larger, less gradual adjustments
that can impair the certainty and
predictability of a regulatory framework
and create challenges for regulatory
compliance and balance sheet
management practices.
Properly structured, appropriately
sequenced and predictable threshold
adjustments promote consistent
application of regulatory requirements
over time and contribute to a more
durable regulatory framework. In
addition, such adjustments can enhance
transparency and certainty by providing
institutions with a pre-determined
schedule for future regulatory changes
and therefore allow for more enhanced
balance sheet management practices.
C. Overview of the Proposal
On July 28, 2025, the FDIC published
a notice of proposed rulemaking (the
proposal) in the Federal Register that
proposed to update and, in the future,
adjust certain regulatory thresholds in
the FDIC’s regulations to reflect
inflation and certain other
considerations.8 Under the proposal, the
8 90

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FR 35449 (July 28, 2025).

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FDIC would initially update such
thresholds to reflect historical inflation 9
(which would be measured as the
percentage change in the non-seasonally
adjusted Consumer Price Index for
Urban Wage Earners and Clerical
Workers (CPI–W)),10 generally based off
the date of initial implementation or the
most recent quantitative adjustment.
Additionally, the proposal would
implement an indexing methodology for
subsequent, periodic adjustments for
most thresholds that would be
effectuated automatically every two
consecutive years or during any
intervening year when the cumulative
change in CPI–W since the last
adjustment increases by more than 8
percent.11
The FDIC noted in the proposal that
the proposal was the first of a multiphase effort to reevaluate thresholds
within the FDIC’s regulations, and that
the FDIC expects to solicit comment on
one or more future proposals to update
and adjust additional thresholds.
As discussed in the sections that
follow, the FDIC proposed to initially
update and thereafter periodically
adjust certain thresholds in the
following FDIC regulations:
• 12 CFR part 303—Filing Procedures
• 12 CFR part 335—Securities of
Nonmember Banks and State Savings
Associations
• 12 CFR part 340—Restrictions on Sale
of Assets of a Failed Institution by the
Federal Deposit Insurance
Corporation
• 12 CFR part 347—International
Banking
• 12 CFR part 363—Annual
Independent Audits and Reporting
Requirements
• 12 CFR part 380—Orderly Liquidation
Authority
II. Overview of Comments Received
A. In General
The FDIC received over 100 comment
letters on the proposal for updating and
indexing certain regulatory thresholds,
9 Certain thresholds under the proposal would be
updated initially to reflect other considerations. For
example, as discussed in section III.A.5 of this
SUPPLEMENTARY INFORMATION, the proposal would
initially update thresholds in 12 CFR part 363 to
help ensure sound financial management of the
institutions posing the greatest potential risk to the
Deposit Insurance Fund. 70 FR 71226, 71227 (Nov.
28, 2005).
10 The U.S. Bureau of Labor Statistics publishes
the CPI–W on a monthly basis. The CPI–W is used
to annually adjust benefits paid to Social Security
beneficiaries and Supplemental Security Income
recipients. U.S. Social Security Administration, CPI
for Urban Wage Earners and Clerical Workers,
available at www.ssa.gov/oact/STATS/cpiw.html.
11 Any references to inflation in this final rule
refer to inflation as measured under the CPI–W,
unless specifically noted otherwise.

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predominantly from community
banking institutions, but also from
industry and trade groups representing
the banking and financial services
industry, accounting firms, public
policy and public interest organizations,
financial services firms, a law firm, a
professional organization of financial
regulators, and individuals.
The comments received generally
expressed support for the proposal, in
particular comments received from
community banking institutions.
Commenters generally supported the
proposed updates to certain regulatory
thresholds, with many indicating such
updates would provide a meaningful
benefit through reduced regulatory
burden. In addition, many commenters
supported the proposed indexing
methodology to adjust thresholds
according to changes in inflation in
future periods. While some commenters
advocated for changes to specific
aspects of the proposed indexing
methodology, many were supportive of
a mechanism to adjust thresholds in
future periods generally.
The majority of the comments
pertained to part 363 thresholds with
most commenters generally supportive
of the proposed updates to those
thresholds, indicating the proposed
changes would result in material cost
savings to their institutions and allow
for more efficient use of bank resources.
A summary of comments related to part
363 thresholds is provided in section
III.A.5 of this SUPPLEMENTARY
INFORMATION, below.
Commenters also expressed a view
that the proposed updates would not
come at the expense of safety and
soundness, as increases in asset size
have primarily been a result of factors
such as inflation, industry changes, and
a pandemic-related surge in deposits,
rather than material changes in risk
profile and complexity of activities.
Several commenters requested that
considerations be made regarding
timing, including the effective date and
retroactive application.
B. Expected Effects
In general, many commenters
indicated the proposal would positively
affect their institutions or the banking
industry broadly. Many commenters
indicated that cost savings from reduced
12 CFR part 363 compliance costs
would be reinvested into innovation,
technology, lending to the local
community, and customer experience.
Some commenters stated that failing to
index thresholds would constrain
intuitions’ strategic growth decisions
and would allow regulatory
requirements to extend far beyond their

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original policy scope. One commenter
asserted that updating and indexing
thresholds reduces regulatory burden on
smaller institutions while allowing
supervisory focus to remain on larger,
systemically significant entities.
Commenters also expressed the view
that thresholds included in the proposal
are no longer reflective of economic
conditions and providing for updates
and indexing would ensure thresholds
evolve with economic growth. One
commenter noted that adjustments to
various thresholds, when viewed in
aggregate, can have a deregulatory effect
on the banking industry by loosening
reporting requirements and protections
that control risk.
C. Indexing Methodology
Many commenters supported the
proposed indexing methodology and
expressed support for subsequent,
periodic threshold adjustments that
occur automatically. However, some
commenters stated that automatic
adjustments to thresholds would be
complex and unpredictable and could
create burden on banks when designing,
implementing, and maintaining internal
control frameworks. One commenter
stated that automatically indexing
thresholds erodes transparency and
makes it difficult to predict in advance
whether an IDI will cross the threshold
in the following year.
Comments were mixed as to whether
to use CPI–W as the reference index
under the proposed indexing
methodology. A few commenters
supported the FDIC applying the same
methodology when updating and
adjusting thresholds across its
regulations, while others suggested
alternatives to CPI–W, including
nominal GDP, banking industry assets,
or an approach that would tailor the
reference index by threshold type.
These commenters suggested using CPI–
W for consumer-facing monetary
thresholds, and nominal GDP for assetbased thresholds. Many of these
commenters also noted that the
proposed updated thresholds are lower
than they would otherwise be if
adjusted using growth in GDP as a basis
for adjustments. One commenter
suggested that thresholds should be
raised beyond the rate of inflation, as
the number of banks has declined and
new bank formations have been low.
Additionally, one commenter suggested
that thresholds should be adjusted for
periods of deflation.
Comments related to an alternative
approach discussed in the proposal that
allowed for future adjustments only at
pre-determined levels (i.e., a milestone
approach) were mixed, with

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commenters offering diverging
perspectives about whether this
approach would provide regulatory
certainty.
D. Effective Date
Under the proposal, initial updates
would become effective, consistent with
applicable law, at the beginning of the
first calendar quarter following adoption
of the final rule. Several commenters
generally requested more time to
comply with the proposed threshold
changes, while others more specifically
recommended a transitional process.
Additionally, some commenters
requested clarity regarding transition
timelines.
Several commenters recommended a
specific effective date of January 1,
2025, for the proposed changes, to allow
for retroactive application of the
updated thresholds. Some commenters
suggested that the rule be effective
immediately, while one commenter
proposed the rule be delayed until
January 1, 2027. A number of
commenters also suggested that the
FDIC determine whether institutions
have crossed thresholds by evaluating
an institution’s assets over a period of
time, such as over several quarters or
over several years.
E. Other Comments
Some commenters recommended
application of the proposal to additional
thresholds. For example, commenters
recommended updates and adjustments
to thresholds such as the qualifying
equity interest of national bank directors
threshold, appraisal thresholds for real
estate properties, the Community
Reinvestment Act intermediate-small
bank threshold, bank holding company
thresholds, currency transaction
reporting thresholds, Dodd-Frank Act’s
Durbin Amendment threshold, and
thresholds used to determine
applicability of regulatory capital and
liquidity requirements. These
commenters requested the FDIC
coordinate with the other Federal
banking agencies to update additional
thresholds that do not appear only
within FDIC regulations, as well as
coordinate with Congress to update
statutory thresholds.
Comments regarding 12 CFR part 363
thresholds were also received as part of
the regulatory review being conducted
pursuant to the Economic Growth and
Regulatory Paperwork Reduction Act of
1996 (EGRPRA).12 Comments included
12 The FDIC, together with the Federal Financial
Institutions Examination Council, Office of the
Comptroller of Currency, and the Board of
Governors of the Federal Reserve System (FRB),

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recommendations to raise the
requirement regarding audited financial
statements from $500 million to $1
billion and the internal control over
financial reporting (ICFR) requirement
from $1 billion to $2.5 billion or $10
billion. Additionally, these comments
indicated that the Federal Deposit
Insurance Corporation Improvement Act
(FDICIA) audit and reporting
requirements are costly and burdensome
for small community banks, and that it
is difficult for small, rural banks to
comply with audit committee
composition requirements. Several
commenters suggested tailoring
regulatory thresholds by distinguishing
banks by asset size, and three comments
submitted under the EGRPRA review
expressed support for amending 12 CFR
part 363 thresholds.
III. Final Rule and Discussion of
Comments
The FDIC carefully considered all
comments received and is finalizing the
threshold updates and indexing
methodology for future adjustments
generally as proposed. Except as
otherwise provided,13 the final rule
updates the thresholds described below
to reflect historical inflation and
indexes most of these thresholds to
account for future inflation. The FDIC is
changing the effective date of future
threshold adjustments as discussed in
more detail below, as compared to the
proposal. Additionally, the FDIC is
providing that certain IDIs may be
exempted from requirements under 12
CFR part 363 as it relates to future
threshold adjustments, as described
below.

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A. Initial Updates
While many commenters were
supportive of the policy objectives of
the proposal, some expressed
reservations related to updating
thresholds without reassessing their
original policy designs. While these
commenters supported updating
thresholds included in the proposal
commenced a review under the Economic Growth
and Regulatory Paperwork Reduction Act of 1996
in 2024 to solicit feedback from the public on
potentially outdated or otherwise unnecessary
regulatory requirements. The FDIC has reviewed
and considered those comments received pursuant
to the EGRPRA review that relate to the thresholds
considered within this rulemaking.
13 As discussed in section III.A.5 of this
SUPPLEMENTARY INFORMATION, the initial updates to
thresholds in 12 CFR part 363 support a key
underlying objective of the regulation, while
maintaining consistency with the historical scope of
applicability and reducing burden for smaller
institutions. In addition, one threshold under 12
CFR part 363 that is intended to align to listing
standards of the national securities exchanges is not
subject to the proposed indexing methodology.

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generally, they expressed concern that
the proposed updates would
inadvertently perpetuate outdated or
arbitrary policy design choices without
reassessing their basis. As explained in
the proposal, the FDIC sought to update
thresholds according to changes in
inflation since their implementation or
most recent adjustment, while also
considering policy objectives and
intended application. For example, the
proposed updates to certain thresholds
under 12 CFR part 363 reflected other
considerations to help ensure sound
financial management of the institutions
posing the greatest potential risk to the
Deposit Insurance Fund (DIF). As
discussed below, the final rule adopts
the initial update approach set forth in
the proposal.
1. 12 CFR Part 303 (Part 303)—Filing
Procedures
Section 19 of the FDI Act (section 19)
prohibits, without the prior written
consent of the FDIC, a person convicted
of any criminal offense involving
dishonesty, breach of trust, or money
laundering, or who has entered into a
pretrial diversion or similar program in
connection with a prosecution for such
an offense (collectively, covered
offenses), from becoming or continuing
to serve as an institution-affiliated
party.14 Subpart L of part 303 of the
FDIC’s regulations implements section
19 and includes separate $2,500 and
$1,000 de minimis thresholds for certain
offenses that are excluded from the
scope of section 19 and for which no
section 19 application is required.15
Specifically, under 12 CFR 303.227,
the requirements of section 19 do not
apply to 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, and that meet the
additional criteria set forth in that
section. In addition, the requirements of
section 19 do not apply to ‘‘small dollar,
simple theft,’’ which includes, among
other requirements, the simple theft of
goods, services, or currency (or other
monetary instrument) if the value of the
currency, goods, or services involved
has a value of $1,000 or less.16
For purposes of implementing section
19, an ongoing, significant objective of
14 12

U.S.C. 1829.
that 12 CFR 303.227 contains 3 different
dollar thresholds setting forth different de minimis
exceptions. The $2,000 or less threshold for bad
checks set forth in 12 CFR 303.227(b)(2)(i) is set by
statute (12 U.S.C. 1829(c)(3)(C)) and is therefore not
within the FDIC’s discretion to adjust and not
included in this final rule.
16 Additional criteria that must be met are set
forth in 12 CFR 303.227(b)(3).
15 Note

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the FDIC has been to establish criteria
for the de minimis exception framework
such that it applies to offenses that are
relatively minor in nature and help to
ensure that prior conduct of the covered
party would pose low risk to an IDI.
Over time, the FDIC has expanded the
scope of the de minimis framework
based on historical analysis that showed
the FDIC routinely approved section 19
applications involving minor offenses.17
Every expansion of the de minimis
framework ultimately provided
additional relief to potential applicants
without undermining the purpose of
section 19 or causing undue risk to an
institution or the DIF.18 Under the
proposal, the $2,500 and $1,000 de
minimis thresholds would be updated to
$3,500 and $1,225, respectively, to
reflect inflation since these thresholds
were previously set.19
The FDIC received several comments
related to these proposed changes. One
commenter supported adjusting the part
303 threshold as described in the
proposal because consumer-facing
thresholds are more appropriately tied
to consumer inflation and CPI–W
indexes (in contrast to other thresholds
for which the commenter argued that a
different methodology would be more
appropriate).
After considering the comments
received, the FDIC is finalizing the
proposed updates to the de minimis
thresholds, without change. The
updates in the final rule help preserve
the intended level of these thresholds in
real terms while providing meaningful
relief from barriers to employment
opportunities, consistent with the
purpose of section 19 and prior
amendments to the de minimis
exception framework.
17 For example, in 2018, the FDIC broadened the
application of the de minimis exception to filing an
application due to the minor nature of the offenses
and the low risk that the covered party would pose
to an IDI based on the conviction or program entry.
By modifying these provisions, the FDIC stated it
believed that there would be a reduction in the
submission of applications where approval has
been granted by virtue of the de minimis offenses
exceptions to filing in the policy statement. 83 FR
38143 (Aug. 3, 2018).
18 For example, changes to the de minimis
exception in the final rule published in 2020 would
have reduced past applications by approximately 20
percent. Fact Sheet: FDIC Issues Rule on Section 19
of the Federal Deposit Insurance Act (July 2020),
available at https://www.fdic.gov/news/section19-724-20.pdf.
19 The non-seasonally adjusted CPI–W increased
by approximately 38 percent since the $2,500 de
minimis threshold was set in 2012 and
approximately 23 percent since the $1,000 de
minimis threshold was set in 2020.

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2. 12 CFR Part 335 (Part 335)—
Securities of State Nonmember Banks
and Savings Associations

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Part 335 of the FDIC’s regulations
provides securities registration,
recordkeeping, and disclosure
requirements for State nonmember
banks and State savings associations
with one or more classes of securities
required to be registered under section
12 of the Securities Exchange Act of
1934 (Exchange Act), as amended.20
Section 335.801 requires those State
nonmember banks and State savings
associations to disclose any extensions
of credit to insiders that are in excess of
10 percent of the capital account of an
institution or $5 million, whichever is
less.21 The FDIC set the $5 million
threshold in 1979, stating that the prior
threshold of $10 million was too high to
allow for meaningful disclosure.22 The
FDIC revisited this amount in 1997 and
determined at the time that the overall
benefit to the banking industry resulting
from continuation of the FDIC’s
historical disclosure requirements under
part 335, including the $5 million
threshold, was in the public interest and
appropriate for protection of investors.23
The proposal would update the $5
million threshold to $10 million to
reflect inflation since the FDIC’s most
recent consideration of the threshold.24
The FDIC received one comment
related to this proposed change. This
commenter stated that loosening
standards, including the threshold for
having to report to the FDIC loans made
by banks to insiders, can increase
aggregate risk. The commenter
recommended that the FDIC monitor
and report on the actual impact that
comes from adjusting regulatory
thresholds so that additional changes
can be made if needed.
The final rule adopts the $10 million
threshold for 12 CFR 335.801, as
proposed. The final rule preserves the
level of this threshold in real terms and
helps avoid increases in the number of
credit extensions that must be reported
to the FDIC due solely to inflation rather
than actual changes in the level of risk
associated with such transactions.

20 12

CFR part 335.
CFR 335.801(d).
22 44 FR 33077, 33079 (June 8, 1979).
23 62 FR 6852, 6855 (Feb. 14, 1997).
24 If indexed to inflation since the FDIC’s most
recent consideration of the indebtedness of
management disclosure provisions in 1997, the $5
million threshold would be $9.9 million.
21 12

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3. 12 CFR Part 340 (Part 340)—
Restrictions on Sale of Assets of a Failed
Institution by the Federal Deposit
Insurance Corporation
Part 340 of the FDIC’s regulations sets
forth restrictions on the FDIC’s sale of
failed IDI assets to individuals or
entities that improperly profited from,
or engaged in, wrongdoing at the
expense of a failed IDI or, that seriously
mismanaged a failed IDI.25 Among other
restrictions, part 340 prohibits a person
from acquiring any assets of a failed IDI
if the person or its associated person has
caused a substantial loss to that failed
institution 26 or has demonstrated a
pattern or practice causing a substantial
loss to one or more failed institutions.27
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.’’ 28 The FDIC added part
340 to the FDIC’s regulations in 2000.29
Subsequent updates to part 340 have not
substantively modified the ‘‘substantial
loss’’ definition or the $50,000
threshold.30 The substantial loss
provisions and the $50,000 threshold
are also included in the FDIC’s
Purchaser Eligibility Certification form,
which is required under part 340 for all
prospective purchasers of failed IDI
assets.31 The FDIC proposed to revise
the ‘‘substantial loss’’ threshold in part
340 by updating the existing threshold
from $50,000 to $100,000 to reflect
inflation since the threshold was added
to part 340.32
The FDIC is adopting the approach
taken in the proposed rule, without
change. Updating the threshold for
‘‘substantial loss’’ to reflect inflation
preserves the level of the threshold in
real terms, while allowing more
prospective purchasers to make offers to
25 12

CFR 340.1(b).
CFR 340.4(a)(1).
27 12 CFR 340.4(c).
28 12 CFR 340.2(h).
29 65 FR 14816, 14818 (Mar. 20, 2000).
30 As discussed in more detail below, part 340,
including the ‘‘substantial loss’’ provisions and the
$50,000 threshold, was the model for and is
intended to match the substantially similar
provisions applicable to FDIC-covered financial
company asset sales under 12 CFR 380.13. See 80
FR 22886 (Apr. 24, 2015) (explaining that, because
of the substantially similar language in the statutes
authorizing the respective rules, part 340 served as
a model for the development of the rules at 12 CFR
380.13.). See also, id., at 80 FR 22887 (describing
the updates to part 340 made to ensure consistency
between part 340 and 12 CFR 380.13).
31 The Purchaser Eligibility Certification form,
available at https://www.fdic.gov/asset-sales/
purchaser-eligibility-certification-pec.pdf.
32 If indexed to inflation since the FDIC
established the ‘‘substantial loss’’ threshold in 2000,
the $50,000 threshold would be $92,666. This
updated threshold of $100,000 approximates
inflation adjustments.
26 12

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55793

buy failed IDI assets. The FDIC expects
this update to improve competition for
the prices paid for failed IDI assets.
4. 12 CFR Part 347 (Part 347)—
International Banking
The FDIC issued a final rule in 1998
amending its international banking
regulations and consolidating them into
part 347.33 Subpart A to part 347, which
implements sections 18(d) and 18(l) of
the FDI Act, sets forth the requirements
for insured State nonmember bank
investments in foreign organizations,
permissible foreign financial activities,
loans or extensions of credit to or for the
account of foreign organizations, and
the FDIC’s related recordkeeping,
supervision, and approval requirements.
Subpart A also addresses permissible
activities for foreign branches of insured
State nonmember banks.
Under subpart A of part 347, a State
nonmember bank may hold an equity
interest in one or more foreign
organizations that underwrite, deal, or
distribute equity securities outside of
the United States, subject to certain
limitations. Two of those limitations
include dollar-based thresholds. First,
12 CFR 347.111(a) provides that the
aggregate underwriting commitments by
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. Second, 12 CFR
347.111(b) provides that the 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, subject to certain
other requirements.
The dollar-based thresholds under
subpart A of part 347 were established
in 1998 and have not since been
updated. To preserve the level of these
thresholds in real terms, the proposal
would revise these dollar limits on
aggregate underwriting commitments
and on equity securities held for
distribution or dealing to $120 million
and $60 million, respectively, to
approximate inflation adjustments since
1998.
The FDIC received several comments
related to the proposed changes. One
commenter expressed support for
33 63

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FR 17056 (Apr. 8, 1998).

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raising the dollar limits in part 347,
stating that increasing the thresholds
would enable IDIs to provide more
services internationally and compete
with non-U.S. banks, which would help
support the competitive position of U.S.
institutions internationally.
Additionally, one commenter agreed
with recognizing inflation within part
347 but noted that adjustments can have
a deregulatory effect on the banking
industry.
After considering comments received,
the FDIC is adopting the proposed
changes to part 347 without change. By
updating these thresholds, the final rule
preserves their levels in real terms and
supports the ability of insured State
nonmember banks to compete
internationally, consistent with policy
objectives of part 347.
5. 12 CFR Part 363 (Part 363)—Annual
Independent Audits and Reporting
Requirements

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i. Background
Section 112 of the FDICIA added
section 36, ‘‘Early Identification of
Needed Improvements in Financial
Management,’’ to the FDI Act.34 Section
36 generally subjects IDIs above a
certain asset size threshold to an annual
independent audit, assessment of the
effectiveness of internal control over
financial reporting (ICFR), and
compliance with designated laws and
regulations, as well as related reporting
requirements. Section 36 also includes
requirements for audit committees of
these IDIs. Section 36 grants the FDIC
discretion to set the asset size threshold
for compliance with these requirements,
but it also provides that the threshold
shall not be less than $150 million.35
Part 363 of the FDIC’s regulations
implements section 36 and requires any
IDI with total consolidated assets of
$500 million or more at the beginning
of its fiscal year to submit to the FDIC
and other appropriate Federal and State
supervisory agencies an annual report
(Part 363 Annual Report) comprised of
audited comparative financial
statements, the independent public
accountant’s report thereon, a
management report containing a
statement of management’s
responsibilities, and an assessment by
management of compliance with
applicable laws and regulations.36 The
34 12

U.S.C. 1831m.
with the statute, the FDIC consulted
with the other Federal banking agencies about
updating these thresholds and the methodology to
adjust affected thresholds in the future.
36 The requirements under part 363 are set forth
in 12 CFR 363.2 and 363.4(a). Part 363 also contains
audit committee composition requirements and
other reporting and notice requirements. Further,
35 Consistent

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Part 363 Annual Report for an IDI with
$1 billion or more in total consolidated
assets must also include an assessment
by management of the effectiveness of
ICFR (within the management report)
and the independent public
accountant’s attestation report on
ICFR.37 From 1993, the year that the
ICFR threshold was implemented at
$500 million, to 2005, the FDIC did not
adjust this threshold. In 2005, the ICFR
threshold was increased from $500
million to $1 billion.38
When the FDIC initially implemented
part 363 in 1993, use of a $500 million
asset threshold captured approximately
1,000 IDIs (out of approximately 14,000)
holding 75 percent of U.S. banking
assets, while exempting approximately
two-thirds of IDIs that would have been
subject to part 363 under a $150 million
threshold.39 In addition, at the time of
initial implementation, more than 96
percent of these covered institutions
reported that they were subject to an
annual audit by an independent public
accountant at the IDI or parent company
level. The initial scope of application
for part 363 was intended to help ensure
sound financial management of the
institutions posing the greatest potential
risk to the DIF.40 The 2005 amendment
to the ICFR threshold in part 363
reflected a recognition that compliance
with the audit and reporting
requirements had become more
burdensome and costly, particularly for
smaller nonpublic institutions.41 In
addition, due to consolidation in the
banking and thrift industry and the
effects of inflation, the scope of
applicability for part 363 had increased
to cover more than 1,150 (out of 8,900)
IDIs, representing approximately 90
percent of industry assets.42 Following
the 2005 amendment, about 600 of the
largest IDIs with approximately 86
percent of industry assets continued to
be covered by the ICFR requirements of
part 363. This change was intended to
achieve meaningful burden reduction in
a manner consistent with safety and
soundness.43 Subsequent amendments
to part 363 in 2009 44 and 2020 45 did
public companies may have additional
requirements under the Sarbanes-Oxley Act of
2002.
37 See 12 CFR 363.2(b)(3), 363.3(b), and 363.4(a).
38 70 FR 71226, 71227 (Nov. 28, 2005).
39 58 FR 31332, 31333 (June 2, 1993).
40 Id.
41 70 FR 71227.
42 Id.
43 Id.
44 74 FR 35726 (July 20, 2009).
45 85 FR 67427 (Oct. 23, 2020). In 2020, the FDIC
adopted an interim final rule allowing IDIs to use
total consolidated assets as of December 31, 2019,
for purposes of the asset thresholds in part 363 for
fiscal years ending in 2021.

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not result in permanent changes to the
regulatory asset thresholds.
ii. Overview of Proposed Asset
Threshold Updates in Part 363
Many of the dollar-based thresholds
in part 363 have been in place for more
than 30 years. The proposal would
increase the applicability asset
threshold from $500 million to $1
billion and the ICFR asset threshold
from $1 billion to $5 billion.
Additionally, the FDIC proposed to
increase the threshold related to
minimum audit committee requirements
for IDIs from the range of $500 million
to less than $1 billion in total assets to
the range of $1 billion to less than $5
billion in total assets, as well as the
threshold of $1 billion or more in total
assets to $5 billion or more. The FDIC
also proposed to increase the threshold
related to additional audit committee
requirements from $3 billion to $5
billion.46 Use of these proposed
thresholds would help support a key
underlying objective of part 363—that
is, achieving sound financial
management at IDIs posing the greatest
risk to the DIF 47—and maintain
consistency with the historical scope of
applicability according to several
metrics. The proposed $1 billion and $5
billion thresholds cover institutions
holding approximately 95 and 89
percent of industry assets, respectively.
In addition, the proposed increase in the
applicability threshold from $500
million to $1 billion would result in
approximately the same number of
institutions being subject to part 363
(approximately 1,000 institutions) in
2025 as were subject to the regulation in
1993 (at its inception) and in 2005
(when the threshold for the ICFR
requirements was amended), while
removing nearly 800 institutions from
the general scope of applicability for
part 363. Similarly, the proposed
increase in the ICFR threshold from $1
billion to $5 billion would be generally
consistent with the historical
application of such requirements (to
approximately 7 percent of institutions)
at the time of initial implementation
and under the 2005 amendment. The
thresholds set forth in the proposed rule
also would achieve meaningful burden
reduction for the smallest institutions,
which would be removed from the
46 In total, the FDIC is updating 24 regulatory
asset thresholds in part 363. Several of these asset
thresholds are similar and are repeated throughout
part 363 pertaining to the general requirements of
part 363, as well as to the holding company
requirements of part 363 (for IDIs that are
subsidiaries of holding companies), and audit
committee composition requirements.
47 70 FR 71226, 71227.

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Federal Register / Vol. 90, No. 231 / Thursday, December 4, 2025 / Rules and Regulations

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scope of applicability for reporting
requirements and internal control
assessments. Furthermore, experience
has demonstrated that smaller
community institutions, particularly
those in rural areas, have had difficulty
complying with the audit committee
composition requirements. Specifically,
these institutions frequently report that
it is increasingly difficult to attract and
retain individuals who are willing and
capable of serving as a member of an
audit committee, thereby making
compliance with the audit committee
composition requirements of part 363
challenging. Irrespective of the changes
to part 363 thresholds, IDIs may still be
required to have an audit and assess
internal controls over financial
reporting by their respective States if the
institution is State chartered.48
Additionally, IDIs that are public
companies or subsidiaries of public
companies that file annual and other
periodic reports as required by the
Sarbanes-Oxley Act of 2002 are required
to have an audit and assess internal
controls over financial reporting.49 As of
March 31, 2025, approximately 52
percent of institutions not subject to
part 363 still obtained an audit.50
The FDIC also proposed an increase to
the $100,000 compensation threshold
under part 363 related to the
determination of whether a director is
considered ‘‘independent of
management.’’ 51 Paragraph 28 in
appendix A to part 363, ‘‘Independent
of Management’’ Considerations, sets
forth the criteria a board of directors
should consider when determining the
independence of an outside director for
audit committee purposes. The
independence criteria under part 363,
including the $100,000 compensation
threshold, are intended to be consistent
with those provided under the listing
standards of national securities
exchanges while providing some
48 See e.g., AL Code 5–2A–22 (2024); CA Fin Code
502 (2024); Conn. Gen. Stat 36a–86; and Ga. Comp.
R. & Regs. R. 80–1–14–.01.
49 Sarbanes-Oxley Act of 2002, Public Law 107–
204, 116 Stat. 745 (2002).
50 Call Report Data, March 31, 2025. The level of
audit work performed on an institution is reported
in the March Call Report each year and can be
found online M.1 in the Memorandum to Schedule
RC.
51 The threshold describes situations where the
director has received, or has an immediate family
member who has received, during any twelvemonth period within the last three years, more than
$100,000 in direct and indirect compensation from
the institution, its subsidiaries, and its affiliates for
consulting, advisory, or other services other than
director and committee fees and pension or other
forms of deferred compensation for prior service
(provided such compensation is not contingent in
any way on continued service).

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flexibility for smaller nonpublic
institutions.52
The FDIC implemented the $100,000
threshold under part 363 in 2009. Since
that time, the parallel threshold under
the listing standards of national
securities exchanges has been raised to
$120,000.53 Accordingly, the FDIC
proposed increasing the $100,000
compensation threshold under part 363
to $120,00 to realign it with the parallel
threshold set forth in listing standards.
This revision also would address the
potential unintended outcome where a
director could be considered
‘‘independent of management’’ for
purposes of listing standards while at
the same time being considered ‘‘not
independent of management’’ for
purposes of part 363.
In contrast to the other part 363
thresholds in the proposed rule that are
subject to automatic adjustments in the
future, the $120,000 compensation
threshold would not be subject to the
proposed indexing methodology
described in section III.B of this
SUPPLEMENTARY INFORMATION as it is
intended to align with parallel
thresholds under listing standards,
which are not subject to an indexing
methodology. The FDIC proposed to
adjust this threshold in the future to
maintain alignment with parallel
thresholds in the listing standards of the
national securities exchanges.
iii. Comments on Part 363
The part 363 suggestions most
frequently raised by commenters
centered on the proposed updated asset
threshold for the independent audit
requirement, the proposed updated
asset threshold for ICFR, the effective
date for the updated thresholds, and the
application of thresholds using average
asset balances as opposed to point-intime asset balances. Many commenters
noted the proposed changes would
substantially reduce costs and
regulatory burden, particularly for
smaller institutions. For example,
updating the thresholds for audit,
internal control, audit committee
composition, and related reporting
requirements would alleviate
meaningful challenges for smaller
institutions that have become scoped
into part 363. Commenters also
indicated the proposal would reduce
burden associated with finding qualified
individuals to serve on an audit
committee, particularly for institutions
in rural areas.
52 See

12 CFR part 363, appendix A, paragraph

28.
53 Nasdaq Stock Market Rules, Rule 5605(a)(2);
New York Stock Exchange Listed Company Manual,
section 303A.02(b)(ii).

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Many commenters were supportive of
increasing the audit requirement and
ICFR thresholds. Several commenters
suggested increasing the $500 million
asset threshold for the audit
requirement to an amount other than $1
billion as proposed. Many of these
commenters recommended specific
asset thresholds for the part 363 audit
requirement, with ranges from $2 billion
to $10 billion. One commenter
suggested a threshold as low as $750
million, while another commenter
suggested a threshold as high as $15
billion. In addition to the asset
threshold for the audit requirement,
numerous commenters suggested raising
the existing $1 billion asset threshold
for ICFR to $10 billion instead of $5
billion as proposed. One commenter
suggested eliminating the requirement
to file financial statements under certain
circumstances.
Commenters advocating for higher
thresholds than those set forth in the
proposal emphasized the cost and
burden that audit and ICFR
requirements impose on community
banks. Such commenters requested that
such burdens be shifted away from
smaller institutions and towards larger
institutions that pose more significant
risks to the banking system, particularly
with respect to the ICFR requirements.
Conversely, some commenters
objected to the proposed increase in the
independent audit requirement from
$500 million to $1 billion and the ICFR
requirement from $1 billion to $5 billion
on the basis that it could lead to
unreliable information in the
Consolidated Reports of Condition and
Income (Call Report) for those
institutions without an independent
audit requirement.
Several commenters made suggestions
regarding the effective date for the
updated thresholds. These commenters
generally advocated for a retroactive
effective date to provide immediate
burden relief for institutions with
consolidated total assets below the
updated thresholds.
A number of commenters also
suggested that the FDIC determine
whether institutions have crossed
thresholds by evaluating an institution’s
assets over a period of time, such as
over several quarters or over several
years. These commenters emphasized
that evaluating assets over a period of
time (as opposed to a single point in
time) would allow for smoother
transition runways and thereby reduce
cliff effects for institutions as they cross
asset thresholds and become subject to
additional requirements under part 363.
One commenter requested additional
guidance on how to apply updated

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thresholds to IDI subsidiaries of bank
holding companies (BHCs) with
consolidated assets over $10 billion,
where the IDI’s consolidated assets are
below that threshold. Additionally, one
commenter recommended that 12 CFR
363.3(f) be amended to remove the
requirement to comply with the
independence standards of the
Securities and Exchange Commission
(SEC) and Public Company Accounting
Oversight Board.
iv. Response to Comments on Part 363
Some commenters advocated for an
increase in the audit requirement
threshold to an amount greater than the
proposed threshold of $1 billion.
However, the $1 billion threshold
would meaningfully reduce burden for
community banks, while preserving the
objective of the underlying statute, i.e.,
ensuring early identification of needed
improvements in financial management
among institutions originally intended
to be covered by part 363, on the basis
of both the number of IDIs and portion
of total industry assets.
As noted above, increasing thresholds
as proposed would result in realigning
industry coverage with policy objectives
while providing meaningful burden
reduction for community banks. Most
notably, increasing the audit threshold
would result in approximately 780
fewer institutions being subject to audit

requirements under part 363. In terms of
burden reduction, raising the ICFR
threshold from $1 billion to $5 billion
would result in more than 700
institutions no longer having to satisfy
the ICFR requirements under part 363.
Based on the importance of
independent audits in identifying
weaknesses in internal controls for
financial reporting and the reliance on
such reporting for prudential standards
such as regulatory capital and liquidity,
the final rule does not adopt higher
thresholds than those proposed. The
FDIC and other Federal banking
agencies rely upon financial information
to evaluate the condition of IDIs, and
the independent audit requirement in
part 363 helps to ensure the accuracy
and integrity of such information.
Independent audits also help to identify
weaknesses in internal control over
financial reporting and risk management
at institutions and reinforce corrective
measures, thus complementing
supervisory efforts in contributing to the
safety and soundness of IDIs. The final
rule’s updates to the thresholds balance
burden reduction with threshold levels
that are appropriate for requiring
compliance with part 363, as they are
consistent with those used for purposes
of its initial implementation in both the
number of institutions and portion of
industry assets covered by the
regulation.

v. Final Rule
As discussed above, the FDIC has
considered the comments received on
its proposed amendments to part 363
and is finalizing the updates to these
thresholds as proposed. However, as
described in more detail in sections
III.A.8 and III.B.3.ii of this
SUPPLEMENTARY INFORMATION, the FDIC
is allowing flexibility with respect to
compliance with part 363 in certain,
specified circumstances.
The final rule updates the
applicability asset threshold in part 363
from $500 million to $1 billion and the
ICFR asset threshold from $1 billion to
$5 billion. Additionally, the final rule
increases the threshold related to
minimum audit committee requirements
for IDIs from the range of $500 million
to less than $1 billion in total assets to
the range of $1 billion to less than $5
billion in total assets, as well as the
threshold of $1 billion or more in total
assets to $5 billion or more. The final
rule also increases the threshold related
to additional audit committee
requirements from $3 billion to also $5
billion. Additionally, the final rule
updates 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.

TABLE 1—UPDATED PART 363 THRESHOLDS

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Table 1—Part 363 updated thresholds
Citation

Threshold as of January 1, 2025

363.1(a) ................................................................................
363.2(b)(3) ............................................................................
363.3(b) ................................................................................
363.4(a)(2) ............................................................................
363.4(c)(3) ............................................................................
363.5(a)(1) ............................................................................
363.5(a)(2) ............................................................................
363.5(a)(2) ............................................................................
363.5(b) ................................................................................
Guideline 8A .........................................................................
Guideline 8A .........................................................................
Guideline 10 .........................................................................
Guideline 18A .......................................................................
Guideline 27 .........................................................................
Guideline 27 .........................................................................
Guideline 27 .........................................................................
Guideline 28(b)(4) .................................................................
Guideline 30(b) .....................................................................
Guideline 30(c) .....................................................................
Guideline 30(c) .....................................................................
Guideline 35(a) .....................................................................
Guideline 35(b) .....................................................................
Guideline 35(c) .....................................................................
Appendix B item 2(b) ............................................................

$500 million ..........................................................................
1 billion .................................................................................
1 billion .................................................................................
1 billion .................................................................................
1 billion .................................................................................
1 billion .................................................................................
500 million ............................................................................
1 billion .................................................................................
3 billion .................................................................................
1 billion .................................................................................
1 billion .................................................................................
1 billion .................................................................................
1 billion .................................................................................
1 billion .................................................................................
500 million ............................................................................
1 billion .................................................................................
100 thousand ........................................................................
1 billion .................................................................................
500 million ............................................................................
1 billion .................................................................................
500 million ............................................................................
1 billion .................................................................................
3 billion .................................................................................
1 billion .................................................................................

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Updated threshold
$1 billion.
5 billion.
5 billion.
5 billion.
5 billion.
5 billion.
1 billion.
5 billion.
5 billion.
5 billion.
5 billion.
5 billion.
5 billion.
5 billion.
1 billion.
5 billion.
120 thousand.54
5 billion.
1 billion.
5 billion.
1 billion.
5 billion.
5 billion.
5 billion.

Federal Register / Vol. 90, No. 231 / Thursday, December 4, 2025 / Rules and Regulations
6. 12 CFR Part 380 (Part 380)—Orderly
Liquidation Authority

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Part 380 of the FDIC’s regulations
implements the FDIC’s orderly
liquidation authority,55 which applies
once the FDIC has been appointed
receiver for a covered financial
company.56 Similar to the provisions
regarding the sale and purchase of failed
IDI asset sales under part 340, 12 CFR
380.13 of the FDIC’s regulations sets
forth restrictions on the FDIC’s sale of
failed covered financial company assets
to individuals or entities that
improperly profited from or engaged in
wrongdoing at the expense of a covered
financial company or seriously
mismanaged a covered financial
company.57 The restrictions under 12
CFR 380.13 apply to the sale and
purchase of covered financial company
assets in the FDIC’s capacity as receiver
for a covered financial company or in its
corporate capacity.58
Among other restrictions, 12 CFR
380.13 prohibits a person from
acquiring assets of a covered financial
company from the FDIC if the person or
its associated person has caused a
substantial loss to a covered financial
company 59 or has demonstrated a
pattern or practice causing a substantial
loss to one or more covered financial
companies.60 As in part 340, 12 CFR
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.’’ 61
The FDIC added 12 CFR 380.13 to the
FDIC’s regulations in 2014.62 From
inception, the FDIC has explicitly
implemented the requirements in 12
CFR 380.13, including the ‘‘substantial
loss’’ provisions and threshold, in a
manner consistent with the restrictions
related to failed IDI asset sales under
54 As discussed above, the final rule also raises
the threshold set forth in Guideline 28(b)(4) from
$100,000 to $120,000. This threshold was intended
to align with the listing standards of national
securities exchanges for purposes of making
director independence determinations.
55 Title II of the Dodd-Frank Wall Street Reform
and Consumer Protection Act (Dodd-Frank Act)
section 201, et seq., 12 U.S.C. 5381, et seq.
56 See Dodd-Frank Act section 202(a), 12 U.S.C.
5382(a) (describing the process for the Secretary of
the Treasury to appoint the FDIC as receiver for a
covered financial company and commence orderly
liquidation of the covered financial company); see
also 12 CFR 380.1.
57 12 CFR 380.13(a)(1).
58 12 CFR 380.13(a)(2)(i).
59 12 CFR 380.13(c)(1)(i). Section 380.13 defines
material participation in a transaction that caused
substantial loss to a covered financial company in
12 CFR 380.13(c)(2).
60 12 CFR 380.13(c)(3).
61 12 CFR 380.13(b)(6).
62 79 FR 20762, 20766–20767 (Apr. 14, 2014).

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part 340.63 Previous revisions to part
340 were also specifically intended to
align the requirements in part 340 and
12 CFR 380.13.64
Under the proposal, the ‘‘substantial
loss’’ threshold in 12 CFR 380.13 would
be raised from $50,000 to $100,000 to
reflect inflation since the threshold was
adopted.65
One commenter acknowledged the
proposed update to the thresholds in
part 380 as part of a broader comment
on the general deregulatory effects of the
proposal. In consideration of the
comment received, the FDIC is adopting
the approach taken in the proposed rule,
without change.66 Updating the
threshold for ‘‘substantial loss’’ to
reflect inflation preserves the level of
the threshold in real terms and
maintains consistency between the
‘‘substantial loss’’ provisions in part 340
and 12 CFR 380.13. The FDIC expects
this update to improve competition for
sales of covered financial company
assets or the prices paid for those assets.
7. Additional Thresholds
As described above, the FDIC received
several comments advocating for the
FDIC to pursue updates and adjustments
to thresholds that were not included in
the proposal, such as those that are
statutory or do not only appear within
regulations issued only by the FDIC.
The thresholds referenced within these
comments were outside the scope of the
proposal and therefore are not being
considered as part of this final rule.
8. Effective Date of Initial Threshold
Updates
The FDIC received several comments
related to the effective date or the
applicability date of the proposal. Some
commenters requested retroactive
applicability of the rule, while others
requested immediate effectiveness. The
final rule provides for an effective date
of January 1, 2026.
With respect to part 363, the final rule
clarifies that IDIs that have prospective
filing and compliance requirements
based on thresholds in place in 2025,
63 See id. at 79 FR 20762 (explaining that the 12
CFR 380.13 final rule is modeled after the FDIC’s
regulation at 12 CFR part 340 because the relevant
statutory provisions share substantially similar
statutory language.).
64 Restrictions on Sale of Assets of a Financial
Institution by the Federal Deposit Insurance
Corporations, 80 FR 22886, 22886–22887 (Apr. 24,
2015) and 12 CFR 380.13.
65 If indexed to inflation since the FDIC
established the ‘‘substantial loss’’ threshold in 2000,
the $50,000 threshold would be $92,666. The
updated threshold of $100,000 approximates
inflation adjustments.
66 Consistent with title II of the Dodd-Frank Act,
the FDIC consulted with the Financial Stability
Oversight Council in updating this threshold.

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but will no longer be subject to such
requirements as a result of the updated
thresholds that will be in effect as of
January 1, 2026, are no longer required
to comply with such part 363
requirements.
The amendments to part 363 do not
relieve public companies or subsidiaries
of public companies of their obligation
to comply with the internal control
assessment requirements imposed by
section 404 of the Sarbanes-Oxley Act in
accordance with the effective dates for
compliance set forth in the SEC’s
implementing rules.
9. Alternatives for Threshold
Application
As described above, several
commenters suggested alternatives for
how thresholds could be applied, such
as by applying thresholds based on an
average of multiple periods or only after
crossing a threshold over consecutive
periods. For example, some commenters
suggested that thresholds should be
effective for an institution only after the
institution crosses the thresholds for
two consecutive year-end dates or that
assets should be averaged over four
consecutive quarters for purposes of
determining whether a threshold is
effective for a particular institution.
The thresholds included in the
proposal would generally apply to an
institution based on the size of the
institution at a point-in-time, rather
than over a period of time. Under the
proposal, the FDIC intended to update
the dollar amount of specific thresholds,
but not necessarily the method used to
determine whether a threshold is
effective for an individual institution,
which is set forth in the current
regulations. If a future proposal were to
update a threshold for which
applicability would be measured over a
period of time, it may be appropriate to
allow for that determination method to
continue to be in effect, inclusive of any
updates to the threshold dollar amount,
consistent with the applicable law.
Further, as it relates to part 363, section
36 of the FDI Act exempts small IDIs
based on the value of their assets ‘‘as of
the beginning of [their] fiscal year.’’ 67
The final rule adopts the proposed
point-in-time method for determining
the applicability of the thresholds
included in the rule.
Some commenters also suggested an
approach that would tailor the reference
index by threshold type, for example by
applying CPI–W to consumer-facing
monetary thresholds and nominal GDP
for asset-based thresholds. As further
discussed below, while tailoring the
67 Section

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application of a reference index by
threshold type may present the
advantages described by commenters, it
would increase complexity across
thresholds included under FDIC
regulations. The final rule promotes
consistency across FDIC regulations by
applying threshold updates and
adjustments using a single reference
index.

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B. Indexing Methodology for Future
Threshold Adjustments
Under the proposal, the FDIC would
implement an indexing methodology
that reflects inflation to make future
automatic adjustments to most
thresholds discussed above. A
discussion of the proposal, comments
received, and the final rule is provided
below.
1. Description of Proposed Methodology
Under the proposal, the FDIC would
generally adjust the dollar thresholds
described in section III.A of this
SUPPLEMENTARY INFORMATION at the end
of every consecutive two-year period
based on the cumulative percent change
of the non-seasonally adjusted CPI–W
since the effective date of the final rule.
This two-year period was intended to
provide an appropriate cadence for
capturing meaningful changes in
inflation on a timely basis while
balancing the frequency with which
thresholds are adjusted. To address the
possibility of periods of significant
inflation, the FDIC further proposed that
thresholds subject to the indexing
methodology would also be adjusted if
the cumulative percent change in the
non-seasonally adjusted CPI–W were to
exceed 8 percent during any intervening
year since the most recent adjustment.
By allowing thresholds to be adjusted
on an interim basis to reflect periods of
significant inflation, the proposal sought
to address the possibility that periods of
significant inflation may cause
thresholds to decrease substantially in
real terms before adjustments occur
under the two-year cadence.
Under the proposal, the FDIC would
not lower thresholds in any given year
to reflect periods of deflation.68
Additionally, thresholds adjusted under
the proposed indexing methodology
would be rounded based on the size of
the threshold (e.g., billions, millions,
thousands), generally, to the nearest two
significant digits, as appropriate.69 The
68 Any periods of deflation would be reflected in
future threshold increases, as threshold adjustments
in the future would be based on the positive net
cumulative change in CPI–W.
69 For example, a threshold that would otherwise
be calculated as $5.964 million would be rounded
to $6.0 million, or the nearest $0.1 million.

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proposal also provided that prior to
rounding, all adjusted thresholds would
be calculated based on the cumulative
percent change of the non-seasonally
adjusted CPI–W since the effective date
of the final rule in order to ensure that
any distortions due to rounding or nonadjustments for deflation do not carry
forward to future adjustments.
To effectuate threshold changes under
the proposal, the FDIC would announce
threshold adjustments pursuant to the
indexing methodology by publishing
subsequent final rules in the Federal
Register. Such final rules would not be
subject to notice and comment and
would amend the Code of Federal
Regulations to reflect the adjusted
numerical threshold.70 Further, while
the FDIC would intend to publish a final
rule in the Federal Register for each
adjustment, the proposal noted that
adjustments would occur even in the
absence of a publication in the Federal
Register. Under the proposal, adjusted
thresholds would be effective on April
1 of the year during which the
adjustment occurs.71
i. Comments on the Proposed
Methodology
Many commenters agreed with the
proposed indexing methodology and
supported subsequent, periodic,
automatic threshold adjustments.
Additionally, many commenters agreed
with the policy objectives to preserve
threshold levels in real terms by
periodically adjusting thresholds to
reflect inflation.
However, some commenters stated
that automatic adjustments to the
thresholds would be complex and
unpredictable and could create burden
on banks when designing,
implementing, and maintaining an
internal control framework. One
commenter suggested consideration of
broader measures of bank complexity
beyond asset size when adjusting
thresholds, such as business line and
geographic scope, and further suggested
the indexing methodology should lower
thresholds to account for deflation,
consistent with raising thresholds to
account for inflation.
70 This process to adjust numerical thresholds in
the Code of Federal Regulations is similar to the
process utilized in the Community Reinvestment
Act in which the FDIC and FRB publish a final rule
without notice and comment.
71 For example, the proposal provided that an
adjusted threshold that is calculated based on
inflation through the end of 2027 would be
published during the first quarter of 2028 and
would become effective on April 1, 2028.

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ii. Response to Comments on the
Proposed Methodology
As described in section I of this
the
proposed indexing methodology is
intended to avoid situations where an
institution becomes subject to
additional or more stringent regulatory
requirements due solely to inflation
rather than actual changes in the
institution’s size, risk profile, or level of
complexity. When developing the
proposed indexing methodology, the
FDIC sought to balance predictability of
future adjustments with the potential
burden associated with tracking and
planning for such changes. For example,
as discussed further below, adjustment
frequencies longer than the proposed
two-year cadence could lessen the
burden involved with tracking threshold
changes, as it would result in fewer
adjustments and potentially improve an
institution’s ability to plan for and
manage its regulatory compliance
obligations. However, prolonged
adjustments also increase the likelihood
that a banking organization will cross
thresholds between adjustments due to
inflation and therefore could
compromise the overarching policy
objectives of the proposal. The two-year
cadence was intended to reflect
meaningful changes in inflation while
balancing any potential burden resulting
from tracking and planning for
threshold adjustments over time.
Additionally, the proposal intended
to update and adjust the dollar amount
of specific thresholds to reflect inflation,
but not necessarily the mechanism to
determine how a threshold applies to an
individual institution, which is set forth
in the current regulations. Accordingly,
the FDIC did not consider additional
measures of complexity, such as
business line or geographic scope, to
determine threshold adjustments, which
go beyond the scope of the proposal to
reflect inflation across certain static,
dollar-based thresholds. Lastly, to avoid
increased burden for reasons unrelated
to changes in inflation-adjusted size or
risk profile, and given that periods of
deflation have been rare in modern
times, the final rule does not reduce
thresholds during periods of deflation.
However, any period of deflation would
nonetheless be reflected in future
threshold increases, as in such a
scenario thresholds would not increase
until the net cumulative change in CPI–
W turns positive. In the event that the
U.S. economy was to experience a
period of sustained deflation, the FDIC
may consider revisiting the proposed
indexing methodology.
SUPPLEMENTARY INFORMATION,

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2. Alternatives to the Proposed Indexing
Methodology
i. Alternative Measures of Indexing:
Other Price Indices
The FDIC proposed using the nonseasonally adjusted CPI–W as its
inflation measure for updating and
indexing thresholds, but also considered
the seasonally-adjusted CPI–W series as
well as other price indices such as the
Consumer Price Index for All Urban
Consumers (CPI–U), Chained CPI–U (C–
CPI–U), Producer Price Index (PPI),
Personal Consumption Expenditures
Price Index (PCEPI), and Gross Domestic
Purchases Price Index (GDPPI).
Commenters did not address the
alternative price indices to measure
inflation for purposes of the proposed
indexing methodology.
As noted in the proposal, an
advantage of using the CPI–W for
updating and indexing thresholds
within FDIC regulations is that the CPI–
W is already commonly used for this
purpose, including by the FDIC and
other Federal agencies, such as the
Social Security Administration for
calculating benefit payments,72 while
the alternatives are less frequently used
for updating regulations and may be less
familiar to the public. Additionally, as
noted in the proposal, the nonseasonally adjusted CPI–W series
reflects longer-term changes in inflation,
which supports the purpose of updating
and indexing thresholds within FDIC
regulations.

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ii. Alternative Measures of Indexing:
Gross Domestic Product (GDP)
In addition to consumer price indices,
the proposal considered use of other
types of indices to update and index the
regulatory thresholds subject to the
proposal. For example, the BEA
publishes a GDP data series on a
quarterly basis, which measures
aggregate U.S. economic activity.73
Historically, the U.S. economy has
expanded in real terms (outside of
recessions), which means the (nominal)
GDP index has typically increased at a
faster rate than the consumer price
indices discussed above.74 As discussed
in the proposal, U.S. nominal GDP has
increased by 299 percent over the past
three decades, compared to a 111
72 See § 345.12(u)(2) of appendix G to 12 CFR part
345; see also 12 CFR 1003.2(g)(1)(i); 20 CFR
404.272.
73 U.S. Bureau of Labor Statistics, Table 1.1.5.
Gross Domestic Product, line 1, available at https://
apps.bea.gov/iTable/?reqid=19&step=2&isuri=
1&categories=survey.
74 Changes in GDP (sometimes referred to as
changes in nominal GDP) can be broken down into
changes in prices inflation plus changes in real
economic output (real GDP).

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percent increase in the CPI–W over the
same period.75 Therefore, if GDP were
used as the basis for updating and
indexing thresholds within FDIC
regulations, such thresholds would
likely increase at a faster rate than under
the proposal.
Some commenters supported the use
of nominal GDP instead of CPI–W to
index thresholds. Several of these
commenters indicated that indexing
asset-based thresholds to nominal GDP
would help to ensure that asset-based
thresholds remain proportionate to the
size of the broader economy, while
another commenter added that banking
industry deposits and assets are driven
by economic activity, monetary policy,
and the money supply, and as such,
GDP is a better measure of bank
expansion than CPI–W. Some
commenters added that indexing
methodologies should be tailored to the
threshold, such as using nominal GDP
to index asset thresholds based on size
or risk-based measures and using CPI–
W or similar price indices to index
consumer-facing thresholds and other
thresholds that are less sensitive to the
impact of overall growth in the
economy. Commenters also noted that
thresholds are lower than they would
otherwise be if updated and indexed
using growth in GDP as a basis for
adjustments.
While financial activity is closely
related to broader macroeconomic
activity and tends to grow together with
the economy, using inflation as a basis
for updating and indexing thresholds
within FDIC regulations would
specifically target consumer price levels
to ensure dollar thresholds remain
relatively consistent over time in real
terms. Many commenters agreed with
the indexing methodology, as proposed,
including the use of consumer price
inflation to index thresholds across
FDIC regulations. As noted above,
adjusting thresholds based on consumer
prices is a common practice already in
use by the FDIC and other Federal
agencies. In addition, use of a single
index to adjust thresholds across FDIC
regulations would promote consistency
and reduce burden from tracking
threshold changes.
The FDIC recognizes that the banking
industry will generally grow alongside
the broader economy. However, the
final rule uses CPI–W as the basis for
indexing thresholds, consistent with the
75 Federal Reserve Bank of St. Louis, Gross
Domestic Product, available at https://
fred.stlouisfed.org/series/NA000334Q; see also,
Federal Reserve Bank of St. Louis, Consumer Price
Index for All Urban Wage Earners and Clerical
Workers: All Items in U.S. City Average, available
at https://fred.stlouisfed.org/series/CWUR0000SA0.

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proposal. As stated in the proposal,
there are several downsides to using
GDP for threshold adjustments. GDP is
subject to business cycle fluctuations
that may not always correspond with
price level changes, such as in a
‘‘stagflationary’’ environment where
stagnant economic growth occurs
simultaneously with inflation.
Relatedly, GDP in certain cases may
grow fast for a period of years, followed
by a downturn marked by slow or
negative growth. Additionally, GDP is a
lagging indicator that is frequently
revised, which may limit the accuracy
and durability of threshold adjustments.
Finally, the intent behind many rules
that use asset-based thresholds is to
target banks of a certain size, rather than
a size relative to the broader economy;
thus, if the banking industry is growing
quickly in real terms alongside a rapidly
growing economy, banks are still
growing for purposes of the relevant
regulations. The FDIC recognizes
adjusting thresholds using certain
alternative measures, such as GDP, may
produce higher threshold levels relative
to using CPI–W. However, when
evaluating various alternatives, the FDIC
primarily considered their alignment
with the overall policy objectives of the
proposal, rather than targeting a
particular threshold level.
iii. Alternative Measures of Indexing:
Other Measures
The proposal also considered and
requested comments about updating and
indexing thresholds within FDIC
regulations using measures of growth in
banking or financial sectors. Several
commenters supported use of a banking
industry growth measure to index
thresholds. One commenter stated that
use of the actual growth rate in total
banking industry assets would be a
more direct measure to index assetbased thresholds and, similarly, growth
in deposits would be logical for
thresholds tied to deposits. Another
commenter indicated growth of banking
industry assets is a more appropriate
measure to index thresholds and would
be more representative of the
commensurate risk to the DIF and
overall banking industry. Another
commenter suggested consideration of
broader measures of bank complexity
beyond asset size, such as the definition
of community banking organizations
that has been used by FDIC for other
purposes.76
76 For example, the FDIC has used a definition of
‘‘community banking organization’’ as part of
research efforts. See https://www.fdic.gov/
community-banking-research-program/communitybanking-studies.

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While using banking industry assets
as a measure may align threshold levels
with changes in the banking industry
broadly, it may also result in threshold
adjustments that are influenced by
factors unrelated to policy objectives of
particular FDIC regulations. For
example, threshold adjustments using
growth in the size of the banking
industry or financial sector may be
overly influenced by a subset of
institutions (for example, large banking
organizations) and therefore may not
always be representative of, or broadly
consistent with, changes occurring
across banks of different size ranges.
Additionally, as discussed in the
proposal, using growth in the size of the
banking industry or financial sector
would have disadvantages, including
that (1) many thresholds are intended to
apply to banks of a certain size, not
necessarily a fixed proportion of the
industry; (2) certain thresholds,
including several as part of this
proposal, are set at levels that are
unrelated to asset size; and (3) these
measures could reflect real growth and
actual changes in risk profile, as
opposed to capturing inflation alone.
Compensating for these disadvantages
by adding additional conditions to the
methodology would be relatively more
complex and less transparent to banks
and market participants compared to
using inflation as a basis for threshold
adjustments.
iv. Adjustment Frequency Within the
Indexing Methodology
As discussed above, under the
proposal, thresholds would generally be
adjusted every two years or if the
cumulative change in non-seasonally
adjusted CPI–W exceeded 8 percent
during any intervening year since the
most recent adjustment.
Some commenters preferred more
frequent indexing for certain
regulations, such as annually, while
other commenters recommended a
longer adjustment cadence, such as
every three or five years. One
commenter suggested that adjusting real
estate appraisal thresholds on an annual
basis would be commensurate with the
original appraisal thresholds and
regulatory risk tolerances that were
established by the regulators.
Commenters supporting a longer
adjustment cadence indicated that using
a two-year cadence would take
considerable regulatory resources and
add uncertainty for banks as inflation
fluctuates over time.
The proposal considered various
other adjustment frequencies, including
quarterly, semi-annually, annually,
every 3 years, and every 5 years. For

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most of the indexing options, including
for the CPI–W, an adjustment frequency
as short as monthly would be feasible
based on data availability. As noted in
the proposal, thresholds updated after a
shorter adjustment period (e.g.,
quarterly) would more frequently reflect
changes in inflation. A shorter
adjustment period would also reduce
the number of institutions that cross a
threshold between adjustments solely
based on growth consistent with
consumer prices. A disadvantage of
shorter update frequencies is that it may
require institutions to more routinely
update systems and compliance
programs to reflect more frequently
adjusted thresholds, relative to longer
adjustment frequencies. Longer
adjustment frequencies (e.g., every 3
years, every 5 years) generally have the
opposite advantages and disadvantages
as compared to the shorter adjustment
frequencies. Longer adjustment
frequencies would lessen the burden
involved with tracking threshold
changes. However, prolonged
adjustments may not sufficiently
mitigate the potential for a threshold
level to change, in real terms, during the
time period between adjustments. Such
an approach could therefore heighten
the potential for banking organizations
to cross thresholds between adjustments
solely due to inflation.
The final rule adopts a two-year
period for measuring inflation, as
proposed, which is intended to provide
an appropriate cadence for capturing
meaningful changes in inflation on a
timely basis while balancing the
frequency in which thresholds would be
amended. Additionally, by providing for
adjustments in intervening years where
inflation exceeds 8 percent, the proposal
would help mitigate the potential for
institutions to cross one or more
thresholds when inflation increases
significantly during a two-year period.
In the event thresholds were increased
in two consecutive years due to
inflation exceeding 8 percent, the
adjustment period would reset, and the
next increase would occur after two
years, unless inflation exceeded 8
percent again the following year.
The proposal also considered, but the
final rule does not adopt, an alternative
approach that would adjust thresholds
annually based on the change in
inflation only if an inflation-adjusted
threshold reaches a pre-determined
level (i.e., a milestone approach). Under
this alternative, for each regulatory
threshold, the FDIC would calculate a
potential adjusted threshold based on
CPI–W measured at the end of each year
relative to when a threshold was last
adjusted. However, a threshold would

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only be adjusted higher if the potential
adjusted threshold exceeded a certain
milestone amount.
One commenter favored the proposed
two-year cadence over the milestone
approach, while another commenter
favored the automated approach
alternative discussed in the proposal
relative to the milestone approach.
Some commenters supported the
milestone approach, stating that it
allows threshold adjustments to reflect
a material change as a result of inflation,
supports transparency, would be more
predictable for community banks, and
allows them to plan ahead for
approaching thresholds that trigger new
regulatory requirements. One of these
commenters also suggested further
exploration of the advantages and
disadvantages of the milestone
approach.
The milestone approach would
provide only for material threshold
changes and could support transparency
and predictability in future threshold
amounts as each milestone would be
known in advance. However, the
milestone approach may lead to
uncertainty in timing, as it may be
challenging for the public to track when
increases in inflation will trigger the
next milestone for each threshold.
Relative to an approach with a predetermined adjustment schedule, the
milestone approach would present
regulatory compliance planning and
management challenges associated with
tracking inflation on an ongoing basis,
as well as planning for, and managing
to, adjustments, which would likely
occur at inconsistent frequencies. By
contrast, under the final rule,
adjustments would be known ahead of
time and be made pursuant to an
established periodic cadence, which
would be expected to simplify planning
for, and management of, future
threshold adjustments.
v. Degree of Automation in Indexing
The proposal provided that the FDIC
would, every two years, publish a
Federal Register notice announcing
threshold adjustments based on a predetermined indexing methodology. The
FDIC considered an alternative that
would enhance the degree of
automation by directly incorporating the
indexing calculation into each
regulatory threshold. Under this
approach, a threshold would be defined
within regulation as a starting value
multiplied by an index value such as
the CPI–W, and the threshold would be
automatically adjusted with each update
in the index. The proposal discussed
using this same approach while
adhering to the timing in the proposal,

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in which the threshold would increase
every two years and would be rounded.
The FDIC also considered posting the
thresholds on its website and notifying
institutions and the public when they
are increased.
Some commenters supported the use
of automatic adjustments to index the
thresholds generally, though they did
not refer specifically to the direct
referencing of an index as described
above. One commenter suggested that
automatic adjustments offer
transparency and predictability,
reducing administrative burden for both
banks and regulators. Other commenters
indicated that automatic adjustments
help ensure that community banks are
not unfairly burdened by preventing
thresholds from remaining artificially
low and imposing undue burden on
banks that present low risk to the
financial system.
As described in the proposal, the
direct reference approach would have
the advantage of enhancing the
automation, which could help
contribute to a relatively more
streamlined adjustment process.
However, this approach may be less
clear for members of the public or
regulated entities. Additionally, while
the FDIC could post the thresholds on
its website, the revised threshold
amounts would not be codified in the
Code of Federal Regulations. On
balance, the approach set forth in the
proposal would provide relatively more
transparency and facilitate compliance
with the requirements included in the
proposal when compared to the direct
reference approach.
3. Final Rule—Indexing Methodology

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i. Indexing Methodology, In General
The FDIC has carefully considered all
comments received and is finalizing the
indexing methodology for future
threshold adjustments as proposed, with
a modification to the effective date of
future adjustments, as discussed in
section III.B.3.ii of this SUPPLEMENTARY
INFORMATION. Generally, the FDIC will
adjust the dollar thresholds described in
section III.A of this SUPPLEMENTARY
INFORMATION at the end of every
consecutive two-year period based on
the cumulative percent change of the
non-seasonally adjusted CPI–W since
the effective date of the final rule.
As discussed above, the FDIC
recognizes there may be certain
advantages of alternative approaches to
periodically adjust thresholds, as
described by commenters. However, the
final rule provides for a consistent and
predictable approach that specifically
targets price levels to ensure dollar

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thresholds remain relatively consistent,
in real terms, over time. The indexing
methodology included in the final rule
enhances transparency and certainty by
providing institutions with a predetermined schedule for future
threshold changes. Further, these
automatic adjustments will help
preserve thresholds’ intended scope of
application and their alignment with
intended policy objectives over time.
Accordingly, the indexing methodology
contributes to a more durable regulatory
framework while avoiding the
undesirable and unintended outcome
where the scope of applicability for a
regulatory requirement changes over
time due solely to inflation.
ii. Effective Date and Timing of Future
Adjustments
In a change from the proposal, which
provided for an April 1 effective date for
future threshold adjustments, the final
rule provides that such adjustments will
take effect on October 1. This change is
intended to align the effective date with
the start date of fiscal years for the
majority of IDIs, most of which have
fiscal years beginning on October 1 or
January 1. The final rule also includes
a provision that expressly permits an
IDI’s appropriate Federal banking
agency to exercise discretion to provide
exemptive relief to an IDI whose asset
size is likely to be below a relevant
threshold following a forthcoming
threshold adjustment that is scheduled
to occur during the IDI’s current fiscal
year.
Part 363 measures the total
consolidated assets of an IDI as of the
beginning of its fiscal year to determine
the applicability of filing and other
compliance requirements under part
363, and IDIs have adopted a variety of
dates as the start of their fiscal years. As
a result, adjusting thresholds as of any
specific date would impact IDIs
differently, depending on the start of the
IDI’s fiscal year. For example, if the rule
used January 1 as the date for threshold
adjustments, an IDI with a fiscal year
beginning on October 1 would
immediately commence or continue
certain part 363 compliance obligations
as of that date, even though the IDI may
be removed from the scope of such
requirements for future fiscal years
when the applicability threshold is
adjusted a few months later in January.
If an IDI expects to be subject to part 363
requirements as of the start of the fiscal
year, the IDI may begin work to engage
with an independent public accountant,
to establish and/or maintain an
adequate internal control structure and
procedures over financial reporting, and

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55801

to comply with audit committee
composition requirements.
The final rule adopts two
modifications to reduce the potential for
undue compliance burden resulting
from the beginning of an IDI’s fiscal year
not coinciding with the effective date of
a future threshold adjustment. First, the
final rule adopts an October 1 effective
date for future threshold adjustments to
coincide as closely as possible with the
fiscal years of the majority of IDIs.
Second, if an IDI likely will no longer
be subject to a part 363 requirement as
a result of a threshold adjustment that
is scheduled to occur during the IDI’s
current fiscal year, the final rule
includes a provision that expressly
permits the IDI’s appropriate Federal
banking agency to exercise discretion to
provide exemptive relief to the IDI.
While policy considerations related to
part 363 motivated the FDIC to change
the effective date of future part 363
adjustments, the FDIC has decided, for
simplicity, to make future adjustments
for all thresholds in this final rule
effective as of October 1 in the
applicable year.
The FDIC is also finalizing a two-year
period as the default period for future
adjustments and is selecting the CPI–W
data series as close to the adjustment
date as possible. The first future
adjustment will be effective on October
1, 2027, using the CPI–W data through
August 30, 2027, relative to the baseline.
Future adjustments after October 1,
2027, will be made as of October 1 on
a two-year cadence, with the target
threshold being calculated based on
cumulative CPI–W data through August
of the year in which the adjustment is
made, relative to the same initial
baseline.
IV. Economic Analysis
The final rule updates certain dollar
thresholds within the FDIC’s regulations
to account for the effects of inflation
since the thresholds were first
implemented or most recently amended.
It also establishes an indexing
methodology to preserve these
thresholds in real terms going forward.
To estimate the expected scope,
benefits, and costs of each amendment,
the FDIC compared projected outcomes
under the final rule to a baseline
scenario defined by the dollar
thresholds in the FDIC’s current
regulations.
A. Expected Scope of Impact
The final rule is expected to affect
IDIs of varying sizes and business
models, as well as individuals and
entities that interact with the FDIC in
applications, filings, or asset

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transactions. To assess the expected
scope, this analysis considers all
relevant regulations and financial
conditions data for all IDIs as of the
quarter ending June 30, 2025.
Specifically: 77
• Part 303 (Filing Procedures):
Applies broadly to IDIs and other
entities submitting applications or
filings to the FDIC. As of June 30, 2025,
there were 4,430 IDIs. The FDIC lacks
data on the number of non-IDI
applicants.
• Part 335 (Securities of State
Nonmember Banks and Savings
Associations): Applies to State
nonmember banks and State savings
associations with one or more classes of
securities required to be registered
under section 12 of the Exchange Act.78
As of June 30, 2025, the FDIC supervises
2,808 IDIs that could potentially fall
within the scope of this threshold
update.
• Part 340 (Restrictions on Sale of
Assets of a Failed Institution by the
Federal Deposit Insurance Corporation):
Applies to persons (both individuals
and entities) seeking to purchase assets
of failed IDIs in FDIC conservatorship or
receivership. Based on counts of

applicants may file part 380 Purchaser
Eligibility Certification (PEC380)
annually.

submissions from 2019 through 2023,
the FDIC estimates approximately 140
applicants may file part 340 Purchaser
Eligibility Certifications (PEC340)
annually.
• Part 347 (International Banking):
Subpart A to part 347 applies to insured
State nonmember banks and their
foreign branches. As of June 30, 2025,
there were 30 IDIs with foreign
subsidiaries, of which five are State
nonmember banks subject to Subpart A
to part 347.
• Part 363 (Annual Independent
Audits and Reporting Requirements):
May apply to all IDIs, but with
requirements for IDIs that hold total
consolidated assets in excess of $500
million and vary by asset size.79 As of
December 31, 2024, there were 4,496
IDIs, of which 1,802 have total
consolidated assets in excess of $500
million.
• Part 380 (Orderly Liquidation
Authority): Applies to persons seeking
to purchase assets of failed covered
financial companies in FDIC
receivership under the Orderly
Liquidation Authority. Based on counts
of submissions from 2021 through 2023,
the FDIC estimates approximately 66

B. Estimates of the Number of Directly
Affected Entities
This section provides the FDIC’s
estimates of the number of institutions
and other entities that may be directly
affected by the threshold updates under
the final rule. Table 2 summarizes the
estimated changes in covered entities
relative to current regulations. These
estimates rely on available supervisory
and application data, historical filing
volumes, and conservative assumptions.
Across all parts of the FDIC’s
regulations, the threshold updates in the
final rule are expected to reduce the
number of institutions subject to certain
compliance obligations under parts 303,
335, and 363, and increase the number
of entities eligible to engage in specific
activities under parts 340 and 380. The
largest numerical change in impacted
entities will occur under part 363,
where higher asset thresholds are
expected to reduce the applicable
regulatory requirements on several
hundred IDIs.

TABLE 2—SUMMARY OF ESTIMATED CHANGES IN THE NUMBER OF COVERED ENTITIES
Current regulations
(baseline)
FDIC Regulation or process

12 CFR §
Covered
entities

Threshold

Part 303—Filing Procedures
Part 335—Securities of State
Nonmember Banks and
Savings Associations.
Part 340—Restrictions on
Sale of Assets of a Failed
Institution by the FDIC.
Part 347—International Banking.

Part 380—Orderly Liquidation
Authority.

Threshold

Covered
entities

Net effect
on
number of
covered
entities *
(final
rule—
baseline)

§ 303.227(a)(2) & (b)(3)(i) .....
§ 335.801(d) ..........................

$2,500/$1,000 .......................
>10% of the equity capital
accounts or $5 million.

5
9

$3,500/$1,225 .......................
>10% of the equity capital
accounts or $10 million.

4/3
9

¥1/¥2
0

§ 340.2(h) ..............................

$50,000 .................................

140

$100,000 ...............................

280

140

§ 347.111(a)(1) ......................

$60 million; 25% of bank’s
Tier 1 capital.
$30 million; 5% of bank’s Tier
1 capital.
$500 million or more .............
$1 billion or more ..................
$1 billion or more ..................
$500 million or more but less
than $1 billion.
$1 billion or more ..................
More than $3 billion ..............
$100,000 ...............................
$50,000 .................................

5

$120 million ...........................

5

0

5

$60 million .............................

5

0

1,802
1,024
1,024
778

$1 billion or more ..................
$5 billion or more ..................
$5 billion or more ..................
$1 billion or more but less
than $5 billion.
$5 billion or more ..................
More than $5 billion ..............
$120,000 ...............................
$100,000 ...............................

1,024
297
297
727

¥778
¥727
¥727
¥51

297
297
1,802
132

¥727
¥123
0
66

§ 347.111(b)(1) ......................
Part 363—Annual Independent Audits and Reporting Requirements.

Updated regulations
(final rule)

§ 363.1(a) ..............................
§ 363.2(b)(3) ..........................
§ 363.3(b) ..............................
§ 363.5(a)(2) ..........................
§ 363.5(a)(1) ..........................
§ 363.5(b) ..............................
Guideline 28(a)(4) .................
§ 380.13(b)(6) ........................

1,024
420
1,802
66

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* Positive values represent an increase in the number of covered entities attributable to the updated thresholds and negative values represent a decrease in the
number of covered entities.
Source: FDIC calculations.

77 Unless otherwise specified, counts of IDIs are
taken from Reports of Condition and Income (Call
Report) data for the quarter ending June 30, 2025.
78 Section 12(b) or 12(g), 15 U.S.C. 78l(b), (g).

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79 Part 363 requires any IDI with total
consolidated assets of $500 million or more at the
beginning of its fiscal year to comply with the
requirements therein. Therefore, the FDIC uses data

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as of the quarter ending December 31, 2024, for
purposes of estimating the effects of the final rule
on IDIs subject to part 363.

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Federal Register / Vol. 90, No. 231 / Thursday, December 4, 2025 / Rules and Regulations
Part 303—Filing Procedures
Section 303.227 establishes de
minimis thresholds for covered offenses
under which a convicted person would
not be required to submit a section 19
application. The current thresholds are
$2,500 and $1,000, which the final rule
increases to $3,500 and $1,225,
respectively. From the beginning of
2023 through the first half of 2025, the
FDIC received an average of five section
19 applications annually.80 Because
applications can be submitted by both
IDIs and individuals, and detailed
attribution is unavailable, the FDIC
conservatively assumes each application
represents a unique IDI. Assuming the
number of section 19 applications
declines in proportion to the percentage
increases in the applicable thresholds—
40 percent for the general de minimis
threshold and 22.5 percent for the
small-dollar theft threshold—the
number of annual applications is
expected to decline to approximately
four and three, respectively.
Part 335—Securities of State
Nonmember Banks and Savings
Associations
Section 335.801 requires disclosure of
extensions of credit to insiders in excess
of certain thresholds. The final rule
raises the current threshold of $5
million to $10 million.81 The FDIC
identified nine IDIs 82 that are subject to
the requirements under the Exchange
Act and are therefore potentially
affected. Because data on insider
indebtedness are unavailable, the FDIC
conservatively assumes all nine IDIs
could be affected, though the actual
number may be smaller. Raising this
threshold could reduce the number of
required insider loan disclosures for
affected IDIs, although the extent of
these reductions may vary according to
each IDI’s characteristics.

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Part 340—Restrictions on Sale of Assets
of a Failed Institution by the Federal
Deposit Insurance Corporation
Section 340 restricts certain
individuals and entities from
80 Section 19 of the FDI Act was significantly
amended in December of 2022 by the Fair Hiring
in Banking Act. See Public Law 117–263, 136 Stat.
2395, 3411. In a change from the proposal, for
purposes of this estimation, the FDIC counts section
19 applications from January 1, 2023, through June
30, 2025, or approximately 2.5 years, for a more
accurate depiction of the current rate of
applications under the baseline. There were 13 total
applications over this time period. 13 applications/
2.5 years ≈ 5 section 19 applications annually.
81 The final rule does not change the parallel
threshold of 10 percent of equity capital.
82 List of FDIC-Supervised Banks Filing under the
Exchange Act, available at https://www.fdic.gov/
analysis/list-fdic-supervised-banks-filing-undersecurities-exchange-act.

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purchasing failed-bank assets if they
caused a ‘‘substantial loss’’ to an
institution. The final rule raises the
minimum threshold for ‘‘substantial
loss’’ from $50,000 to $100,000. Based
on historical annual PEC340
submissions from 2019 through 2023,
the FDIC estimates approximately 140
submissions annually under the
baseline. The volume of submissions in
future periods depends on financial and
economic conditions and the volume
and characteristics of failed bank assets,
among other conditions, all of which are
difficult to predict. For analytical
purposes, the FDIC assumes that the 100
percent increase in the threshold
corresponds to a proportional increase
in submissions as a result of the final
rule, yielding an estimate of 280 unique
entities annually. The FDIC
acknowledges uncertainty regarding the
degree to which the updated threshold
will change the volume of submissions.
Part 347—International Banking
Section 347.111 establishes maximum
thresholds for (a) aggregate underwriting
commitments and (b) the equity
securities held for distribution and
dealing by foreign organizations held by
insured State nonmember banks. The
final rule doubles the current limits of
$60 million and $30 million to $120
million and $60 million, respectively.
Based on data from the Federal
Financial Institutions Examination
Council ’s National Information Center
(NIC), the FDIC identified 30 IDIs with
foreign subsidiaries, of which five are
State nonmember banks subject to part
347. Given information gaps on business
activity, the FDIC conservatively
assumes all five banks would be
affected.
Part 363—Annual Independent Audits
and Reporting Requirements
Part 363 contains multiple dollar
value thresholds tied to an IDI’s total
consolidated assets as of the beginning
of an IDI’s most recent fiscal year 83 and
one threshold related to compensation.
Specifically, the final rule:
• Updates the general applicability
threshold from $500 million to $1
billion in total assets, removing 778 IDIs
from the scope of 12 CFR 363.1(a).
• Updates the total assets thresholds
related to ICFR assessment from $1
billion or more to $5 billion or more,
removing 727 IDIs from the scope of 12
CFR 363.2(b)(3) and 12 CFR 363.3(b).84
83 See,

e.g., 12 CFR 363.1.
12 CFR 363.2(b)(3), this threshold is
referenced in part 363, appendix A, paragraphs 8A
and 10, as well as part 363, appendix B, paragraph
2(b). For 12 CFR 363.3(b), this threshold is
84 For

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55803

• Updates the applicable thresholds
for minimum audit committee
requirements under 12 CFR 363.5(a)(2)
for IDIs between $500 million to $1
billion in total assets to IDIs between $1
billion to $5 billion, removing a net of
51 IDIs from scope; and under 12 CFR
363.5(a)(1) for IDIs between $1 billion
and $5 billion in total assets, removing
727 IDIs from scope.85
• Updates the $3 billion threshold for
additional audit committee
requirements to $5 billion, removing
123 IDIs from the scope of 12 CFR
363.5(b).86
• Updates the $100,000 compensation
threshold for independent directors
under Guideline 28(a)(4) to $120,000.87
Part 380—Orderly Liquidation
Authority
Part 380 restricts persons who
participated in a transaction that caused
a substantial loss to a covered financial
company under part 380 from acquiring
any assets of a covered financial
company under part 380. The final rule
raises the minimum threshold of a
‘‘substantial loss’’ from $50,000 to
$100,000. As previously discussed, the
FDIC would receive PECs under part
380 only if it has been appointed
receiver for a covered financial
company. Based on internal data, the
FDIC estimates 66 PEC submissions
annually under the baseline.88 The
volume of submissions in future periods
depends on financial and economic
conditions and the volume and
characteristics of failed bank assets,
among other conditions, all of which are
difficult to predict. For analytical
purposes, the FDIC assumes that the 100
percent increase in the threshold
corresponds to a proportional increase
in submissions as a result of the final
rule, yielding an estimate of 132 unique
entities annually. The FDIC
referenced in part 363, appendix A, paragraph 18A,
as well as part 363, appendix B, paragraph 2(b).
85 These thresholds are referenced in part 363,
appendix A, paragraphs 27, 30(b), 30(c), 35(a), and
35(b). The 778 IDIs currently subject to 12 CFR
363.5(a)(2) would no longer be subject to these
requirements, whereas the 727 IDIs with total assets
between $1 billion and $5 billion would now be
subject to the requirements under 12 CFR
363.5(a)(2). Therefore, the FDIC estimates 1,505 IDIs
would be affected by this change.
86 This threshold is referenced in part 363,
appendix A, paragraph 35(c).
87 The FDIC does not have the data necessary to
estimate the number of potential directors of IDI
audit committees that this update would affect.
88 The estimates of PEC submissions under part
380 are predicated upon a potential invocation of
the Orderly Liquidation Authority. Office of
Management and Budget, Information Collection
List, Covered Financial Company Asset Sales
Prospective Purchaser Eligibility Certification,
available at https://www.reginfo.gov/public/do/
PRAICList?ref_nbr=202311-3064-003.

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acknowledges uncertainty regarding the
degree to which the updated threshold
will change the volume of submissions.
Indexing Methodology
The final rule also implements an
indexing methodology that reflects
inflation to make future automatic
adjustments to most thresholds
discussed above.89 The FDIC does not
have the information necessary to
precisely estimate the number of entities
that will be affected by future
adjustments to these dollar thresholds
due to changes in inflation. However,
since the indexing methodology under
the final rule aligns these dollar
thresholds with their real values over
time, it will help ensure the number of
entities subject to the affected
regulations remains consistent with the
original policy intent.
C. Costs and Benefits of the Final Rule
The threshold updates in the final
rule are intended to help preserve
certain threshold levels in the FDIC’s
regulations in real terms to help
maintain their intended application and
policy objectives. The FDIC expects that
the overall effect will reduce
unnecessary compliance burden for
IDIs, other financial institutions, and
certain persons.
Part 303—Filing Procedures
Updating de minimis thresholds is
expected to reduce the number of
section 19 applications by an estimated
one and two annually. This would
lower compliance costs for affected IDIs
and individuals and potentially provide
more flexibility in hiring. Updating this
threshold would reduce the number of
individuals screened through the
section 19 process. The FDIC does not
have the information necessary to fully
quantify such effects but concludes that
the aggregate cost savings associated
with this change would be relatively
minor.
Part 335—Securities of State
Nonmember Banks and Savings
Associations
Updating the materiality threshold for
insider credit disclosures from $5

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89 The

dollar value threshold under 12 CFR part
363, appendix A, paragraph 28(b)(4), pertaining to
independence of management is not scheduled to
be periodically adjusted for inflation under the final
rule. This threshold was initially adopted to follow
the parallel threshold under the listing standards of
national securities exchanges. Therefore, the
revision under the final rule to increase this
threshold from $100,000 to $120,000 brings it into
alignment with these parallel thresholds. See
Nasdaq Stock Market Rules, Rule 5605(a)(2),
‘‘Definition of Independence;’’ New York Stock
Exchange Listed Company Manual, section
303A.02(b)(ii), ‘‘Independence Tests.’’

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million to $10 million would likely
reduce the number of disclosures for the
estimated nine affected IDIs. This
change would modestly reduce
compliance costs while better aligning
reporting requirements with the
threshold level related to insider
indebtedness in real terms. Although
fewer transactions would meet the
disclosure threshold, the FDIC expects
that transparency into insider
relationships of supervisory concern
would be preserved. Overall, the FDIC
views this as a modest refinement that
reduces unnecessary reporting without
diminishing oversight effectiveness.
Part 340—Restrictions on Sale of Assets
of a Failed Institution by the Federal
Deposit Insurance Corporation
Updating the minimum threshold for
‘‘substantial loss’’ from $50,000 to
$100,000 is expected to allow for more
individuals and entities to be eligible to
purchase assets from failed institutions,
increasing competition and potentially
raising bid prices. This would benefit
the DIF by improving recoveries. A
potential cost is a modest increase in the
risk of sales to less-qualified buyers, but
oversight processes remain in place to
mitigate this risk.
Part 347—International Banking
Updating underwriting and dealing
limits for foreign subsidiaries may
permit State nonmember banks to
engage in larger or more complex crossborder transactions and improve
competitiveness with foreign
institutions. These actions may then
result in additional compliance
obligations for the State nonmember
bank from foreign regulatory regimes.
However, these costs are expected to be
modest relative to the institutions’
overall operating expenses and are
likely to be one-time or short-term in
nature, reflecting transitional
adjustments rather than ongoing
burdens. Moreover, because
participation in such activities remains
discretionary and market-driven, IDIs
are likely to undertake them only when
the expected returns outweigh these
rather incremental compliance costs.
Part 363—Annual Independent Audits
and Reporting Requirements
The most substantial effects of the
final rule are associated with part 363,
where updated asset thresholds are
expected to significantly reduce the
number of IDIs subject to independent
audit and reporting requirements.
Approximately 778 IDIs with assets
between $500 million and $1 billion,
727 IDIs with assets between $1 billion
and $5 billion, and 123 IDIs with assets

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between $3 billion to $5 billion would
see reduced compliance obligations.
These changes would lower auditrelated costs and help preserve certain
threshold levels in the FDIC’s
regulations in real terms to help
maintain their intended application and
policy objectives. While fewer midsized IDIs would be subject to audit and
reporting requirements, oversight of the
largest and most complex institutions
would remain unchanged. Additionally,
to the extent that the appropriate
Federal banking agency exercises its
discretion to provide exemptive relief to
IDIs, as described above, such relief may
further attenuate compliance costs. The
FDIC does not expect these cost savings
to be outweighed by any significant
increase in the risk profile of IDIs
generally or any expected losses to the
DIF. As discussed above, the largest IDIs
would see no change in requirements.
Due to the tailored and measured
approach taken to the update of
thresholds contained in part 363, the
FDIC concludes these changes do not
significantly increase risk to the DIF.
Part 380—Orderly Liquidation
Authority
As with part 340, updating the
minimum threshold for ‘‘substantial
loss’’ under part 380 would expand
eligibility, increasing the number of
bidders for failed covered financial
company assets. This could improve
asset recovery values. A potential cost is
the inclusion of some less-qualified
buyers, though oversight mechanisms
are expected to limit this risk.
D. Overall Assessment
Across all parts of the FDIC’s
regulations, the threshold updates
provided by the final rule are expected
to reduce compliance obligations for
many smaller institutions while
expanding eligibility for certain
activities under parts 340 and 380.
Table 2 shows that the largest scope of
affected entities arises from the
amendments to part 363, where the final
rule would result in hundreds of IDIs no
longer expected to be subject to
enhanced audit and ICFR requirements.
Overall, the FDIC expects the changes to
result in reductions in regulatory
burden.
The final rule is expected to yield
positive net benefits by:
• Reducing compliance burden for
hundreds of smaller and mid-sized IDIs.
• Helping preserve threshold levels in
the FDIC’s regulations in real terms to
help maintain their intended
application and policy objectives.

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• Enhancing market participation in
asset sales, which could improve
recoveries to the DIF.
Any potential costs, such as marginal
reductions in the frequency of reporting
or supervisory review, are expected to
be limited in scope and outweighed by
the benefits of restoring and preserving
threshold levels with their intended
application.
V. Administrative Law Matters
A. Administrative Procedure Act
The Administrative Procedure Act
(APA) requires an agency to publish a
substantive rule not less than 30 days
before its effective date, except when an
agency otherwise publishes in the final
rule good cause for providing for an
earlier effective date.90 The FDIC finds
that there is good cause to dispense with
the 30-day delayed effective date
generally prescribed by the APA for this
final rule.
The final rule updates for inflation the
dollar thresholds used to determine the
applicability of certain regulatory
requirements, immediately relieving
affected institutions and individuals of
reporting and compliance burdens.
Delaying the effective date of the final
rule would impose unnecessary and
avoidable costs on regulated institutions
and affected individuals. Specifically, a
delayed effective date could force
institutions that would no longer be
subject to the revised thresholds to
unnecessarily continue expending
resources to meet requirements to which
they would no longer be subject. The
delayed effective date is both
unnecessary and contrary to the public
interest because it perpetuates costs of
regulatory compliance that serve no
prudential purposes. In addition,
immediate effectiveness will promote
clarity and certainty for affected
institutions as they plan compliance
activities for upcoming reporting and
examination cycles.
Accordingly, the FDIC finds that a
delayed effective date is both
unnecessary and contrary to the public
interest. Therefore, the final rule is
effective as of the date set forth under
the DATES heading, above.

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B. Congressional Review Act
Pursuant to the Congressional Review
Act, the Office of Budget and
Management (OMB) makes a
determination as to whether a final rule
constitutes a ‘‘major rule,’’ defined in
the Congressional Review Act as any
rule that the Administrator of the Office
of Information and Regulatory Affairs of
90 5

U.S.C. 553(d).

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the OMB finds has resulted in or is
likely to result in (A) an annual effect
on the economy of $100,000,000 or
more; (B) a major increase in costs or
prices for consumers, individual
industries, Federal, State, or local
government agencies or geographic
regions; or (C) significant adverse effects
on competition, employment,
investment, productivity, innovation, or
on the ability of United States-based
enterprises to compete with foreignbased enterprises in domestic and
export markets.91 If a rule is determined
to be a ‘‘major rule’’ by OMB, the
Congressional Review Act generally
provides that the rule may not take
effect until at least 60 days following its
publication.92 If a rule is not a ‘‘major
rule,’’ the rule may take effect after the
Federal agency submits to Congress a
report required under the Congressional
Review Act.93
OMB has determined the final rule is
not a major rule under the
Congressional Review Act. Accordingly,
the FDIC will submit the report to
Congress required by the Congressional
Review Act and proposes an effective
date for the final rule as set forth under
the DATES heading, above.
C. Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(PRA) 94 states that no agency may
conduct or sponsor, nor is the
respondent required to respond to, an
information collection unless it displays
a currently valid OMB control number.
The FDIC reviewed the final rule and
determined that it revises certain
information collection requests
previously cleared by OMB under the
following OMB Control Nos.:
1. 3064–0018: Application Pursuant to
Section 19 of the Federal Deposit
Insurance Act
2. 3064–0030: Securities of State Nonmember
Banks and State Savings Associations
3. 3064–0113: External Audits
4. 3064–0194: Covered Financial Company
Asset Purchaser Eligibility Certification

The FDIC will submit the proposed
revisions to these information
collections to OMB for review under
section 3507(d) of the PRA 95 and 5 CFR
1320.11 of the OMB’s implementing
regulations.96
91 5

U.S.C. 804(2).
U.S.C. 801(a)(3).
93 5 U.S.C. 801(a)(1).
94 44 U.S.C. 3501 through 3521.
95 44 U.S.C. 3507(d).
96 5 CFR 1320.11.
92 5

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55805

Proposed Revisions to Existing
Information Collections
Title of Information Collection:
Application Pursuant to Section 19 of
the Federal Deposit Insurance Act.
OMB Number: 3064–0018.
Affected Public: IDIs and individuals.
Current Actions: The final rule revises
the currently approved information
collection as follows:
The final rule updates the threshold
for certain offenses under which no
application to the FDIC under section 19
of the FDI Act is required. By updating
the dollar threshold for the de minimis
exception, the final rule decreases the
number of respondents required to
submit applications to the FDIC. Based
on the final rule as well as historical
data, the FDIC estimates a decrease from
43 respondents to 17 respondents,
resulting in a total annual burden for
OMB No. 3064–0018 of 272 hours, a
decrease of 416 hours.97
Title of Information Collection:
Securities of State Nonmember Banks
and State Savings Associations.
OMB Number: 3064–0030.
Affected Public: Insured State
nonmember banks and State savings
associations.
Current Actions: The final rule revises
the currently approved information
collection as follows:
The final rule updates the thresholds
for disclosure requirements for
extensions of credit to insiders from in
excess of 10 percent of the capital
account of an institution or $5 million,
whichever is less, to 10 percent of the
capital account of an institution or $10
million. Raising this threshold decreases
the total information the FDIC requests
from the affected respondents; therefore,
it is a substantive modification to the
previously approved information
collection titled ‘‘14A Proxy
Statements.’’ As such, the FDIC is
required to submit the information
collection for review and approval by
OMB.98 However, based on available
historical data, similar reporting
requirements imposed by the SEC, and
the FDIC’s supervisory experience and
expertise, the FDIC does not anticipate
a change in the burden estimates for this
information collection.
Title of Information Collection:
External Audits.
OMB Number: 3064–0113.
Affected Public: All insured financial
institutions with total assets of $1
billion or more and other insured
97 FDIC Application Pursuant to Section 19 of the
Federal Deposit Insurance Act, OMB No. 3064–
0018, available at https://www.reginfo.gov/public/
do/PRAViewICR?ref_nbr=202407-3064-005.
98 5 CFR 1320.5(g).

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financial institutions with total assets of
less than $1 billion that voluntarily
choose to comply.
Current Actions: The final rule revises
the currently approved information
collection as follows:
The final rule updates several
thresholds in part 363. It raises the
general applicability thresholds from

$500 million to $1 billion, the ICFR
asset threshold from $1 billion to $5
billion, and thresholds related to audit
committee composition generally from
$500 million to $1 billion, and from $1
billion and $3 billion to $5 billion. By
raising the thresholds in part 363, the
final rule changes several existing
information collections under OMB

Control No. 3064–0113 by changing the
number of respondents or changing the
reporting requirements. Accordingly,
the FDIC will revise the categories of the
existing information collections to better
align with proposed rule’s updated
thresholds. The updated burden
estimates and the information collection
categories are as follows:

TABLE 3—SUMMARY OF ESTIMATED ANNUAL BURDEN
[OMB No. 3064–0113]
Information Collection (IC)
(obligation to respond)

Type of burden
(frequency of response)

Number of
respondents

Number of
responses per
respondent

Average time
per response
(HH:MM)

Annual
burden
(hours)

Institutions With $10 Billion or More in Total Consolidated Assets
1.
2.
3.
4.
5.
6.
7.
8.

Annual Report, 12 CFR part 363 (Mandatory) ...................................
Annual Report, 12 CFR part 363 (Mandatory) ...................................
Audit Committee Composition, 12 CFR part 363 (Mandatory) ...........
Audit Committee Composition, 12 CFR part 363 (Mandatory) ...........
Filing of Other Reports, 12 CFR part 363 (Mandatory) ......................
Filing of Other Reports, 12 CFR part 363 (Mandatory) ......................
Notice of Change in Accountants, 12 CFR part 363 (Mandatory) .....
Notice of Change in Accountants, 12 CFR part 363 (Mandatory) .....

Recordkeeping (Annual) .....
Reporting (Annual) ..............
Recordkeeping (Annual) .....
Reporting (Annual) ..............
Recordkeeping (Annual) .....
Reporting (Annual) ..............
Recordkeeping (Annual) .....
Reporting (Annual) ..............

161
161
161
161
161
161
40
40

1
1
1
1
1
1
1
1

150:00
150:00
03:00
03:00
00:08
00:08
00:15
00:15

24,150
24,150
483
483
21
21
10
10

1
1
1
1
1
1
1
1

125:00
125:00
03:00
03:00
00:08
00:08
00:15
00:15

17,000
17,000
408
408
18
18
9
9

1
1
1
1
1
1
1
1

12:30
12:30
01:00
01:00
00:08
00:08
00:15
00:15

9,088
9,088
727
727
97
97
46
46

Institutions With $5 Billion to Less Than $10 Billion in Total Consolidated Assets
9. Annual Report, 12 CFR part 363 (Mandatory) ...................................
10. Annual Report, 12 CFR part 363 (Mandatory) .................................
11. Audit Committee Composition, 12 CFR part 363 (Mandatory) .........
12. Audit Committee Composition, 12 CFR part 363 (Mandatory) .........
13. Filing of Other Reports, 12 CFR part 363 (Mandatory) ....................
14. Filing of Other Reports, 12 CFR part 363 (Mandatory) ....................
15. Notice of Change in Accountants, 12 CFR part 363 (Mandatory) ...
16. Notice of Change in Accountants, 12 CFR part 363 (Mandatory) ...

Recordkeeping (Annual) .....
Reporting (Annual) ..............
Recordkeeping (Annual) .....
Reporting (Annual) ..............
Recordkeeping (Annual) .....
Reporting (Annual) ..............
Recordkeeping (Annual) .....
Reporting (Annual) ..............

136
136
136
136
136
136
34
34

Institutions With $1 Billion to Less Than $5 Billion in Total Consolidated Assets
17.
18.
19.
20.
21.
22.
23.
24.

Annual Report, 12 CFR part 363 (Mandatory) .................................
Annual Report, 12 CFR part 363 (Mandatory) .................................
Audit Committee Composition, 12 CFR part 363 (Mandatory) .........
Audit Committee Composition, 12 CFR part 363 (Mandatory) .........
Filing of Other Reports, 12 CFR part 363 (Mandatory) ....................
Filing of Other Reports, 12 CFR part 363 (Mandatory) ....................
Notice of Change in Accountants, 12 CFR part 363 (Mandatory) ...
Notice of Change in Accountants, 12 CFR part 363 (Mandatory) ...

Recordkeeping (Annual) .....
Reporting (Annual) ..............
Recordkeeping (Annual) .....
Reporting (Annual) ..............
Recordkeeping (Annual) .....
Reporting (Annual) ..............
Recordkeeping (Annual) .....
Reporting (Annual) ..............

727
727
727
727
727
727
182
182

Institutions With Less Than $1 Billion of Total Consolidated Assets
25. Filing of Other Reports, 12 CFR part 363 (Voluntary) ......................
26. Filing of Other Reports, 12 CFR part 363 (Voluntary) ......................

Recordkeeping (Annual) .....
Reporting (Annual) ..............

3,472
3,472

1
2

00:15
00:15

868
1,736

Total Annual Burden (Hours) ...........................................................

.............................................

......................

..........................

........................

106,718

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Source: FDIC.
Note: The estimated annual IC time burden is the product, rounded to the nearest hour, of the estimated annual number of responses and the estimated time per
response for a given IC. The estimated annual number of responses is the product, rounded to the nearest whole number, of the estimated annual number of respondents and the estimated annual number of responses per respondent. This methodology ensures the estimated annual burdens in the table are consistent with
the values recorded in OMB’s consolidated information system.

Based on the final rule, the FDIC
estimates a total annual burden for OMB
Control No. 3064–0113 of 106,718
hours, resulting in a burden decrease of
31,496 hours from the most recent PRA
renewal.99
Title of Information Collection:
Covered Financial Company Asset Sales
Purchaser Eligibility Certification.
OMB Number: 3064–0194.
Affected Public: Any individual or
entity that is a potential purchaser of
99 FDIC External Audits, OMB No. 3064–0113,
available at https://www.reginfo.gov/public/do/
PRAViewICR?ref_nbr=202207-3064-004.

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assets from (1) the FDIC as receiver for
a Covered Financial Company (CFC); or
(2) a bridge financial company (BFC)
that requires the approval of the FDIC,
as receiver for the predecessor CFC and
as the sole shareholder of the BFC (e.g.,
the BFC’s sale of a significant business
line).
Current Actions: The final rule
updates the currently approved
information collection as follows:
The final rule updates the
‘‘substantial loss’’ threshold in 12 CFR
380.13 by raising the existing threshold
from $50,000 to $100,000. Raising this
threshold decreases the total

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information the FDIC requests from the
affected respondents; therefore, it is a
substantive modification to the
previously approved information
collection titled ‘‘Covered Financial
Company Asset Sales Purchaser
Eligibility Certification.’’ 100 As such,
the FDIC is required to submit the
information collection for review and
approval by OMB.101 The FDIC does not
anticipate a change in the burden
100 FDIC Covered Financial Company Asset
Purchaser Eligibility Certification, OMB No. 3064–
0194, available at https://www.reginfo.gov/public/
do/PRAViewICR?ref_nbr=202311-3064-003.
101 44 U.S.C. 3507(d).

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Federal Register / Vol. 90, No. 231 / Thursday, December 4, 2025 / Rules and Regulations
estimates for this information collection.
This determination is based on the FDIC
supervisory experience and analysis of
prospective respondents.
D. Regulatory Flexibility Act Analysis
The Regulatory Flexibility Act (RFA)
generally requires that an agency, in
connection with a final rule, to prepare
and make available for public comment
a final regulatory flexibility analysis that
describes the impact of the final rule on
small entities.102 However, a final
regulatory flexibility analysis is not
required if the agency certifies that the
final rule will not, if promulgated, have
a significant economic impact on a
substantial number of small entities.
The Small Business Administration
(SBA) has defined ‘‘small entities’’ to
include banking organizations with total
assets of less than or equal to $850
million.103 Generally, the FDIC
considers a significant economic impact
to be a quantified effect in excess of 5
percent of total annual salaries and
benefits or 2.5 percent of total
noninterest expenses. The FDIC
concludes that effects in excess of one
or more of these thresholds typically
represent significant economic impacts
for IDIs.
To evaluate the impact of this final
rule on small entities, this analysis
considers all relevant regulations and
guidance applicable to these
institutions, together with financial data
for all IDIs as of the quarter ending June
30, 2025.
Part 303—Filing Procedures
Section 303.227 establishes criteria
for de minimis exemptions under
section 19 of the FDI Act, including
thresholds of $2,500 and $1,000 for
certain offenses exempt from the
requirement to submit a section 19
application to the FDIC. As previously
discussed, the final rule updates these
thresholds to $3,500 and $1,225,
respectively.
To estimate potential effects, the FDIC
reviewed the number of section 19
applications received over the period
from the beginning of 2023 through June
30, 2025. The FDIC received 13
applications (an average of five
annually) submitted by individuals or
102 5

U.S.C. 601 et seq.
SBA defines a small banking organization
as having $850 million or less in assets and
determines an organization’s assets by averaging the
assets reported on its four quarterly financial
statements for the preceding year. See 13 CFR
121.201 (as amended by 87 FR 69118, effective
December 19, 2022). Following these regulations,
the FDIC uses an IDI’s affiliated and acquired assets,
averaged over the preceding four quarters, to
determine whether the IDI is ‘‘small’’ for the
purposes of the RFA.

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103 The

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IDIs.104 As discussed in the Economic
Analysis section (section IV of this
SUPPLEMENTARY INFORMATION), the FDIC
assumes that each application is
submitted by a unique IDI, which serves
as a conservative estimate of the number
of potentially affected entities.
For the purposes of this analysis the
FDIC assumes the number of section 19
applications declines in proportion to
the percentage increases in the
applicable thresholds. As previously
discussed, the final rule increases the de
minimis threshold by 40 percent;
therefore, the FDIC estimates that this
aspect of the final rule reduces annual
section 19 applications by two, to three.
Further, the final rule increases the
small-dollar theft threshold by 22.5
percent; therefore, the FDIC estimates
that this aspect of the final rule reduces
annual section 19 application by one, to
four.105 The FDIC does not have the
information necessary to determine the
degree to which the changes to the two
de minimis exemption criteria may
interact. Based on Call Report data from
June 30, 2025, approximately 70 percent
of all IDIs are considered small entities
for the purposes of the RFA.106
Accordingly, the FDIC estimates that up
to two small IDIs would no longer need
to submit a section 19 application under
the final rule.107 Based on an estimated
16 hours per application for compliance
activities under section 19 108 and a
wage rate of $103.70/hour,109 the FDIC
104 Section 19 of the FDI Act was significantly
amended in December of 2022 by the Fair Hiring
in Banking Act. See Public Law 117–263, 136 Stat.
2395, 3411. For purposes of this estimation, the
FDIC counts section 19 applications from January
1, 2023 through June 30, 2025, or approximately 2.5
years, for a more accurate depiction of the current
rate of applications under the baseline. There were
13 total applications over this time period. 13
applications/2.5 years ≈ 5 section 19 applications
annually.
105 For the general de minimis threshold: 5
estimated annual section 19 applications × (1¥0.4,
or 40%) = 3 section 19 applications. For the smalldollar theft threshold: 5 estimated annual section 19
applications × (1¥0.225, or 22.5%) = 3.875, or
approximately 4, section 19 applications.
106 FDIC Call Report Data, June 30, 2025.
107 Five section 19 applications from unique IDIs
× 70 percent of all IDIs classified as small ≈ four
small IDIs. A 22.5-percent reduction, corresponding
to an increase in the de minimis small-dollar theft
threshold from $1,000 to $1,225, would result in
three small IDIs estimated under the final rule. A
40-percent reduction, corresponding to an increase
in the general de minimis exemption threshold from
$2,500 to $3,500, would result in two small IDIs
estimated under the final rule.
108 Information collection request ICR 3064–0018
at https://www.reginfo.gov/public/do/
PRAViewICR?ref_nbr=202407-3064-005.
109 Bureau of Labor Statistics: National IndustrySpecific Occupational Employment and Wage
Estimates: Industry: Credit Intermediation and
Related Activities (5221 and 5223 only) (May 2024),
Employer Cost of Employee Compensation (March
2024), and Employment Cost Index (March 2024

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55807

estimates total annual cost savings of
approximately $3,318.40 across the
affected institutions, or approximately
$1,659.20 per small IDI.110 Given the
limited number of affected entities and
relatively modest cost savings, the FDIC
concludes that these updates do not
have a significant economic impact on
small IDIs.
Part 335—Securities of State
Nonmember Banks and Savings
Associations
Section 335.801 establishes a
threshold for disclosures related to
extensions of credit to insiders. As
previously discussed, the final rule
updates the dollar-based threshold from
$5 million to $10 million.
The FDIC identified nine FDICsupervised IDIs 111 subject to the
disclosure requirements under the
Exchange Act. Of these, one is classified
as a small entity for the purposes of the
RFA. While the FDIC does not have the
information necessary to estimate the
change in how many loans to insiders
will be reported under the final rule, it
finds that the final rule does not have
a substantive impact on small FDICsupervised IDIs because (1) this specific
disclosure is just one component of a
much larger disclosure—proxy
statements—which is otherwise entirely
unaffected by the final rule; and (2) it
only affects one FDIC-supervised IDI.
Part 340—Restrictions on Sale of Assets
of a Failed Institution by the Federal
Deposit Insurance Corporation
Section 340 relates to restrictions on
the sale of failed bank assets to certain
persons that have caused a ‘‘substantial
loss’’ to an institution. ‘‘Substantial
loss’’ is currently defined as greater than
$50,000 in losses, unpaid final
judgments, delinquent obligations, or
deficiency balance following a
foreclosure. As previously discussed,
the final rule updates this threshold to
greater than $100,000.
Based on historical annual PEC340
submissions from 2019 through 2023,
the FDIC receives approximately 140
submissions annually. As discussed in
and June 2025). For this ICR, the FDIC estimated the
following labor allocation for entities complying
with these requirements: Executives and Managers
(11–0000): 10 percent; Lawyers (23–0000): 20
percent; Compliance Officers (13–1040): 60 percent;
and Clerical Workers (43–0000): 10 percent.
110 Estimated 16 hours per section 19 application
× $103.70/hour wage rate = Estimated $1,659.20 per
application. The FDIC estimates 1 and 2 small
entities annually will incur receive cost savings
from the final rule’s changes to part 303. 1 small
entity × $1,659.20 = $1,659.20. 2 small entities ×
$1,659.20 = $3,318.40.
111 See https://www.fdic.gov/analysis/list-fdicsupervised-banks-filing-under-securities-exchangeact for the list of IDIs.

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the Economic Analysis section (section
IV of this SUPPLEMENTARY INFORMATION),
70 percent of all IDIs are considered
small for the purposes of the RFA.112
Therefore, assuming each is submitted
by a unique entity, the FDIC estimates
that approximately 98 PEC340s are
submitted by small entities.113
The FDIC estimates that an entity will
incur 30 minutes of labor to submit a
PEC340 to the FDIC.114 Employing a
wage rate of $163.50/hour,115 the FDIC
estimates total annual costs of
approximately $8,011.50 across the
affected institutions, or approximately
$81.75 per small IDI.116 The FDIC
concludes that the final rule does not
have a substantive impact on small IDIs
because the final rule affects a relatively
small number small IDIs—just over
three percent of all small IDIs.117
Part 347—International Banking
Section 347.111 contains two relevant
thresholds applicable to foreign
organizations held by uninsured State
nonmember banks: the aggregate
underwriting commitment limit of $60
million and the distribution and dealing
limit of $30 million. As previously
discussed, the final rule updates both
thresholds to $120 million and $60
million, respectively.
Based on data from the NIC, the FDIC
identified five State nonmember banks
with foreign subsidiaries subject to
these provisions, none of which are
classified as small for the purposes of
the RFA.118 Consequently, the FDIC
finds that these updates do not affect
any small FDIC-supervised IDIs.
Part 363—Annual Independent Audits
and Reporting Requirements
As previously discussed, the final rule
updates several dollar thresholds under
112 FDIC

Call Report Data, June 30, 2025.
estimated PEC340 submissions by IDIs ×
70 percent = 98 ‘‘small’’ IDIs.
114 Information collection request ICR 3064–0135
at https://www.reginfo.gov/public/do/
PRAViewICR?ref_nbr=202111-3064-002.
115 Bureau of Labor Statistics: National IndustrySpecific Occupational Employment and Wage
Estimates: Industry: Credit Intermediation and
Related Activities (5221 and 5223 only) (May 2024),
Employer Cost of Employee Compensation (March
2024), and Employment Cost Index (March 2024
and June 2025). For this ICR, the FDIC estimated the
following labor allocation for entities complying
with these requirements: Executives and Managers
(11–0000): 10 percent; and Purchasing Managers
(11–3060): 90 percent.
116 Estimated 98 small IDIs submitting PEC340s ×
30 minutes per PEC340 submission = 49 hours. 49
× $163.50 = $8,011.50 in total annual costs.
$8,011.50/98 small IDIs = $81.75 per small IDI.
117 FDIC Call Report Data, June 30, 2025. 98
estimated small IDIs submitting PEC340s/3,092
‘‘small’’ IDIs ≈ 3.17 percent of small IDIs.
118 Federal Reserve National Information Center
data as of June 30, 2025. See https://www.ffiec.gov/
npw/ for more information.

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part 363.119 Among these, the most
relevant for small entities are the
updates in the asset-size threshold from
$500 million to $1 billion for: Annual
audit requirements under 12 CFR
363.1(a), and audit committee
requirements under 12 CFR 363.5(a)(2).
As of December 31, 2024, 556 small
IDIs report between $500 million and $1
billion in assets. These institutions
would no longer be subject to the
requirements under part 363. Based on
estimates of 28 hours per year for
compliance activities under part 363 120
and a wage rate of $99.49 per hour,121
the FDIC estimates annual cost savings
of approximately $1.55 million across
affected institutions, or approximately
$2,800 per small IDI.122 The FDIC finds
these updates to the thresholds do not
have a significant effect on small IDIs.
Part 380—Orderly Liquidation
Authority
Part 380 defines ‘‘substantial loss’’ for
restrictions on the sale of failed
financial company assets. As previously
discussed, the final rule updates this
threshold from $50,000 to $100,000.
Based on PEC380 submissions, the
FDIC estimates approximately 66
submissions annually. Assuming each is
submitted by a unique entity and using
the FDIC’s previous estimate that 70
percent of all IDIs are small,123 the FDIC
estimates that approximately 46
PEC380s are submitted by small IDIs.124
The FDIC estimates that an entity will
incur 2.5 hours of labor to submit a
PEC380 to the FDIC.125 Employing a
119 Part 363 requires any IDI with total
consolidated assets of $500 million or more at the
beginning of its fiscal year to comply with the
requirements therein. Therefore, the FDIC uses data
as of the quarter ending December 31, 2024, for
purposes of estimating the effects of the final rule
on small IDIs subject to part 363.
120 Information collection request ICR 3064–0113
at https://www.reginfo.gov/public/do/
PRAViewICR?ref_nbr=202207-3064-004.
121 Bureau of Labor Statistics: National IndustrySpecific Occupational Employment and Wage
Estimates: Industry: Credit Intermediation and
Related Activities (5221 and 5223 only) (May 2024),
Employer Cost of Employee Compensation (March
2024), and Employment Cost Index (March 2024
and June 2025). See Table 2 of the FDIC’s
Supporting Statement at https://www.reginfo.gov/
public/do/PRAViewDocument?ref_nbr=2022073064-004 for information on the labor allocations
for this ICR.
122 556 small IDIs × 28 hours in cost savings =
15,568 hours in annual compliance cost savings.
15,568 hours × $99.48 per hour = $1,548,704.64, or
approximately $1.55 million. $1.55 million/556
small IDIs = $2,787.77, or approximately $2,800.
123 FDIC Call Report Data, June 30, 2025.
124 66 estimated PEC380 submissions by IDIs × 70
percent = 46.2, or approximately 46 ‘‘small’’ IDIs.
125 Information collection request ICR 3064–0194
at https://www.reginfo.gov/public/do/
PRAViewICR?ref_nbr=202311-3064-003.

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wage rate of $111.94 per hour,126 the
FDIC estimates total annual costs of
approximately $12,873.10 across the
affected institutions, or approximately
$279.85 per small IDI.127 The FDIC
concludes that the final rule does not
have a substantive impact on small IDIs
because the final rule only affects about
one and a half percent of all small
IDIs.128
Summary of Effects on Small Entities
As of the quarter ending June 30,
2025, the FDIC insured 4,430
institutions, of which 3,092 are
considered small for the purposes of the
RFA. As of the same period the FDIC
supervised 2,808 institutions, 2,085 are
classified as small.129 The FDIC
estimates that the final rule’s threshold
updates in parts 303, 340, 363, and 380
will affect a limited subset of small
entities, resulting in minor compliance
cost savings or modest incremental
costs, not to exceed $2,800, with parts
347 and 335 impacting zero to one small
IDIs.130
Even assuming each small IDI was
simultaneously affected by all
applicable provisions, the estimated
cumulative annual cost change,
approximately $4,097.60 per
institution,131 would not exceed five
percent of total annual salaries and
benefits or 2.5 percent of total
noninterest expenses for the vast
majority of small IDIs.132
126 Bureau of Labor Statistics: National IndustrySpecific Occupational Employment and Wage
Estimates: Industry: Credit Intermediation and
Related Activities (5221 and 5223 only) (May 2024),
Employer Cost of Employee Compensation (March
2024), and Employment Cost Index (March 2024
and June 2025). For this ICR, the FDIC estimated the
following labor allocation for entities complying
with these requirements: Executives and Managers
(11–0000): 10 percent; Lawyers (23–0000): 10
percent; Compliance Officers (13–1040): 10 percent;
and Financial Analysts (13–2051): 70 percent.
127 Estimated 46 small IDIs submitting PEC380s ×
2.5 hours per PEC380 submission = 115 hours. 115
× $111.94 = $12,873.10 in total annual costs.
$12,873.10/46 small IDIs = $279.85 per small IDI.
128 FDIC Call Report Data, June 30, 2025. 46
estimated small IDIs submitting PEC380s/3,092
‘‘small’’ IDIs ≈ 1.49 percent of small IDIs.
129 FDIC Call Report Data, June 30, 2025.
130 Certain aspects of the final rule, such as those
pertaining to section 19 and PEC submissions under
parts 303, 340, and 380, may affect individuals. The
RFA applies to a small entity, which is defined in
5 U.S.C. 601(6) as having ‘‘the same meaning as the
terms ‘small business’, ‘small organization’ and
‘small governmental jurisdiction’ defined in
paragraphs (3), (4) and (5) of’’ 5 U.S.C. 601. As such,
a rule or information collection that affects only
natural persons does not affect any small entities.
131 Approximately $4,459.20 in estimated annual
cost savings (parts 303 and 363)¥$361.60 in
estimated annual costs (parts 340 and 380) =
$4,097.60.
132 The estimated cumulative annual cost change
would exceed one of these two thresholds at just
three of the 3,092 ‘‘small’’ IDIs identified by the
FDIC.

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Federal Register / Vol. 90, No. 231 / Thursday, December 4, 2025 / Rules and Regulations
12866. For more information on the
analysis conducted in connection with
Executive Order 12866, refer to other
sections of this SUPPLEMENTARY
INFORMATION.

Accordingly, the FDIC certifies that
this final rule does not have a
significant economic impact on a
substantial number of small entities
and, therefore, a final regulatory
flexibility analysis is not required.

H. Executive Order 14192

E. Plain Language
Section 722 of the Gramm-LeachBliley Act requires Federal banking
agencies to use plain language in all
proposed and final rules published after
January 1, 2000. The FDIC invited
comments regarding the use of plain
language but did not receive any
relevant comments. The FDIC sought to
clearly state the provisions of the rule in
a simple and straightforward manner,
using plain language as much as
possible.

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F. Riegle Community Development and
Regulatory Improvement Act of 1994
Section 302 of the Riegle Community
Development and Regulatory
Improvement Act of 1994 (RCDRIA)
requires that the Federal banking
agencies, including the FDIC, in
determining the effective date and
administrative compliance requirements
of new regulations that impose
additional reporting, disclosure, or other
requirements on IDIs, consider,
consistent with principles of safety and
soundness and the public interest, any
administrative burdens that such
regulations would place on depository
institutions, including small depository
institutions, and customers of
depository institutions, as well as the
benefit of such regulations. New
regulations and amendments to
regulations prescribed by a Federal
banking agency that impose additional
reporting, disclosure, or other new
requirements on IDI shall take effect on
the first day of a calendar quarter that
begins on or after the date on which the
regulations are published in final form,
with certain exceptions, including for
good cause.
The final rule does not impose
additional reporting, disclosure, or other
new requirements on IDIs. As such, the
provisions of RCDRIA do not apply to
the FDIC’s determination of the final
rule’s effective date.
G. Executive Orders 12866 and 13563
Under Executive Order 12866, as
affirmed and supplemented by
Executive Order 13563, ‘‘significant
regulatory actions’’ are subject to review
by OMB.
The FDIC has submitted this
regulatory action to OMB for review.
OMB has determined the rule is not a
significant regulatory action as defined
by section 3(f) of Executive Order

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Executive Order 14192 directs
agencies, unless prohibited by law, to
identify at least 10 existing regulations
to be repealed when the agency publicly
proposes for notice and comment or
otherwise promulgates a new regulation
with total costs greater than zero.
Executive Order 14192 further requires
that new incremental costs associated
with new regulations shall, to the extent
permitted by law, be offset by the
elimination of existing costs associated
with at least 10 prior regulations. An
Executive Order 14192 deregulatory
action is an action that has been
finalized and has total costs less than
zero. This final rule is considered an
Executive Order 14192 deregulatory
action.
List of Subjects
12 CFR Part 303
Administrative practice and
procedure, Bank deposit insurance,
Banks, banking, Reporting and
recordkeeping requirements, Savings
associations.
12 CFR Part 314
Accounting, Administrative practice
and procedure, Authority delegations
(Government agencies), Bank deposit
insurance, Banks, banking, Brokers,
Confidential business information,
Credit, Foreign banking, Holding
companies, Insurance, Investments,
Reporting and recordkeeping
requirements, Savings associations,
Securities, Trusts and trustees.
12 CFR Part 335
Accounting, Banks, banking,
Confidential business information,
Reporting and recordkeeping
requirements, Securities.
12 CFR Part 340
Banks, banking, Reporting and
recordkeeping requirements.
12 CFR Part 347
Authority delegations (Government
agencies), Bank deposit insurance,
Banks, banking, Credit, Foreign banking,
Investments, Reporting and
recordkeeping requirements, U.S.
investments abroad.
12 CFR Part 363
Accounting, Administrative practice
and procedure, Banks, banking,

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55809

Reporting and recordkeeping
requirements.
12 CFR Part 380
Brokers, Holding companies,
Insurance, Investments, Trusts and
trustees.
Authority and Issuance
For the reasons set forth in the
preamble, the Board of Directors of the
Federal Deposit Insurance Corporation
amends 12 CFR chapter III as follows:
PART 303—FILING PROCEDURES
1. The authority citation for part 303
continues to read as follows:

■

Authority: 12 U.S.C. 378, 1464, 1813, 1815,
1817, 1818, 1819(a) (Seventh and Tenth),
1820, 1823, 1828, 1829, 1831a, 1831e, 1831o,
1831p–1, 1831w, 1835a, 1843(l), 3104, 3105,
3108, 3207, 5414, 5415, and 15 U.S.C. 1601–
1607.
§ 303.227

[Amended]

2. Amend § 303.227 by:
a. In paragraph (a)(2), removing
‘‘$2,500’’ and adding in its place
‘‘$3,500, as adjusted from time to time
in accordance with 12 CFR 314.1,’’.
■ b. In paragraph (b)(3)(i), removing
‘‘$1,000’’ and adding in its place
‘‘$1,225, as adjusted from time to time
in accordance with 12 CFR 314.1,’’.
■ 3. Add part 314 to read as follows:
■
■

PART 314—INDEXING OF SPECIFIED
REGULATORY THRESHOLDS
Sec.
314.1
314.2

Threshold indexing.
[Reserved]

Authority: 12 U.S.C. 378, 1464, 1813,
1815, 1817, 1818, 1819, 1819(a) (Seventh and
Tenth), 1820, 1821(p), 1823, 1828, 1829,
1831a, 1831e, 1831m, 1831o, 1831p–1,
1831w, 1835a, 1843(l), 3103, 3104, 3105,
3108, 3109, 3207, 5385(h), 5389, 5390(s)(3),
5390(b)(1)(C), 5390(a)(7)(D), 5381(b), 5390(r),
5390(a)(16)(D), 5414, 5415, and 15 U.S.C.
78j–1, 78l(i), 78m, 78n, 78p, 78w, U.S.C.
1601–1607, 5412, 5414, 5415, 7241, 7242,
7243, 7244, 7261, 7262, 7264, and 7265; Pub
L. No. 111–203, section 939A, 124 Stat. 1376,
1887 (July 21, 2010) (codified 15 U.S.C. 78o–
7 note).
§ 314.1

Threshold indexing.

(a) Methodology. The dollar
thresholds specified in paragraph (c) of
this section shall be adjusted by
multiplying the baseline threshold
values specified in paragraph (c) of this
section by one plus the cumulative
percent change in the non-seasonally
adjusted Consumer Price Index for
Urban Wage Earners and Clerical
Workers, measured from the effective
date of this rule, as further described in
paragraph (b) of this section, and shall

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Federal Register / Vol. 90, No. 231 / Thursday, December 4, 2025 / Rules and Regulations

be rounded in accordance with
paragraph (d) of this section.
(b) Frequency—(1) In general—
biennial adjustments. Except as
otherwise provided in paragraph (b)(2),
(b)(3), or (b)(4) of this section, the
adjustments described in paragraph (a)
of this section shall be effective on
October 1 following each consecutive
two-year period ending August 30, and
using the non-seasonally adjusted
Consumer Price Index for Urban Wage
Earners and Clerical Workers as of
August 30 of that year.
(2) 2027 adjustment. The first
adjustment described in paragraph (a) of
this section, which shall be effective on
October 1, 2027, shall be made using
one plus the cumulative percent change
in the non-seasonally adjusted
Consumer Price Index for Urban Wage
Earners and Clerical Workers through
August 30, 2027.
(3) Periods of high inflation—annual
adjustments. If the cumulative percent
change of the non-seasonally adjusted
Consumer Price Index for Urban Wage
Earners and Clerical Workers, measured
over the 12-month period ending
August 30 following the year in which
the most recent adjustment was made
exceeds 8 percent, then the dollar
thresholds shall be adjusted in
accordance with paragraph (a) of this
section using the cumulative percent
change of the non-seasonally adjusted
Consumer Price Index for Urban Wage
Earners and Clerical Workers, measured
over the 12-month period ending
August 30 with an effective date of
October 1 following the year in which
the most recent adjustment was made.
(4) Periods of negative inflation—no
adjustments. Notwithstanding
paragraph (b)(1) or (b)(2) of this section,
if an adjustment of dollar thresholds
using the cumulative percent change of
the non-seasonally adjusted Consumer
Price Index for Urban Wage Earners and
Clerical Workers from the effective date
of this rule or the most recent
adjustment, as applicable, would not
result in an increase from the current
dollar thresholds, no adjustment will be
made pursuant to paragraph (a) of this
section.
(c) Specified thresholds. The
thresholds in the following sections
shall be adjusted in accordance with
paragraph (a) of this section relative to
the baseline threshold values as of
January 1, 2026, specified in paragraphs
(c)(1) through (31) of this section:
(1) Section 303.227(a)(2) of this
chapter, baseline threshold value
$3,500;
(2) Section 303.227(b)(3)(i) of this
chapter, baseline threshold value
$1,225;

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(3) Section 335.801(d) of this chapter,
baseline threshold value $10,000,000;
(4) Section 340.2(h)(1) of this chapter,
baseline threshold value $100,000;
(5) Section 340.2(h)(2) of this chapter,
baseline threshold value $100,000;
(6) Section 340.2(h)(3) of this chapter,
baseline threshold value $100,000;
(7) Section 340.2(h)(4) of this chapter,
baseline threshold value $100,000;
(8) Section 347.111(a)(1) of this
chapter, baseline threshold value
$120,000,000;
(9) Section 347.111(b)(1) of this
chapter, baseline threshold value
$60,000,000;
(10) Section 363.1(a) of this chapter,
baseline threshold value
$1,000,000,000;
(11) Section 363.2(b)(3) of this
chapter, baseline threshold value
$5,000,000,000;
(12) Section 363.3(b) of this chapter,
baseline threshold value
$5,000,000,000;
(13) Section 363.4(a)(2) of this
chapter, baseline threshold value
$5,000,000,000;
(14) Section 363.4(c)(3) of this
chapter, baseline threshold value
$5,000,000,000;
(15) Section 363.5(a)(1) of this
chapter, baseline threshold value
$5,000,000,000;
(16) Both thresholds in § 363.5(a)(2) of
this chapter, baseline threshold values
of $1,000,000,000 or more but less than
$5,000,000,000;
(17) Section 363.5(b) of this chapter,
baseline threshold value
$5,000,000,000;
(18) Both thresholds in paragraph
(8)(A) of appendix A of part 363 of this
chapter, baseline threshold value
$5,000,000,000;
(19) Paragraph (10) of appendix A of
part 363 of this chapter, baseline
threshold value $5,000,000,000;
(20) Paragraph (18)A of appendix A of
part 363 of this chapter, baseline
threshold value $5,000,000,000;
(21) All three thresholds in paragraph
(27) of appendix A of part 363 of this
chapter, with the first baseline threshold
value being $5,000,000,000 or more and
the second and third baseline threshold
values being $1,000,000,000 or more but
less than $5,000,000;
(22) Paragraph (30)(b) of appendix A
of part 363 of this chapter, baseline
threshold value $5,000,000,000;
(23) Both thresholds in paragraph
(30)(c) of appendix A of part 363 of this
chapter, baseline threshold value
$1,000,000,000 or more but less than
$5,000,000,000;
(24) Paragraph (35)(a) of appendix A
of part 363 of this chapter, baseline
threshold value $1,000,000,000;

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(25) Paragraph (35)(b) of appendix A
of part 363 of this chapter, baseline
threshold value $5,000,000,000;
(26) Paragraph (35)(c) of appendix A
of part 363 of this chapter, baseline
threshold value $5,000,000,000;
(27) Paragraph 2(b) of appendix B of
part 363 of this chapter, baseline
threshold value $5,000,000,000;
(28) Section 380.13(b)(6)(i) of this
chapter, baseline threshold value
$100,000;
(29) Section 380.13(b)(6)(ii) of this
chapter, baseline threshold value
$100,000;
(30) Section 380.13(b)(6)(iii) of this
chapter, baseline threshold value
$100,000; and
(31) Section 380.13(b)(6)(iv) of this
chapter, baseline threshold value
$100,000.
(d) Rounding. When adjusting
thresholds under this section, each
threshold shall be rounded based on the
size of the threshold (e.g., thousands,
millions, billions) to the nearest number
with two significant digits.
(e) Effective date of threshold
adjustments. The FDIC shall announce
the thresholds adjusted in accordance
with this section by publishing in the
Federal Register a final rule without
notice and comment. Such adjusted
thresholds shall be effective on October
1 of the year during which an
adjustment is made.
(f) Failure to publish final rule in
Federal Register. In the event, for any
reason, a final rule is not published in
the Federal Register in a year in which
an adjustment is made under this
section, the thresholds specified in
paragraph (c) of this section will adjust
as provided in this section and be
effective on October 1, notwithstanding
the lack of a final rule published in the
Federal Register.
§ 314.2

[Reserved]

PART 335—SECURITIES OF STATE
NONMEMBER BANKS AND STATE
SAVINGS ASSOCIATIONS
4. The authority citation for part 335
continues to read as follows:

■

Authority: 12 U.S.C. 1819, 15 U.S.C. 78j–
1, 78l(i), 78m, 78n, 78p, 78w, 5412, 5414,
5415, 7241, 7242, 7243, 7244, 7261, 7262,
7264, and 7265.
§ 335.801

[Amended]

5. In § 335.801(d) introductory text,
remove ‘‘$5 million,’’ and add in its
place ‘‘$10 million, as adjusted from
time to time in accordance with 12 CFR
314.1,’’.

■

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■

6. The authority citation for part 340
continues to read as follows:

§ 363.5

■

§ 340.2

[Amended]

7. In § 340.2(h), remove ‘‘$50,000’’
wherever it appears and add in its place
‘‘$100,000, as adjusted from time to time
in accordance with 12 CFR 314.1’’.

■

PART 347—INTERNATIONAL
BANKING
8. The authority citation for part 347
continues to read as follows:

■

Authority: 12 U.S.C. 1813, 1815, 1817,
1819, 1820, 1828, 3103, 3104, 3105, 3108,
3109; Pub L. No. 111–203, section 939A, 124
Stat. 1376, 1887 (July 21, 2010) (codified 15
U.S.C. 78o–7 note).
§ 347.111

[Amended]

9. Amend § 347.111 by:
a. In paragraph (a)(1), removing ‘‘$60
million’’ and adding in its place ‘‘$120
million, as adjusted from time to time in
accordance with 12 CFR 314.1,’’; and
■ b. In paragraph (b)(1) introductory
text, removing ‘‘$30 million’’ and
adding in its place ‘‘$60 million, as
adjusted from time to time in
accordance with 12 CFR 314.1,’’.
■
■

PART 363—ANNUAL INDEPENDENT
AUDITS AND REPORTING
REQUIREMENTS
10. The authority citation for part 363
continues to read as follows:

■

Authority: 12 U.S.C. 1831m.
§ 363.1

[Amended]

11. In § 363.1(a), remove ‘‘$500
million’’ and add in its place ‘‘$1
billion, as adjusted from time to time in
accordance with 12 CFR 314.1,’’.

■

§ 363.2

[Amended]

12. In § 363.2(b)(3) introductory text,
remove ‘‘$1 billion’’ and add in its place
‘‘$5 billion, as adjusted from time to
time in accordance with 12 CFR 314.1,’’.

■

§ 363.3

[Amended]

13. In § 363.3(b) introductory text,
remove ‘‘$1 billion’’ and add in its place
‘‘$5 billion, as adjusted from time to
time in accordance with 12 CFR 314.1,’’.

■

§ 363.4

[Amended]

14. Amend § 363.4 by:
a. In paragraph (a)(2), removing ‘‘$1
billion’’ and adding in its place ‘‘$5
billion, as adjusted from time to time in
accordance with 12 CFR 314.1,’’; and

■
■

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[Amended]

15. Amend § 363.5 by:
a. In paragraph (a)(1), removing ‘‘$1
billion’’ and adding in its place ‘‘$5
billion, as adjusted from time to time in
accordance with 12 CFR 314.1,’’;
■ b. In paragraph (a)(2), removing ‘‘$500
million’’ and adding in its place ‘‘$1
billion, as adjusted from time to time in
accordance with 12 CFR 314.1,’’;
■ c. In paragraph (a)(2), removing ‘‘$1
billion’’ and adding in its place ‘‘$5
billion, as adjusted from time to time in
accordance with 12 CFR 314.1,’’; and
■ d. In paragraph (b), removing ‘‘$3
billion’’ and adding in its place ‘‘$5
billion, as adjusted from time to time in
accordance with 12 CFR 314.1,’’.
■ 16. Add § 363.6 to read as follows:
■
■

Authority: 12 U.S.C. 1819 (Tenth),
1821(p).

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b. In paragraph (c)(3), removing ‘‘$1
billion’’ and adding in its place ‘‘$5
billion, as adjusted from time to time in
accordance with 12 CFR 314.1,’’.

PART 340—RESTRICTIONS ON SALE
OF ASSETS OF A FAILED
INSTITUTION BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION

§ 363.6 Discretion to exempt certain
insured depository institutions from this
part.

If an insured depository institution
likely will no longer be subject to a
requirement of this part as a result of the
application of a threshold adjusted in
accordance with § 314.1 of this chapter
that is scheduled to occur during the
insured depository institution’s current
fiscal year, the appropriate Federal
banking agency with respect to the
insured depository institution may
exercise discretion to not require
compliance from the insured depository
institution with respect to such
requirement as of the beginning of the
insured depository institution’s current
fiscal year. If the insured depository
institution’s total assets exceed such a
threshold subsequent to the threshold
adjustment occurring, the insured
depository institution would be
required to comply with the relevant
requirement notwithstanding this
section, unless the appropriate Federal
banking agency again drew the same
conclusion with respect to a future
threshold adjustment.
Appendix A to Part 363 [Amended]
17. Amend appendix A to part 363 by:
a. In paragraph 8A introductory text,
removing ‘‘$1 billion’’, wherever it
appears, and adding in its place ‘‘$5
billion, as adjusted from time to time in
accordance with 12 CFR 314.1,’’;
■ b. In paragraph 10, removing ‘‘$1
billion’’ and adding in its place ‘‘$5
billion, as adjusted from time to time in
accordance with 12 CFR 314.1,’’;
■ c. In paragraph 18A introductory text,
removing ‘‘$1 billion’’ and adding in its
place ‘‘$5 billion, as adjusted from time
■
■

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55811

to time in accordance with 12 CFR
314.1,’’;
■ d. In paragraph 27:
■ i. Removing ‘‘$1 billion’’, wherever it
appears, and adding in its place ‘‘$5
billion, as adjusted from time to time in
accordance with 12 CFR 314.1,’’; and
■ ii. Removing ‘‘$500 million’’ and
adding in its place ‘‘$1 billion, as
adjusted from time to time in
accordance with 12 CFR 314.1,’’;
■ e. In paragraph 28(b)(4), removing
‘‘$100,000’’ and adding in its place
‘‘$120,000’’;
■ f. In paragraph 30(b), removing ‘‘$1
billion’’ and adding in its place ‘‘$5
billion, as adjusted from time to time in
accordance with 12 CFR 314.1,’’;
■ g. In paragraph 30(c):
■ i. Removing ‘‘$500 million’’ and
adding in its place ‘‘$1 billion, as
adjusted from time to time in
accordance with 12 CFR 314.1,’’; and
■ ii. Removing ‘‘$1 billion’’ and adding
in its place ‘‘$5 billion, as adjusted from
time to time in accordance with 12 CFR
314.1,’’;
■ h. In paragraph 35(a) introductory
text, removing ‘‘$500 million’’ and
adding in its place ‘‘$1 billion, as
adjusted from time to time in
accordance with 12 CFR 314.1,’’;
■ i. In paragraph 35(b), removing ‘‘$1
billion’’ and adding in its place ‘‘$5
billion, as adjusted from time to time in
accordance with 12 CFR 314.1,’’; and
■ j. In paragraph 35(c), removing ‘‘$3
billion’’ and adding in its place ‘‘$5
billion, as adjusted from time to time in
accordance with 12 CFR 314.1,’’.
Appendix B to Part 363 [Amended]
18. In appendix B to part 363,
paragraph 2(b), remove ‘‘$1 billion’’ and
add in its place ‘‘$5 billion, as adjusted
from time to time in accordance with 12
CFR 314.1,’’.

■

PART 380—ORDERLY LIQUIDATION
AUTHORITY
19. The authority citation for part 380
continues to read as follows:

■

Authority: 12 U.S.C. 5385(h); 12 U.S.C.
5389; 12 U.S.C. 5390(s)(3); 12 U.S.C.
5390(b)(1)(C); 12 U.S.C. 5390(a)(7)(D); 12
U.S.C. 5381(b); 12 U.S.C. 5390(r); 12 U.S.C.
5390(a)(16)(D).
§ 380.13

[Amended]

20. In § 380.13(b)(6), remove
‘‘$50,000’’ wherever it appears and add
in its place ‘‘$100,000, as adjusted from
time to time in accordance with 12 CFR
314.1’’.

■

Federal Deposit Insurance Corporation.
By order of the Board of Directors.

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Federal Register / Vol. 90, No. 231 / Thursday, December 4, 2025 / Rules and Regulations

Dated at Washington, DC, on November 25,
2025.
Jennifer M. Jones,
Deputy Executive Secretary.
[FR Doc. 2025–21914 Filed 12–3–25; 8:45 am]
BILLING CODE 6714–01–P

DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
33 CFR Part 165
[Docket Number USCG–2025–0366]
RIN 1625–AA87

Security Zone; Coast Guard Base San
Juan, San Juan Harbor, Puerto Rico
Coast Guard, Department of
Homeland Security.
ACTION: Final rule.
AGENCY:

The Coast Guard is revising
the permanent security zone of the
Coast Guard Base San Juan in San Juan,
Puerto Rico. This security zone is
necessary to protect the public and the
Coast Guard base from potential
subversive acts. This rulemaking
prohibits entry of vessels or persons into
this security zone extending 200 feet
seaward from the water’s edge of the
Coast Guard Base San Juan unless
specifically authorized by the Captain of
the Port, Sector San Juan or their
designated representative.
DATES: This rule is effective January 5,
2026.
ADDRESSES: To view available
documents go to https://
www.regulations.gov and search for
USCG–2025–0366.
FOR FURTHER INFORMATION CONTACT: If
you have questions about this rule,
contact Lieutenant Commander Rachel
E. Thomas, Sector San Juan, Waterways
Management Division Chief, Coast
Guard; telephone (571) 613–1417, email
[email protected].
SUPPLEMENTARY INFORMATION:
SUMMARY:

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I. Table of Abbreviations
CFR Code of Federal Regulations
COTP Captain of the Port
DHS Department of Homeland Security
FR Federal Register
NPRM Notice of proposed rulemaking
§ Section
U.S.C. United States Code

II. Background and Authority
The Coast Guard docking facilities at
Base San Juan in La Puntilla Old San
Juan, Puerto Rico are home to several
Coast Guard cutters and Coast Guard
small boats. The Coast Guard base has

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experienced a number of potential
threat incidents, including unknown
vessels mooring up to the Coast Guard
piers and suspected photography
surveillance by unknown individuals
located near the Coast Guard base.
These incidents pose a potential threat
to national security and could lead to
subversive acts against the personnel or
equipment located at the Coast Guard
base. The Captain of the Port (COTP)
Sector San Juan has determined that
potential threats associated with the
access of unknown individuals to Base
San Juan is a safety concern for anyone
within 200 feet of the water’s edge of the
Coast Guard Base San Juan. This final
rule reduces the existing security zone
for Coast Guard Base San Juan described
in 33 CFR 165.776 so it does not
encroach on the navigable channel. The
rule sustains a sufficient security zone
to address the potential threat to
national security by prohibiting all
persons and vessels from entering in,
transiting through or remaining in a
security zone extending within 200 feet
of the water’s edge of the Coast Guard
Base San Juan.
On July 30, 2025, the Coast Guard
published a notice of proposed
rulemaking (NRPM) titled, ‘‘Security
Zone; Base San Juan, San Juan, PR’’ (90
FR 35839). In that NRPM, we stated why
we issued the NRPM and invited
comments on our proposed regulatory
action related to this security zone
amendment.
Under the authority in 46 U.S.C.
70051 and 70124, the COTP has
determined that this rule is necessary to
protect personnel, vessels, the marine
environment, and the Coast Guard base
from potential subversive acts. No
vessel or person will be permitted to
enter the security zone without
obtaining permission from the COTP or
their designated representative.
III. Discussion of Comments and the
Rule
During the comment period that
ended on August 29, 2025, we received
one comment. The commenter
supported the establishment of the
security zone but asked why we chose
120 yards. The COTP San Juan has
reevaluated this distance and
determined that the proposed 120-yard
zone was inconsistent with the
proposed latitude and longitude
coordinates and would encroach upon
the navigable channel. Therefore, the
final rule will implement a 200-foot
security zone for the reasons set forth
below. The commenter expressed
support for the use of proper signage,
barriers, or other appropriate boundaries
to prevent inadvertent crossings.

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Barriers and boundaries will not be
installed as they could interfere with
operations. The revised security zone
has been reduced in size and no longer
encroaches upon the navigable channel,
thereby minimizing the risk of
inadvertent crossings. Further, the final
rule establishes a uniform distance of
200 feet from the water’s edge of Coast
Guard Base San Juan, which is
anticipated to be more intuitive for
mariners.
The final rule also corrects two
typographical errors in the NPRM
proposed regulatory text by: (1)
Eliminating the duplicate phrase
‘‘Security Zone;’’ in the title; and (2)
correcting the name of ‘‘Sector San
Juan’’ in the final sentence of the
regulatory text, as the word ‘‘San’’ was
inadvertently omitted in the NPRM.
This rule establishes a security zone
extending 200 feet seaward from the
water’s edge of the base. No vessel or
person is permitted to enter the security
zone without obtaining permission from
the COTP or their designated
representative. The regulatory text
appears at the end of this document.
IV. Regulatory Analyses
We developed this rule after
considering numerous statutes and
Executive orders related to rulemaking.
Below we summarize our analyses
based on a number of these statutes and
Executive orders.
A. Impact on Small Entities
The Coast Guard certifies that,
although some small entities may intend
to transit the security zone above, this
rule will not have a significant
economic impact on a substantial
number of small entities, as mandated
by the Regulatory Flexibility Act of
1980, 5 U.S.C. 601–612 for the following
reasons. Vessel traffic will be able to
safely transit around this security zone.
This security zone will only impact a
small, designated area and only extends
200 feet from Base San Juan.
Under section 213(a) of the Small
Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104–121),
if this rule will affect your small
business, organization, or governmental
jurisdiction and you have questions,
contact the person listed in the FOR
FURTHER INFORMATION CONTACT section.
Small businesses may send comments
to the Small Business and Agriculture
Regulatory Enforcement Ombudsman
and the Regional Small Business
Regulatory Fairness Boards by calling 1–
888–REG–FAIR (1–888–734–3247).

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