The FDIC just stretched bank compliance examinations from roughly 2-3 years to as long as 6.5 years for well-rated institutions. 66-78 months. That’s how long some banks can now operate between full consumer compliance reviews.
Why does this matter to you? Banks handle everything from mortgage insurance to credit insurance to investment accounts. Longer gaps between regulatory check-ups could mean compliance issues sit undetected longer. On November 7, 2025, the FDIC announced its new examination schedule affecting every supervised financial institution nationwide.
The twist: They’re adding mid-point “health checks” to catch problems between full exams. Will it work? Let’s break down what changed and what it means for your financial safety.
The New Examination Timeline (Three Tiers)
The FDIC now assigns institutions to one of three examination cycles based on asset size and previous compliance ratings. No more one-size-fits-all approach.
| Examination Cycle | Institution Type | Previous Cycle |
|---|---|---|
| 66-78 months | Large, well-rated institutions | 24-36 months |
| 54-66 months | Mid-size with satisfactory ratings | 18-24 months |
| 24-36 months | Institutions with adverse ratings or smaller size | 12-18 months |
The longest cycle essentially triples the examination gap for top-performing banks. Banks with $10 billion+ in assets and strong consumer compliance track records can now go 6+ years between comprehensive reviews by federal examiners.
The shortest cycle stays relatively consistent. Banks with compliance problems or poor Community Reinvestment Act (CRA) ratings still face reviews every 2-3 years.
What’s This Mid-Point Risk Analysis?
This is new. For institutions on longer examination cycles, the FDIC will conduct a risk assessment at the halfway point. Think of it as a wellness check between full physicals.
Around the 33-39 month mark for the longest cycle, FDIC examiners analyze:
- Consumer complaint trends. Sudden spikes in complaints about unfair fees, misleading insurance products, or discriminatory lending trigger deeper scrutiny.
- Regulatory violations reported by other agencies including state insurance departments or the Consumer Financial Protection Bureau.
- Changes in business model or leadership that could impact compliance culture. New CEO with aggressive growth targets? Red flag.
- Market conditions affecting the institution’s primary business lines. Economic stress in auto lending or mortgage markets might warrant a check-in.
If the risk analysis raises concerns, the FDIC can order an interim supervisory visit or targeted examination before the next scheduled full review. It’s not automatic—it’s risk-based.
Does this adequately replace more frequent exams? The FDIC thinks so. Critics worry 3+ years gives problematic practices time to become systemic before discovery.
Why Did the FDIC Extend Examination Cycles?
Regulatory efficiency. The FDIC supervises thousands of financial institutions with limited examiner resources. By focusing intensive reviews on higher-risk banks, they theoretically improve oversight quality where it matters most.
The logic: Well-managed banks with 5+ years of clean compliance records don’t need annual check-ups. Resources shift to troubled institutions requiring closer supervision.
This follows a broader regulatory trend across financial services. Risk-based supervision allocates oversight based on institution size, complexity, and historical performance rather than applying uniform frequency standards.
Three reasons behind the change:
- Examiner shortage nationwide. State and federal banking regulators struggle to hire and retain qualified compliance examiners, especially in specialized areas like fair lending analysis and CRA evaluation.
- Technology improvements in off-site monitoring. The FDIC now uses data analytics and automated reporting to track institutions between exams, reducing the need for on-site physical presence.
- Industry lobbying for regulatory relief. Banks, particularly community banks, have long argued that frequent exams divert management attention from serving customers and strain compliance departments.
What This Means for Bank Customers
Most consumers won’t notice immediate changes. Your deposit insurance stays at $250,000 per account. Federal consumer protection laws still apply. Banks still file the same regulatory reports.
The risk is subtle. Compliance problems that develop between examinations could affect you in these ways:
- Insurance product mis-selling goes undetected longer. Banks often sell credit life insurance, mortgage insurance, and other products. Without regular regulatory reviews, questionable sales practices might persist for years before discovery.
- Fair lending violations accumulate. If a bank’s mortgage or auto loan underwriting develops discriminatory patterns, it could impact thousands of applicants before examiners identify the issue.
- Fee structures become more aggressive. Banks sometimes test new overdraft policies or account fees that push legal boundaries. Longer exam gaps mean more time before regulators challenge problematic practices.
- Community Reinvestment Act compliance slides. CRA requirements ensure banks serve low- and moderate-income neighborhoods. Reduced examination frequency could allow some institutions to reduce community lending commitments without immediate consequences.
The mid-point risk analysis theoretically prevents these scenarios. But it relies on complaint data and regulatory reports—reactive indicators rather than proactive examinations.
Banks With Poor Ratings Face Tighter Oversight
If your bank has compliance issues, you might actually see MORE regulatory attention under the new system. The 24-36 month cycle for poorly-rated institutions comes with additional scrutiny.
Adverse ratings trigger:
- More frequent supervisory contact between formal examinations, including quarterly calls with bank management and monthly data submissions.
- Targeted examinations on specific issues rather than comprehensive reviews, allowing examiners to dive deep into problem areas like subprime auto lending or insurance product sales.
- Required corrective action plans with progress reporting to the FDIC every 60-90 days until compliance improves.
How do you know your bank’s rating? You don’t, directly. The FDIC doesn’t publish individual bank examination ratings publicly. But you can watch for indirect signals like enforcement actions published on the FDIC’s enforcement page or unusual management turnover.
What Banks Need to Do Now
Financial institutions should review the updated Consumer Compliance Examination Manual immediately. The FDIC provided a redline document showing exactly what changed in Section II-12.1.
Three action items for compliance departments:
- Strengthen internal monitoring systems. With potentially 6+ years between full exams, banks must catch compliance issues themselves through robust internal audits, mystery shopping programs, and complaint tracking.
- Prepare for mid-point risk analysis. Maintain documentation of compliance initiatives, consumer complaint resolution, and fair lending metrics that examiners might request during the halfway review.
- Understand your examination cycle assignment. Contact your FDIC relationship manager to confirm which tier applies to your institution and when the next full examination is scheduled.
Banks that assume longer exam cycles mean reduced compliance attention risk nasty surprises when examiners do arrive. The FDIC expects institutions to maintain compliance between examinations, not just before them.
Frequently Asked Questions
Why did the FDIC extend compliance examination cycles to 78 months?
The FDIC shifted to risk-based supervision, allocating examiner resources based on institution size and compliance history. Well-rated banks with strong track records receive less frequent comprehensive exams, while troubled institutions face more intensive oversight. The agency uses improved technology and data analytics to monitor institutions between on-site examinations.
What happens during the new mid-point risk analysis?
For banks on longer examination cycles, FDIC examiners conduct a risk assessment at the halfway point (around 33-39 months into a 66-78 month cycle). They analyze consumer complaints, regulatory violations, business model changes, and market conditions. If concerns emerge, the FDIC can order an interim examination or supervisory visit before the next scheduled full review.
Does this change affect my FDIC deposit insurance coverage?
No. Your deposit insurance remains at $250,000 per depositor, per insured bank, per ownership category. The examination schedule change affects regulatory oversight frequency but doesn’t modify deposit insurance limits or federal consumer protection laws that apply to your accounts.
How can I tell if my bank has compliance problems?
The FDIC doesn’t publish individual bank examination ratings publicly. Watch for indirect signals: enforcement actions on the FDIC enforcement page, consent orders requiring corrective action, unusual executive turnover, or patterns of consumer complaints to the Consumer Financial Protection Bureau. You can also check your bank’s CRA rating, which is publicly available.
Which banks face the longest examination cycles?
Banks with strong consumer compliance ratings, clean CRA evaluations, and typically larger asset bases ($10 billion+) can now go 66-78 months between comprehensive FDIC examinations. These institutions demonstrated consistent compliance over multiple previous examination cycles and maintain robust internal control systems.
The Bottom Line: Trust But Verify
The FDIC’s revised examination schedule represents a major regulatory philosophy shift. Longer cycles for well-rated banks free examiner resources while mid-point risk analysis provides a safety net.
Will it work? That depends on whether the mid-point analysis effectively catches emerging problems before they become systemic. Early warning systems only work if regulators act on the warnings.
For bank customers, the practical advice stays constant: Monitor your accounts, read disclosures carefully before purchasing bank-offered insurance products, and report suspected violations to the CFPB or your state banking regulator. Regulatory oversight matters, but informed consumers provide the first line of defense against financial services abuse.
The FDIC isn’t abandoning supervision—it’s restructuring it. Time will tell whether this approach maintains consumer protection standards while improving regulatory efficiency.