On Nov. 25, 2025, the Federal Deposit Insurance Corporation (FDIC) announced the final rule (including 12 CFR Part 363) to amend certain regulatory thresholds in several parts of Title 12 in the Code of Federal Regulations, including those related to annual independent audit and reporting requirements under 12 CFR Part 363.

What to Expect

Effective Jan. 1, 2026, all FDIC-insured and supervised financial institutions, prospective employees of banks and potential acquirers of failed bank assets, must comply with the changes outlined in the rule. If an insured depository institution will no longer be subject to Part 363 requirements under the updated thresholds in effect as of Jan. 1, 2026, the final rule provides immediate regulatory relief by clarifying they will no longer be subject to such requirements as of Dec. 31, 2025.

The following is an overview of the expected changes:

• Updates to certain regulatory thresholds to reflect historical inflation.
  • Increased threshold from $500 million to $1 billion for:
    • Annual reporting requirement
    • Independent audit committee
    • Independent auditor meeting independence requirements and interpretations of Securities and Exchange Commission (SEC)
  • Increased threshold from $1 billion to $5 billion for:
    • Management’s report of effectiveness of internal controls over financial reporting and bank’s compliance with applicable laws and regulations
    • Independent auditor’s report on the effectiveness of internal controls over financial reporting
• An indexing methodology for subsequent, periodic threshold adjustments that would be implemented automatically every two consecutive years. These adjustments would be effective as of October 1 of the year the threshold is adjusted.
• If it appears likely that a forthcoming threshold adjustment will result in an insured depositary institution with total assets above the threshold falling below the adjusted threshold, the
• appropriate federal banking agency may exercise discretion to not require compliance with the relevant Part 363 requirement.

Proactive Steps to Take

While the final rule may provide relief for community banks, it’s still important for management to remain diligent in maintaining a strong internal control environment – especially those over financial reporting. Doeren Mayhew’s bank pros are dedicated to helping banks prioritize and identify risks throughout their organization. Partner with us to develop an effective risk-based internal audit plan to keep risks at the forefront.