FDIC Proposes Inflation-Indexed Reforms to Part 363 Audit and Reporting Requirements
On July 15, 2025, the Federal Deposit Insurance Corporation (FDIC) proposed a rule to modernize Part 363 of its regulations, which, in part, governs audit and reporting requirements for insured depository institutions. The proposed changes aim to raise and index a wide range of asset-based thresholds that have remained static for decades, despite inflation and shifts in the banking landscape.
Part 363 currently outlines requirements for annual independent audits, internal control assessments, and audit committee composition. Under the proposed rule, the asset threshold for a Part 363 Annual Report (comprised of audited financial statements, an independent public accountant’s report thereon, and a management report) would increase from $500 million to $1 billion. Similarly, the threshold for requiring management’s assessment of internal controls over financial reporting, and an independent public accountant’s report thereon, would rise from $1 billion to $5 billion. Finally, thresholds related to audit committee composition would increase from $500 million to $1 billion, or from $1 billion or $3 billion to $5 billion, depending which guidance within the regulation is applicable. These thresholds would also be indexed to inflation going forward, ensuring they remain stable in real terms and do not inadvertently expand regulatory scope over time.
The FDIC’s proposal is designed to reduce compliance burdens on smaller institutions, particularly those in rural areas. By adjusting these thresholds, the FDIC aims to better align regulatory obligations with institutional size and risk profile while preserving the integrity of financial oversight.
In addition to the changes under Part 363, the FDIC is evaluating other regulatory thresholds, including those related to the continuous examination program and the large bank pricing scorecard for deposit insurance assessments. The proposed rule is open for public comment for 60 days following its publication in the Federal Register, giving stakeholders an opportunity to provide feedback on these potentially far-reaching reforms.
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