Bank asset size rules clarified by regulators

Banking regulators will soon be able to determine whether financial institutions have assets of more than $10 billion and require supervision for new consumer protection rules.

Five government regulators will be a part of the process, including the Federal Reserve, the National Credit Union Administration, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency. They will use quarterly filings, referred to as call reports, in order to determine whether banks, thrifts and credit unions meet the key threshold under the Dodd-Frank Act, reports.

An earlier determination of financial institutions’ sizes took place after the June call reports, but banks cannot be classified unless the size of their assets sit above or below the $10 billion threshold for four consecutive quarters.

According to Dodd-Frank, once a bank is officially identified as having more than $10 billion in assets, it must be supervised for compliance with the Consumer Financial Protection Bureau’s new consumer laws.

In July, the CFPB alerted the nation’s 111 largest banks that have assets above $10 billion that they would require supervision for consumer protections compliance.

The process “avoids unwarranted uncertainty or volatility regarding the identity of an institution’s primary supervisor for federal consumer financial laws,” the agencies wrote in a statement, reports.

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