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Federal Agencies Increase Threshold for Shared National Credit Program

December 22, 2017, 08:00 AM
Filed Under: Regulatory News

To adjust for inflation and changes in average loan size, the federal banking agencies announced that, effective January 1, 2018, the aggregate loan commitment threshold for inclusion in the Shared National Credit (SNC) program will increase from $20 million to $100 million. This change will reduce reporting burden for a substantial number of banking institutions, with no material impact on the size of the portfolio evaluated.

The reporting change provides regulatory relief to 82 financial institutions while reducing the dollar amount of loans identified as SNCs by 2%.  As a result, the SNC program will continue to reflect a portfolio of more than $4.2 trillion in credit commitments. 

The SNC program is an interagency review and assessment of risk in the largest and most complex credits shared by multiple financial institutions. The interagency program began in 1977. This is the first increase in the dollar threshold for inclusion as a SNC since the program’s inception.

Further, the agencies announced that, starting in 2018, annual SNC results will be reported after the third quarter examination, reflecting data as of June 30.  Previously the annual report was issued after the first quarter examination, reflecting data as of December 31.

Separately the agencies also announced the annual adjustment to the asset-size thresholds used to define small bank, small savings association, intermediate small bank, and intermediate small savings association under the Community Reinvestment Act (CRA) regulations.

The annual adjustments are required by the CRA rules. Financial institutions are evaluated under different CRA examination procedures based upon their asset-size classification. Those meeting the small and intermediate small institution asset-size thresholds are not subject to the reporting requirements applicable to large banks and savings associations unless they choose to be evaluated as a large institution.

Annual adjustments to these asset-size thresholds are based on the change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), not seasonally adjusted, for each 12-month period ending in November, with rounding to the nearest million.

As a result of the 2.11% increase in the CPI-W for the period ending in November 2017, the definitions of small and intermediate small institutions for CRA examinations will change as follows:

  • "Small bank" or "small savings association" means an institution that, as of December 31 of either of the prior two calendar years, had assets of less than $1.252 billion.
  • "Intermediate small bank" or "intermediate small savings association" means a small institution with assets of at least $313 million as of December 31 of both of the prior two calendar years and less than $1.252 billion as of December 31 of either of the prior two calendar years.


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