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pc nid 94985 Sep 04, 2026 ataylor@vixio.com Texas Texas Department of Banking (Policy and Guidance Actions) horizon scanning
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Texas Department of Banking Updates Examination Frequency Policy for State-Chartered Banks

On September 1, 2026, the Texas Department of Banking (Department) issued Supervisory Memorandum 1003, revising its examination frequency requirements for state-chartered banks. The update raises the asset threshold for banks eligible for an 18-month examination cycle from $3 billion to $6 billion, aligning with changes to federal law resulting from the 21st Century ROAD to Housing Act, which passed in July 2026. The Department, in cooperation with the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Bank of Dallas (FRB), coordinates examination efforts to reduce regulatory burden. The general practice involves alternating examinations between the Department and the appropriate federal agency, though the Department retains authority to conduct independent or joint examinations as deemed necessary. The memorandum establishes four examination scope types: Full Scope (comprehensive assessment resulting in a CAMELS rating), Visitation (narrowly scoped reviews of specific risk areas), Interim Risk Examination and Assessment (IREAP), and Continuous Examination Program (CEP, primarily for institutions with $10 billion or greater in assets). Examination frequency depends on asset size, capital adequacy, and composite ratings. Banks greater than $6 billion but less than $10 billion with composite ratings of 1 or 2 and well-capitalized status undergo Full Scope examinations every 12 months. Banks of $6 billion or less meeting similar criteria may extend to 18 months. De novo banks receive a Visitation within six months of opening, followed by Full Scope examinations annually for five years. The Department may shorten examination cycles for institutions experiencing changes of control, component rating downgrades, or enforcement actions. Extensions up to six months are permitted for anticipated mergers, charter changes, or natural disasters, with Commissioner approval required for extensions beyond six months. Trust department examinations generally align with Safety and Soundness examination frequency. Questions regarding this memorandum should be directed to the Deputy Commissioner of Bank and Trust Supervision at 512-475-1300.

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Texas Department of Banking Updates Examination Frequency Policy for State-Chartered Banks

On September 1, 2026, the Texas Department of Banking (Department) issued Supervisory Memorandum 1003, updating examination frequency requirements for state-chartered banks. The memorandum, issued by Banking Commissioner Charles G. Cooper, revises the asset threshold for banks eligible for an 18-month examination cycle from $3 billion to $6 billion, aligning with changes to federal law resulting from the 21st Century ROAD to Housing Act passed in July 2026. The Department's examination frequency policy aims to promote competitive parity with federal bank supervisory agencies while coordinating with the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Bank of Dallas (FRB) to reduce regulatory burden. The Department generally alternates examinations between state and federal agencies, though it retains authority to conduct independent or joint examinations when deemed appropriate. The memorandum establishes four examination scope types: Full Scope examinations (comprehensive assessments resulting in CAMELS ratings); Visitations (narrowly scoped reviews focusing on specific risk areas); Interim Risk Examination and Assessment (IREAP) reviews; and Continuous Examination Programs (CEP), primarily for institutions with $10 billion or greater in assets. Banks with $6 billion or less in assets and meeting specified capital and composite rating criteria now qualify for Full Scope examinations every 18 months, while larger institutions or those with lower composite ratings remain subject to 12-month cycles. De novo banks receive Visitations within six months of opening, followed by annual Full Scope examinations for the first five years. The Department may shorten examination frequency for banks experiencing changes in control, component rating downgrades, or enforcement actions. Extensions up to six months are permitted for anticipated mergers, charter changes, or natural disasters, with longer extensions requiring Commissioner approval. Trust department examinations generally align with Safety and Soundness examination frequency, though certain conditions permit waiving Trust examinations if the most recent examination occurred within 12 months with composite ratings of 1 or 2. REFERENCES: Texas Department of Banking Supervisory Memorandum 1003 (September 1, 2026): https://www.dob.texas.gov/
3 tool calls
  1. fetch https://www.dob.texas.gov/sites/default/files/files/Laws-Regulations/New-Actions/sm1003.pdf http · 13007 chars · 0 links
  2. search "Texas Department of Banking supervisory memorandum examination frequency" → nids 92932, 92898, 94104, 91241, 95345
  3. search "Texas Department of Banking state-chartered bank policy guidance" → nids 94581, 92932, 91319, 94104, 92468

Published

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Texas Department of Banking Issues Supervisory Memorandum on Examination Frequency for State-Chartered Banks

On September 1, 2026, the Texas Department of Banking (DOB) issued Supervisory Memorandum 1003, clarifying examination frequency requirements for state-chartered banks and their trust departments. The memorandum outlines the DOB's policy for on-site examination timing, generally aligning with federal examination frequency requirements while preserving the Commissioner's authority to examine any state bank as frequently as deemed necessary. Key provisions of the memorandum include: Examination frequency by asset size and condition: The frequency of examinations is determined by the bank's size, financial condition, and CAMELS ratings. Banks in strong financial condition may qualify for an 18-month examination cycle, while banks with higher risk profiles, lower ratings, or capital deficiencies are examined on a 12-month cycle or more frequently. Examination scope types: The Department utilizes four types of examination scopes: Full Scope (most comprehensive, results in a Report of Examination and CAMELS rating assignment), Visitation (narrowly scoped, results in a Letter of Findings), Interim Risk Examination and Assessment (IREAP) (risk-focused reviews that may result in CAMELS component changes), and Continuous Examination Program (used for larger institutions, generally $10b and greater, consisting of targeted reviews over a 12-month cycle). Exceptions to examination schedule: Shortened examination cycles may be imposed for institutions operating under certain circumstances, including change of control, component ratings of three or worse, or formal or informal enforcement actions. Extensions of up to six months may be granted for extenuating circumstances such as anticipated mergers, charter changes, or natural disasters, with approval required from the Deputy Commissioner and Commissioner. Questions about the memorandum may be directed to the Deputy Commissioner of Bank and Trust Supervision at 512-475-1300.