Article
Understanding FDICIA compliance: A guide for financial institutions
Sept. 8, 2025 · Authored by Kevin Schalk
The Federal Deposit Insurance Corporation Improvement Act (FDICIA), enacted in 1991, was designed to enhance the oversight and stability of insured depository institutions. For banks and financial institutions with assets exceeding $500 million, FDICIA compliance is not just a regulatory requirement, it’s a necessary component for long-term success.
Why FDICIA compliance matters
FDICIA mandates independent audits and robust internal controls over financial reporting (ICFR). Institutions that meet the asset threshold must demonstrate accountability through timely reporting and risk management practices that align with regulatory expectations.
Key steps to achieve compliance
Navigating FDICIA compliance requires more than just meeting regulatory thresholds, it demands a proactive, structured approach to internal controls and risk management. Financial institutions that implement a clear compliance roadmap are better positioned to maintain transparency, avoid penalties and build stakeholder confidence. Institutions should follow these essential steps to ensure they meet FDICIA requirements effectively:
In July 2025 the Federal Deposit Insurance Corporation (FDIC) proposed updating thresholds from $500 million $1 billion. Additionally, the Internal Control over Financial Reporting (ICFR) proposed a raise from $1 billion to $5 billion. Our team is dedicated to staying on top of the latest updates.
Conduct a comprehensive risk assessment using the Committee of Sponsoring Organizations (COSO) 2013 internal control integrated framework. Focus on financial statement mapping, business segments and branch-specific risks.
Clearly document all financial and operational controls to ensure transparency and facilitate monitoring.
Highlight controls that are critical to financial reporting integrity. These should be prioritized and reviewed regularly.
Perform routine testing to validate control effectiveness, using structured templates and thorough documentation.
Address any deficiencies identified during testing with targeted remediation to ensure full compliance.
