(a) General. The Board may require, at any time, an independent audit of the
financial statements of, or the application of procedures agreed upon
by the Board to a savings and loan holding company, or nondepository
affiliate by qualified independent public accountants when needed
for any safety and soundness reason identified by the Board.
(b) Audits required for safety and soundness
purposes.
(1) The
Board requires an independent audit for safety and soundness purposes
if, as of the beginning of its fiscal year, a savings and loan holding
company controls savings association subsidiary(ies) with aggregate
consolidated assets of $500 million or more.
(2) Except as provided in paragraph (b)(3)
of this section, with regard to a savings and loan holding company’s
fiscal year beginning in the calendar years 2020 or 2021, the applicability
of the requirement in paragraph (b)(1) of this section shall be determined
based on the lesser of:
(i) The aggregate consolidated assets of the savings and loan holding
company as of December 31, 2019; and
(ii) The aggregate consolidated assets
of the savings and loan holding company as of the end of its fiscal
year ending in calendar year 2020.
(3) The relief provided under paragraph
(b)(2) of this section does not apply to a savings and loan holding
company if the Board determines that permitting the savings and loan
holding company to determine its assets in accordance with that paragraph
would not be commensurate with the risk profile of the savings and
loan holding company. When making this determination, the Board will
consider all relevant factors, including the extent of asset growth
of the savings and loan holding company since December 31, 2019; the
causes of such growth, including whether growth occurred as a result
of mergers or acquisitions; whether such growth is likely to be temporary
or permanent; whether the savings and loan holding company has become
involved in any additional activities since December 31, 2019; the
asset size of any parent companies; and the type of assets held by
the savings and loan holding company. In making a determination pursuant
to this paragraph (b)(3), the Board will apply notice and response
procedures in the same manner and to the same extent as the notice
and response procedures in 12 CFR 263.202.
(c) Procedures.
(1) When the Board requires an independent
audit because such an audit is needed for safety and soundness purposes,
the Board shall determine whether the audit was conducted and filed
in a manner satisfactory to the Board.
(2) When the Board requires the application of procedures agreed
upon by the Board for safety and soundness purposes, the Board shall
identify the procedures to be performed. The Board shall also determine
whether the agreed upon procedures were conducted and filed in a manner
satisfactory to the Board.
(d) Qualifications for independent public accountants. The audit shall be conducted by an independent public accountant
who:
(1) Is registered
or licensed to practice as a public accountant, and is in good standing,
under the laws of the state or other political subdivision of the
United States in which the savings association’s or holding company’s
principal office is located;
(2)
Agrees in the engagement letter to provide the Board with access to
and copies of any work papers, policies, and procedures relating to
the services performed;
(3) (i) Is in compliance with the
American Institute of Certified Public Accountants’ (AICPA) Code of
Professional Conduct; and
(ii)
Meets the independence requirements and interpretations of the Securities
and Exchange Commission and its staff; and
(4) Has received, or is enrolled in, a
peer review program that meets guidelines acceptable to the Board.
(e) Voluntary audits. When a savings and loan holding company or nondepository affiliate
obtains an independent audit voluntarily, it must be performed by
an independent public accountant who satisfies the requirements of
paragraphs (d)(1), (d)(2), and (d)(3)(i) of this section.
