NR 2000-75
FOR IMMEDIATE RELEASE			
Contact:  Sam Eskenazi (202) 874-5770
September 22, 2000 				    


OCC Proposes Pilot Program Adjusting Certain
Lending Limits For Many Community National Banks

WASHINGTON -- The Office of the Comptroller of the Currency 
announced today a proposal to implement a pilot program 
that would provide well-capitalized and well-managed national 
banks additional flexibility to make residential and 
small business loans.

The proposed rule would allow eligible national banks in 
states with higher lending limits than the national standard 
to extend loans in amounts up to an additional 10 percent of 
capital and surplus to a single borrower for qualified 
residential real estate or small business loans. The residential 
exception would apply to 1-4 family residential real estate 
loans secured by residential real estate. A $10 million cap 
would also be placed on the total amount of additional lending 
that a bank could make under either of the new exceptions.

In addition, the total amount of loans made using these 
lending limit exceptions cannot exceed 100 percent of a 
bank’s capital and surplus.  Banks must apply to the OCC 
to obtain approval to use these exceptions.  In order 
to qualify, a bank must be well capitalized and well managed 
and a majority of the bank’s board must set the terms and 
conditions for the bank’s use of these exceptions. 

This is an issue of fairness for community banks, said 
Comptroller of the Currency John D. Hawke, Jr.  At the 
same time, we are taking steps to assure that this new 
flexibility will be used in a safe and sound manner.

The OCC stated that if the proposal were adopted as a 
final rule, the agency would evaluate national banks’ 
experience with the new exceptions over an initial three-year 
pilot period and then determine whether to retain, modify 
or rescind the exceptions.

Today’s proposal is in response to comments received from 
the banking industry and others following a May 1999 OCC 
request for ideas on this subject.  The proposed rule 
appeared in today’s Federal Register.  Comments 
are due November 21.


The OCC charters, regulates and examines approximately 2,400 
national banks and 58 federal branches of foreign banks in the 
U.S., accounting for more than 57 percent of the nation’s 
banking assets. Its mission is to ensure a safe and sound and 
competitive national banking system that supports the citizens, 
communities and economy of the United States.