WASHINGTON
-- The Office of the Comptroller of the Currency (OCC) is publishing contact
points at the OCC for banks and customers with questions and concerns about
tying. The term “tying” refers to
practices where the availability or price of one product or service is
conditioned or “tied” to a customer also obtaining another product or service
from the bank. Some types of tying are
permissible, while others are prohibited.
This
OCC contact information implements the October 2003 General Accounting Office
(GAO) report recommendation that the OCC consider publication of specific
contact information for questions and information concerning tying. The same GAO report noted that there was
little documentary evidence associated with allegations of illegal tying by
banks.
The
tying standards that apply to banks are complex and multifaceted. The Bank Holding Company Act Amendments of
1970, generally prohibit a bank from conditioning the availability or price of
one product or service on the requirement that a customer also obtain another
product or service from the bank or an affiliate of the bank. However, section 106 also establishes a
number of exceptions to this prohibition.
For example, banks may condition the availability or price of a product
or service on the requirement that the customer:
obtain
a loan, discount, deposit, or trust service from the bank;
provide
an additional product that is related to and usually provided in connection
with a loan, discount, deposit or trust service; or
not
obtain additional products or services from competitors if the condition is
reasonably imposed in a credit transaction to assure the soundness of the
credit.
In
addition, section 106 applies only to tying arrangements that are imposed by a bank,
and does not apply to nonbank affiliates of a bank or other nonbank
entities. The Federal Reserve Board
also may grant additional exceptions to the statute’s restrictions by
regulation or order.
Under
section 106, banks may not condition the availability of credit on the
condition that customers use underwriting services of an affiliate. However, banks may decline to provide credit
based on the customer’s failure to satisfy credit standards or other
requirements not prohibited under section 106.
Similarly,
banks may not condition the availability of consumer credit on the purchase of
credit insurance from the bank.
However, banks may require loan customers to purchase insurance that is
usually required in connection with particular types of loans.
Contact
Information
Individual
bank customers with complaints about tying by a particular national bank should
contact:
Office
of the Comptroller of the Currency
Customer
Assistance Group
1301
McKinney Street, Suite 3450
Houston,
Texas 77010
Telephone:
713-336-4300
Fax:
713-336-4351
Business
or corporate bank customers with complaints about illegal tying by a particular
national bank, and any bank customers with questions regarding interpretations
of the tying statute should contact:
Office
of the Comptroller of the Currency
Securities
& Corporate Practices Division
250
E Street S.W.
Washington,
D.C. 20219
Telephone:
202-874-5210
Fax:
202-874-5279
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The
OCC charters, regulates and examines approximately 2,100 national banks and
52 federal branches of foreign banks in the U.S., accounting for more than 55
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.
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