WASHINGTON, DC -- The Office of the Comptroller of the
Currency (OCC) today issued a final rule for national banks that substantially
change the composition of assets through a sale or other disposition to become
a dormant or “stripped” charter. The
rule also applies to a “stripped” charter that subsequently increases in asset
size or expands operations.
Specifically, national banks will be required to obtain
prior OCC written approval for two types of fundamental changes in bank
assets: (1) a change in composition of
all, or substantially all, of bank assets through a sale or other disposition,
and (2) a purchase or acquisition of assets or expansion of operations after a
sale of all, or substantially all, of bank assets.
Three exemptions apply.
First, the requirement does not apply to a bank that changes its asset
composition in connection with a voluntary liquidation that is completed within
one year after notifying the OCC.
Second, a national bank is exempt if the change in the composition of
assets is in response to direction from the OCC, such as an enforcement
action. Third, a national bank is
exempt when changes in asset composition occur as a result of a bank’s ordinary
and ongoing business of originating and securitizing loans.
The OCC’s evaluation of these changes to bank operations
will consider the purpose of the changes, the impact on bank safety and
soundness and any impact on bank customers.
The OCC can deny the bank’s application if any of these factors are
affected negatively. In addition, the
OCC will apply the factors governing the organization of a de novo bank to its review of any changes in asset composition or
other expansions of operations of a dormant charter.
Today’s new application requirements in the final rule are
likely to affect only a small number of national banks that propose to engage
in transactions that fundamentally change the character of their
operations.
The final rule appears in today’s Federal Register. The rule
takes effect October 1.
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The OCC charters, regulates and examines approximately
2,000 national banks and 51 federal branches of foreign banks in the U.S.,
accounting for more than 56 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.