On May 18, the Office of the Comptroller of the Currency (OCC) adopted a final rule to (1) integrate its rules relating to policies and procedures for corporate activities and transactions involving national banks and federal savings associations; (2) revise some of these rules in order to eliminate unnecessary requirements consistent with safety soundness; and (3) to promote fairness in supervision. The final rule also makes other technical and conforming changes. Title III of the Dodd-Frank Wall Street Reform and Consumer Protection Act, transferred to the OCC all functions of the former Office of Thrift Supervision (OTS). The OCC explained that the final rule related to licensing consolidation is part of a broader effort “to reduce regulatory duplication, promote fairness in supervision, eliminate unnecessary burden consistent with safety and soundness, and create efficiencies for both national banks and savings associations, as well as the OCC.” Specifically, the agency stated, “In addition, the OCC is in the latter stages of developing an electronic applications filing system capable of handling applications and other filings from both national banks and Federal savings associations. Accordingly, another important objective of this rulemaking is to complete the integration of our licensing rules expeditiously so that we can include these integrated rules in this new applications system.”
While in proposed form, the regulation was criticized by the American Bankers Association for going beyond mere integration and imposing new substantive, and in some cases more stringent, requirements on national banks and federal savings associations.
The final rule, which goes into effect on July 1, a relatively short time frame between adoption and effectiveness, consolidates most licensing provisions for federal savings associations into the existing national bank rule in part 5 of the OCC regulations. These combined rules are as follows:
- rules of general applicability (subpart A);
- organizing a national bank or federal savings association (§ 5.20);
- conversion from a national bank or federal savings association to a state bank or state savings association (§ 5.25);
- fiduciary powers of national banks or federal savings associations (§ 5.26);
- business combinations involving a national bank or federal savings association (§ 5.33);
- bank service company investments of a national bank or federal savings association (§ 5.35);
- investment in national bank or Federal savings association premises (§ 5.37);
- change in location of a main office of a national bank or home office of a federal savings association (§ 5.40);
- corporate title of a national bank or Federal savings association (§ 5.42);
- voluntary liquidation of a national bank or Federal savings association (§ 5.48);
- change in control of a national bank or federal savings association; reporting of stock loans (§ 5.50);
- changes in directors and senior executive officers of a national bank or federal savings association (§ 5.51);
- change of address of a national bank or federal savings association (§ 5.52); and
- substantial asset change by a national bank or federal savings association (§ 5.53).
In other cases, the final rule retains separate rules for national banks and federal savings association in part 5 “because the rules do not apply to both charters, are better organized as separate rules, or their differences and complexity make integration difficult.” The new federal savings association rules are as follows:
- federal mutual savings association charters and bylaws (§ 5.21);
- federal stock savings association charters and bylaws (§ 5.22);
- conversion to become a federal savings association (§ 5.23);
- establishment, acquisition, and relocation of a branch and establishment of an agency office of a federal savings association (§ 5.31);
- operating subsidiaries of a federal savings association (§ 5.38);
- increases in permanent capital of a federal stock savings association (§ 5.45);
- capital distributions by a federal savings association (§ 5.55);
- inclusion of subordinated debt securities and mandatorily redeemable preferred stock as supplementary (tier 2) capital (§ 5.56);
- pass-through investments by a federal savings association (§ 5.58); and
- service corporations of federal savings associations (§ 5.59).
The remaining rules in part 5 continue to be applicable only to national banks, with the exception of subpart E. The national bank only rules are as follows:
- conversion to become a national bank (§ 5.24);
- establishment, acquisition, and relocation of a branch of a national bank (§ 5.30);
- expedited procedures for certain reorganizations of a national bank (§ 5.32);
- operating subsidiaries of a national bank (§ 5.34);
- other equity investments by a national bank (§ 5.36);
- financial subsidiaries of a national bank (§ 5.39);
- changes in permanent capital of a national bank (§ 5.46);
- subordinated debt issued by a national bank (§ 5.47); and
- payment of dividends by national banks (Subpart E).
In addition to the placement and integration of federal savings association rules, the final rule makes substantive changes to the OCC’s licensing rules to eliminate unnecessary requirements and to further the safe and sound operation of the institutions the OCC supervises. The final rule also makes conforming and technical changes, and amends the OCC’s licensing rules to direct filings to the institution’s appropriate OCC licensing office or appropriate OCC supervisory office.