BC 243
Type:  Banking Circular
Subject:  Suspicious Transactions
Date: February 7, 1990


TO:  Chief Executive Officers of all National Banks; All State Banking Authorities; 
Chairman, Board of Governors of the Federal Reserve System; Chairman, Federal 
Deposit Insurance Corporation; Conference of State Bank Supervisors; Deputy 
Comptrollers (Districts); District Administrators; District Counsel and Examining 
Personnel.

Information is being received by the Office of the Comptroller of the Currency that 
indicates that many banks are being requested to enter into financial transactions 
involving so-called "Prime Bank Discounted Letters of Credit" and "Zero Coupon 
Letters of Credit". Such proposed transactions for the most part cite multi-millions and 
multi-billions of either U.S. or foreign currency. Such instruments are not known to be 
issued by the legitimate banking community and the legality of such instruments is 
questionable. Extreme caution should be exercised if approached by individuals 
promoting such instruments.

Information has also been received that the Office of the Comptroller of the Currency, 
Enforcement & Compliance Division, is being cited as a reference in certain 
promotional materials being distributed to financial institutions relating to so called 
Collateral Enhancement Programs, Link Deposit/Loan Programs and other financial 
plans.

Please be advised that this Office has not authorized any entity which may be 
"marketing" such plans to represent that OCC will act as a reference, serve as an 
approval authority, or otherwise serve as a due diligence clearinghouse for any such 
plans or proposals.

As always, financial institutions themselves are responsible for reviewing the merits 
of any such proposals or plans.

Any information which you may have concerning this matter should be brought to the 
attention of:



Office of the Comptroller of the Currency
Enforcement & Compliance Division
Washington, D.C. 20219



Robert B. Serino
Deputy Chief Counsel (Policy)