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OCC BULLETIN 2009-10
To: Chief Executive Officers of National Banks, Department and Division Heads, Examining Personnel, and Other Interested Parties

Description: Final Rule

This bulletin briefly summarizes a final rule concerning the risk-based capital treatment for certain asset-backed commercial paper (ABCP) purchased by national banks pursuant to a special lending facility established by the Board of Governors of the Federal Reserve System (Federal Reserve). The final rule was published on March 27, 2009, in the Federal Register by the Office of the Comptroller of the Currency (OCC).

Summary

The final rule extends the risk-based capital treatment of a previously issued interim final rule for ABCP purchased by national banks pursuant to the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (ABCP Lending Facility) established by the Federal Reserve. The ABCP Lending Facility enables depository institutions to borrow on a nonrecourse basis from the Federal Reserve Bank of Boston if the depository institution uses the loan proceeds to purchase high-quality ABCP from money market mutual funds. The Federal Reserve established the ABCP Lending Facility on September 19, 2008, and extended it to October 30, 2009. The final rule, which applies to ABCP purchased pursuant to the ABCP Lending Facility, recognizes that the nonrecourse basis of the loan protects the bank from the credit and market risks of the purchased ABCP. Under the final rule, a national bank may assign a zero percent risk weight to the ABCP purchased by the bank.

Further Information

For further information about this bulletin, contact the Office of the Chief National Bank Examiner (202) 649-6370.

Timothy W. Long
Senior Deputy Comptroller for Bank Supervision Policy
and Chief National Bank Examiner

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