Activities and Operations of National Banks and Federal Savings Associations: Notice of Proposed Rulemaking

Summary

The Office of the Comptroller of the Currency (OCC) is proposing to update its regulations in 12 CFR 7, “Activities and Operations.” This proposal would update or eliminate outdated regulatory requirements that no longer reflect the modern financial system, clarify and codify recent OCC interpretations, integrate certain regulations for national banks and federal savings associations (FSA), and make other technical and conforming changes. Comments on the proposal are due by August 3, 2020.

Highlights

The notice of proposed rulemaking would propose the following changes, among others:

• Incorporate and streamline OCC interpretations addressing permissible derivatives activities for national banks.
• Codify OCC interpretations to permit national banks and FSAs to engage in certain tax equity finance transactions.  
• Codify OCC interpretations regarding national bank membership in payment systems and clarify that FSAs are subject to the same requirements as national banks.
• Expand the ability of national banks to choose corporate governance provisions under state law.
• Clarify the extent to which a national bank may adopt anti-takeover provisions permissible under state corporate governance law.
• Codify OCC interpretations of the National Bank Act relating to capital stock issuances and repurchases.
• Clarify when national bank participation in a financial literacy program on the premises of, or a facility used by, a school or other organization would not be a branch.
• Apply rules relating to indemnification, equity kickers, postal services, independent undertakings, and hours and closings to FSAs.

Background

Consistent with safety and soundness, the OCC periodically reviews its regulations to eliminate outdated or otherwise unnecessary regulatory provisions and, where possible, to clarify or revise requirements imposed on national banks and FSAs. These reviews are in addition to the OCC’s decennial review of its regulations as required by the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA). These reviews also consider, where appropriate, opportunities to integrate rules that apply to national banks with similar rules that apply to FSAs. This proposed rule is a continuation of the OCC’s regulatory review process and accompanies other OCC efforts to modernize OCC rules, remove unnecessary burden, and clarify requirements, including proposed revisions to 12 CFR 5, “Licensing Amendments” published in the Federal Register on April 2, 2020 (85 FR 18728), and an advance notice of proposed rulemaking that requests comment on revising the OCC’s regulations at 12 CFR 7, subpart E, and 12 CFR 155 regarding the use of digital technology by national banks and FSAs issued concurrently with this proposed rule.

Further Information

Please contact Beth Kirby, Assistant Director, Valerie Song, Assistant Director, or Heidi Thomas, Special Counsel, Chief Counsel’s Office, at (202) 649-5490.

Jonathan V. Gould
Senior Deputy Comptroller and Chief Counsel

Related Link

• “Activities and Operations of National Banks and Federal Savings Associations ” (PDF)