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News Release 2016-161 | December 28, 2016

OCC Final Rule Prohibits Bank and Thrift Dealing and Investing in Industrial or Commercial Metals

WASHINGTON—The Office of the Comptroller of the Currency (OCC) submitted to the Federal Register a final rule to prohibit national banks and federal savings associations (FSAs) from dealing or investing in industrial or commercial metals.

The final rule covers metal, including alloy, in a physical form primarily suited to industrial or commercial uses. Examples include copper cathodes and aluminum T-bars. The final rule supersedes a prior OCC determination permitting national banks to trade copper.

The rule continues to recognize that national banks and FSAs may hold industrial or commercial metal under authorities that are distinct from dealing and investing and does not change those authorities. For example, national banks and FSAs may acquire industrial or commercial metal through foreclosures on loans and then sell the metal to mitigate loan losses.

The rule carries out an OCC recommendation included in its report to Congress and the Financial Stability Oversight Council under section 620 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Section 620 required the federal banking agencies to conduct a study of the activities and investments that banking entities may engage in under state and federal law and to consider the associated risks and how banking entities mitigate those risks.

The effective date of the final rule is April 1, 2017. Banks with existing holdings of industrial and commercial metal acquired through dealing or investing activities must divest of such metal as soon as reasonably practical, but no later than five years.

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