Comments due on OCC activities and transactions proposal

The OCC has announced a proposal to amend its rules relating to policies and procedures for corporate activities and transactions involving national banks and federal savings associations. Specifically, the proposal would update and clarify the policies and procedures, eliminate unnecessary requirements consistent with safety and soundness, and make other technical and conforming changes. The proposed rule has a comment period ending on May 4, 2020.

The proposal would, among other changes:

• Make the definition of “well managed” consistent for all filing types.
• Eliminate the filing requirement for FSAs that adopt without change the OCC’s model or optional bylaws.
• Add numerous provisions to 12 CFR 5.33 permitting national banks and FSAs to elect to follow the procedures applicable to state banks or state savings associations, respectively, for certain business combinations.
• For operating subsidiaries:
  • Permit an eligible operating subsidiary of a qualifying national bank or FSA to engage in an activity that is substantively the same as a previously approved bank or FSA activity, respectively, by filing a notice with the OCC (national banks) or an application through expedited review (FSAs).
  • Remove the annual national bank operating subsidiary reporting requirement.
• For non-controlling investments by a national bank and pass-through investments by an FSA:
  • With prior OCC approval, permit investments in enterprises that have not agreed to OCC supervision.
  • Provide an expedited review procedure for these investments under certain conditions.
  • Expand the investments eligible for notice.
  • Permit investments without a filing in enterprises conducting activities limited to those previously reported by the national bank or FSA in a previous non-controlling investment or pass-through investment filing.
• Provide procedures for granting and revoking citizenship and residency waivers for national bank directors.
• Permit national banks to request approval for a reduction in capital over more than four quarters.
• Change the definition of “troubled condition” for purposes of changes in directors and senior executive officers to align with OCC supervisory practices. The updated definition would specify that an enforcement action (a cease-and-desist order, consent order, or formal written agreement) must require the national bank or FSA to improve its financial condition for it to be considered in “troubled condition” solely as a result of the enforcement action.