OCC 2004-5
OCC Bulletin

Subject:      Fundamental Change in Asset Composition of a Bank
Description:  Notice of Proposed Rulemaking
 
Date:         January 13, 2004

TO:  Chief Executive Officers of All National Banks, Department and 
     Division Heads, All Examining Personnel and Other Interested Parties

The Comptroller of the Currency (OCC) has issued a notice of proposed 
rulemaking (NPRM) that would require a national bank to obtain the 
approval of the OCC before the following two types of fundamental changes 
in the composition of the bank’s assets occurs: (1) selling or otherwise 
disposing of all, or substantially all, of its assets to become a 
“stripped” or dormant bank charter, or, (2) after having “stripped” the 
charter of assets, subsequently purchasing or otherwise acquiring assets.  
The notice was published in the Federal Register on January 7, 2004.  
The comment period will end on March 8, 2004.

Specifically, the proposal would add a new section 5.53 to part 5 of OCC 
regulations that would require a national bank to file an application and 
obtain the OCC’s prior written approval before changing the composition 
of all, or substantially all, of its assets through (1) sales or other 
disposition or, (2) after having sold or disposed of all or substantially 
all of its assets, through purchases or other acquisitions.  This new 
approval requirement, however, would not apply to a change in composition 
of a bank’s assets that the bank undertakes in response to direction from 
the OCC (e.g., in an enforcement action pursuant to 12 USC 1818) or 
pursuant to a statute or regulation that requires OCC review or approval 
(e.g., a voluntary liquidation pursuant to 12 USC 181 and 12 CFR 5.48).  
A bank that has disposed of all or substantially all of its assets before 
the effective date of this regulation would have to comply with the prior 
approval requirement if it purchases or otherwise acquires or takes on 
new assets after the regulation takes effect.

When reviewing an application under this new requirement, the OCC would 
consider the purpose of the transaction, its impact on the safety and 
soundness of the bank, and any effect on the bank’s customers, and may 
deny the request for approval if the transaction would have a negative 
effect in any such respect.  In addition, the OCC’s review of an 
application in connection with any subsequent growth in assets of a 
stripped charter would include, among other things, the factors governing 
the organization of a de novo bank under 12 CFR 5.20. 

For further information, contact Heidi M. Thomas, special counsel, 
Legislative and Regulatory Activities Division at (202) 874-5090 or Jan 
Kalmus, NBE/senior licensing analyst, Licensing Policy and Systems at 
(202) 874-5060.


_____________________________________
Julie L. Williams
First Senior Deputy Comptroller and Chief Counsel

Attachment:  69 FR 892  
             [http://www.occ.treas.gov/fr/fedregister/69fr892.pdf]