NR 96-145
  December 18, 1996
  
                OCC ISSUES REGULATION ON LEASING
  
  WASHINGTON, D.C. -- The Office of the Comptroller of the
  Currency (OCC) published a final rule in today's Federal
  Register on part 23 of its regulations on personal property
  leasing by national banks.  The final rule is another component
  of the OCC's regulation review program to update and streamline
  OCC regulations and to reduce unnecessary regulatory costs and
  other burdens.
  
  The final rule gives national banks new authority to acquire
  personal property for leasing before the bank enters into or
  arranges a specific leasing transaction, subject to two
  prudential limits designed to ensure that the acquisition is
  not speculative.  First, the amount of personal property a
  national bank may acquire under this provision is capped at 15
  percent of bank capital and surplus.  Second, the acquisition
  must be consistent with the bank's existing leasing business or
  with a business plan for its leasing activities.
  
  The final rule also addresses holding periods related to
  leasing.  When leases expire, a national bank must re-lease or
  dispose of the leased property, as soon as practicable, but no
  later than a certain period of time.  The final rule changes
  that period of time from two to five years.  This change
  mirrors the 5-year disposition period that applies both to
  repossessed real estate under rules for other real estate owned
  (OREO), and to securities acquired in satisfaction of debts
  previously contracted.  The 5-year period can be extended but
  only if the national bank can make a clearly convincing
  demonstration of the need for an extension.
  
  In addition, the final rule provides that the OCC will continue
  to decide on a case-by-case basis new activities that may be
  incidental to lease financing. 
                             # # #
  
  The OCC charters, regulates and supervises approximately 2,800 national
  banks and 66 federal branches and agencies of foreign banks in the U.S.,
  accounting for more than half the nation's banking assets.  Its mission is
  to ensure a safe, sound and competitive national banking system that
  supports the citizens, communities and economy of the United States.