OCC 2000-20
Subject: Uniform Retail Credit Classification
         and Account Management Policy
Description: Policy Implementation
Date: June 20, 2000


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


PURPOSE

On June 12, 2000 the Federal Financial Institutions Examination 
Council published in the Federal Register a final notice that 
revised the Uniform Retail Credit Classification and Account 
Management Policy originally published in the Federal Register 
on February 10, 1999.  The Office of the Comptroller of the 
Currency is adopting the revised policy and will apply it to 
all national banks and their operating subsidiaries.  
OCC Bulletin 99-13 is hereby rescinded.


POLICY

The policy establishes standards for classification and account 
management of retail credit in banks and thrifts.  It generally 
requires that closed-end loans be charged off when 120 days 
past due and that open-end credit be charged off when 180 
days past due.  Other important provisions of the policy include:

o Criteria for classifying delinquent residential mortgage 
  and home equity loans;
o Charge-off criteria for bankrupt obligors, deceased obligors, and fraud;
o Limits and criteria for re-aging open-end credit; and
o Guidance for controlling the use of extensions, deferrals, 
  renewals, and rewrites of closed-end loans.

The final policy contains revisions adopted in response to 
comments and requests for clarification from the banking 
industry and consumer groups.  The final policy:

o Requires banks to establish explicit standards that control 
  the use of extensions, deferrals, renewals, and rewrites for 
  closed-end loans;
o Allows an additional re-age of open-end credits in formal 
  workout or debt management programs that meet all other 
  re-aging requirements; and
o Extends the charge-off time frame for open-end and closed-end 
  retail loans secured by one- to four-family residential real 
  estate to 180 days past due.

The policy allows examiners to classify retail credits that exhibit 
signs of weakness regardless of their delinquency status, and to 
classify entire retail portfolios where underwriting standards are 
weak and present unreasonable credit risk. 


IMPLEMENTATION

The policy should be fully implemented for the reporting period 
ending December 31, 2000. 

Re-aging of open-end loans that occur prior to implementation 
do not count toward the once-in-twelve months/twice-in-five 
years limitation.  However, examiners should review a bank's 
record of re-aging accounts to ensure that the use of this 
practice was not excessive prior to the implementation date.

For further information contact the Credit Risk Division, (202) 874-5170.




______________________________
David D. Gibbons
Deputy Comptroller for Credit Risk

Attachment -- 65 FR 36903 (June 12, 2000)