OCC 2002-17
OCC Bulletin
Subject:     Accrued Interest Receivable
Description: Regulatory Capital and Accrued Interest 
             Receivable Assets
Date:        May 17, 2002

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

The enclosed Interagency Advisory issued by the Office of 
the Comptroller of the Currency, Board of Governors of 
the Federal Reserve System, Federal Deposit Insurance 
Corporation, and Office of Thrift Supervision clarifies 
the appropriate risk-based capital treatment for banking 
organizations that securitize credit card receivables and 
record an on-balance sheet asset commonly referred to as 
an Accrued Interest Receivable (AIR).  The AIR consists 
of fees and finance charges that have been accrued on 
receivables that the banking organization has securitized 
and sold to other investors.  In general, the AIR 
represents a subordinated retained interest in cash flows 
that are initially allocated to the investors' portion of 
a credit card securitization, which is subject to higher 
capital requirements under the agencies' capital standards 
than many institutions are currently applying to this 
asset.  

The agencies expect institutions to hold capital for AIR 
assets consistent with the agencies' positions articulated 
in this advisory by no later than December 31, 2002, 
unless supervisory concerns warrant an institution's 
earlier application of this advisory.  Institutions that 
have been properly reflecting the AIR as a credit 
enhancement for risk-based capital purposes are expected 
to continue to do so.

If you have AIR-related risk-based capital questions, 
please contact Amrit Sekhon, Capital Policy Division at 
(202) 874-5211.  If you have AIR-related accounting 
questions, please contact Tom Rees, Office of the Chief 
Accountant at (202) 874-5411.



		
Michael L. Brosnan
Deputy Comptroller
Risk Evaluation



Tommy Snow
Director
Capital Policy


Attachment
[ http://www.occ.treas.gov/ftp/bulletin/2002-17a.pdf ]
[ http://www.occ.treas.gov/ftp/bulletin/2002-17a.txt ]