OCC 2002-45
OCC Bulletin

Subject:     Accrued Interest Receivable
Description: Accounting for the Accrued Interest Receivable Asset

Date:        December 4, 2002

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

The attached 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 accounting treatment 
for banking organizations that securitize credit card receivables 
and record an 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.  This guidance is consistent with OCC Bulletin 
2002-17, which specifies the risk-based capital treatment for these 
assets.

The agencies expect institutions to follow the accounting guidance 
specified in this advisory with the next regulatory report that is 
filed.  Institutions that have been properly accounting for the AIR 
asset as a retained subordinated interest are expected to continue 
to do so.

If you have questions about the appropriate accounting for the AIR, 
please contact Thomas Rees, Office of the Chief Accountant at 
(202) 874-5411.



____________________
Mark L. O’Dell 
Deputy Comptroller
Core Policy


____________________
Zane D. Blackburn
Chief Accountant

Attachment
[ http://www.occ.treas.gov/ftp/bulletin/2002-45a.pdf ]