EC - 256
EXAMINING ISSUANCE
Comptroller of the Currency
Administrator of National Banks
Type:  Examining Circular
Subject:  Asset Management

TO:  Department and Division Heads and All Examiners

PURPOSE

Banking Circular 254, issued June 14, 1991, summarizes the OCC's policy of
allowing national banks and their operating subsidiaries to engage in
asset management. This document provides further guidance to OCC examining
personnel for assessing asset management activities, in national banks. It
discusses asset management contracting, provides guidelines relating to
operational, financial and legal risks associated with asset management
activities, and contains sample supervisory questions addressing a
national bank's ability to engage in this activity.

BACKGROUND

Asset management has become a specialized line of business enabling
national banks to use their expertise to manage asset portfolios. The OCC
has determined that, under certain circumstances, national banks can
engage in asset management for other banks, savings associations, or
government agencies, such as the Federal Deposit Insurance Corporation
(FDIC) or the Resolution Trust Corporation (RTC).

SUMMARY

These guidelines address the operational risks, financial risks, and legal
risks associated with asset management. Other risks include imprudent
lending practices and potential conflicts of interest. Examiners should
use these guidelines in supervising national banks and their operating
subsidiaries engaged in asset management.

ORIGINATING OFFICE

Questions about this circular may be directed to the Office of the Chief
National Bank Examiner, 202-874-4447.

Donald G. Coonley
Chief National Bank Examiner

Attachment

Date:  June 14, 1991