Office of the Comptroller of the Currency (OCC)

The Office of the Comptroller of the Currency is the federal agency that charters, regulates, and supervises national banks and federal savings associations — approximately 1,100 institutions holding roughly two-thirds of all U.S. commercial banking assets. Created in 1863 during the Civil War to establish a national currency and banking system, the OCC is an independent bureau within the Treasury Department, funded entirely by assessments on the banks it supervises rather than congressional appropriations.

Current Law (2026)

Legal Authority

• 12 U.S.C. § 1 — Office of the Comptroller of the Currency (establishes the OCC in the Treasury Department; the Comptroller is appointed by the President with Senate confirmation)
• 12 U.S.C. § 2 — Comptroller's term (5-year term; may be reappointed)
• 12 U.S.C. § 21 — Formation of national banks (five or more persons may form a national banking association by filing articles of association and an organization certificate with the Comptroller)
• 12 U.S.C. § 24 — Corporate powers of national banks (enumeration of powers: receiving deposits, making loans, buying and selling securities, and other banking activities as approved by the Comptroller)
• 12 U.S.C. § 93a — Authority to prescribe rules and regulations (Comptroller may prescribe rules governing the operations and activities of national banks)

How It Works

The OCC is one of the three primary federal banking regulators (alongside the Federal Reserve and the FDIC), but its jurisdiction is specific: national banks (those with "National" in their name or "N.A." after their name) and federal savings associations (formerly regulated by the Office of Thrift Supervision, which was merged into the OCC by the Dodd-Frank Act).

Chartering is the OCC's gateway function. When a group wants to establish a new national bank, they apply to the OCC, which evaluates the proposed bank's business plan, capital adequacy, management team, community needs assessment, and compliance infrastructure. The Comptroller has sole authority to grant or deny national bank charters — a power that has been exercised to create new types of banking institutions, including the OCC's 2020 decision to offer "fintech charters" to technology companies performing bank-like functions.

Supervision of existing banks involves continuous monitoring and periodic on-site examinations. OCC examiners — approximately 2,500 bank examiners nationwide — evaluate banks' safety and soundness, risk management, compliance with consumer protection laws, Bank Secrecy Act/anti-money-laundering compliance, and Community Reinvestment Act performance. Proprietary-trading limits imposed by the Volcker Rule are also part of the modern examination agenda for large national banks. The largest national banks (JPMorgan Chase, Bank of America, Wells Fargo, Citibank) have dedicated teams of OCC examiners permanently stationed on-site.

Federal preemption is one of the most consequential and controversial aspects of national bank regulation. National banks operate under a federal charter and are primarily governed by federal law, which preempts certain state laws — including some state consumer protection, lending, and licensing requirements. This preemption gives national banks operational uniformity across all 50 states but has drawn criticism from state regulators and consumer advocates who argue it weakens consumer protection.

Enforcement powers are broad: the Comptroller can issue cease-and-desist orders, impose civil money penalties, remove officers and directors, and ultimately revoke a bank's charter. These enforcement tools — combined with the OCC's continuous supervisory presence — create strong incentives for compliance.

The OCC is entirely self-funded through assessments on the banks and savings associations it supervises, plus fees for corporate applications and services. This financial independence from congressional appropriations gives the OCC operational stability but raises questions about regulatory capture — the agency's revenue depends on the industry it regulates.

How It Affects You

If you're a consumer doing business with a bank: First, determine whether your bank is OCC-regulated. Look for "National" in the bank's name (e.g., "First National Bank"), or "N.A." (National Association) after the name (e.g., "JPMorgan Chase Bank, N.A."). If you see those identifiers, the OCC is the primary federal supervisor. For banks without those identifiers — including many community banks with state charters — the primary supervisor is either the FDIC (for non-member state-chartered banks) or the Federal Reserve (for state member banks).

Why it matters for your complaint routing: If you have a complaint about your national bank — a billing error, unfair fee, discriminatory practice, or deceptive product — you can file a complaint with the OCC's Customer Assistance Group at helpwithmybank.gov. The OCC reviews complaints against national banks and can intervene with the bank on your behalf. For complaints against any bank involving consumer protection violations (TILA, ECOA, FDCPA, FCRA), the CFPB at consumerfinance.gov/complaint is often a parallel route. The CFPB and OCC have coordinated enforcement jurisdiction over large national banks.

Federal preemption's practical effect on you: Because national banks operate under federal charters, OCC regulations preempt certain state consumer protection laws. This means that if your state has stronger consumer protection rules on loan fees, prepayment penalties, or lending practices, those state rules may not apply to your national bank. This has been particularly consequential for mortgage lending — state anti-predatory lending laws have been preempted as applied to national bank mortgage operations. The Dodd-Frank Act (2010) partially rolled back OCC preemption, requiring case-by-case analysis rather than blanket preemption, and allowing states to enforce their own fair lending laws against national banks in individual cases (though the basic framework of federal chartering and OCC examination remains).

If you're a national bank executive, director, or compliance officer: Your relationship with the OCC is continuous — not just periodic. For the largest national banks (those with $100B+ in assets), the OCC maintains resident examination teams permanently on-site, conducting ongoing monitoring. For community and mid-size national banks, examination cycles typically run 12-18 months for safety and soundness, with separate consumer compliance examinations.

OCC examinations evaluate banks on a framework similar to the FDIC's CAMELS rating: capital adequacy, asset quality, management, earnings, liquidity, and sensitivity to market risk. Examination findings are issued in a confidential Report of Examination (ROE) — management must respond in writing to any criticisms. Findings escalate into enforcement mechanisms: matters requiring attention (MRAs) require documented corrective action; formal enforcement instruments (cease-and-desist orders, civil money penalties) are public and significantly more severe. Personal liability for officers and directors is real — the OCC can issue prohibition orders barring individuals from banking industry participation and impose personal civil money penalties under 12 U.S.C. § 1818. For enforcement actions: challenge examination findings through the OCC's Supervisory Appeals Process before formal enforcement if you believe the examination conclusion is incorrect — the OCC has an ombudsman and a formal appeal process that is a prerequisite to some types of review. See OCC guidance at occ.gov/publications-and-resources.

If you're a fintech company or startup exploring banking: The OCC's fintech charter (Special Purpose National Bank Charter) offers a pathway for technology companies that want to operate as a national bank — potentially accessing the federal preemption framework, payment system access, and national bank powers — without taking deposits (which requires FDIC insurance and full bank charter). The fintech charter has been contested in court by state regulators (the Conference of State Bank Supervisors and NYDFS), who argue that only deposit-taking entities qualify for national bank charters; the legal battle over OCC's fintech charter authority continues as of 2026.

The more established pathway for fintech market access: partner banking (also called "bank-as-a-service" or BaaS), where a fintech companies offers financial products under a partner bank's charter and OCC/FDIC licenses without needing its own charter. Review OCC's Innovation Pilot Program and Responsible Innovation Framework at occ.gov/topics/responsible-innovation for guidance on novel business models. For crypto-related banking activities: OCC has issued interpretive letters (OCC Interpretive Letter 1179, 1183) confirming that national banks may custody cryptocurrency assets and use blockchain and stablecoin networks for payments — subject to conditions and safety and soundness standards. Obtain an OCC interpretive letter for any novel crypto activity before proceeding.

State Variations

The OCC-state relationship is defined by the dual banking system:

• National banks operate under federal charter; state-chartered banks operate under state charter
• National banks are primarily subject to federal law, with preemption of some state laws
• State-chartered banks are supervised by their state regulator plus the FDIC (if not Fed members) or Federal Reserve (if Fed members)
• The Dodd-Frank Act limited some federal preemption, requiring case-by-case analysis rather than blanket preemption
• Both national and state-chartered banks must comply with federal consumer protection laws (TILA, ECOA, FCRA, etc.)

Implementing Regulations

• 12 CFR Part 3 — Capital Adequacy Standards: the OCC's implementation of the Basel III international capital framework for national banks and federal savings associations. Key provisions:

  • § 3.10 — Minimum capital ratios: every national bank must maintain at least (1) a Common Equity Tier 1 (CET1) ratio of 4.5% (high-quality equity capital — common stock, retained earnings); (2) a Tier 1 capital ratio of 6% (CET1 plus additional Tier 1 instruments like noncumulative preferred stock); and (3) a Total capital ratio of 8% (Tier 1 plus Tier 2 subordinated debt, allowances for credit losses, etc.); and (4) a leverage ratio of 4% (Tier 1 to average total consolidated assets). Banks that fall below these minimums are subject to prompt corrective action (PCA) — a mandatory escalating series of restrictions culminating in receivership if the bank is "critically undercapitalized"
  • § 3.11 — Capital conservation buffer: on top of the minimums, banks must maintain a 2.5% CET1 capital conservation buffer; if a bank's buffer falls below 2.5%, it faces automatic restrictions on capital distributions (dividends, share buybacks) and discretionary bonus payments to executives — the buffer is designed to build up capital in good times that can be drawn down during stress without formal regulatory intervention; the countercyclical capital buffer (0%–2.5% additional CET1) can be activated by regulators in periods of excess credit growth
  • Subpart D (§§ 3.30–3.54) — Standardized approach for risk-weighted assets: assigns risk weights to different asset categories — U.S. government obligations carry 0% weight (zero capital required), residential mortgages carry 50% weight, commercial loans carry 100%, exposures to foreign sovereigns or banks vary by OECD membership; the standardized approach determines how much capital a bank must hold against each type of asset it holds
  • Subpart E (§§ 3.100–3.133) — Advanced approaches (IRB): large, internationally active banks with $250B+ in assets must use internal models to estimate probability of default and loss given default; these banks must also calculate a supplementary leverage ratio and a countercyclical buffer; the advanced approaches typically produce lower risk weights for well-underwritten loans, creating a competitive advantage for large banks

  The capital framework sets the floor for safety and soundness — a bank with inadequate capital cannot absorb losses without becoming insolvent. The Basel III implementation represented a significant tightening after the 2008 financial crisis revealed that banks had inadequate capital buffers. The Basel III "endgame" rule proposing further increases to capital requirements for large banks was proposed in 2023 and substantially scaled back in 2024 after significant industry opposition.

• 12 CFR Part 7 — Activities and Operations (69 sections — OCC's authoritative statement of what national banks and federal savings associations are permitted to do under their charters; implements the "business of banking" concept from 12 U.S.C. § 24). Key provisions:

  • § 7.1000 — Activities that are part of, or incidental to, the business of banking: the foundational rule; national banks may engage in any activity that is part of banking or is incidental to the business of banking — a functional standard that OCC interprets over time as new financial products emerge; banks do not need explicit statutory authority for every activity, only a reasonable connection to banking
  • § 7.1001 — Insurance agency: national banks may act as general insurance agents under 12 U.S.C. § 92, selling any type of insurance product in towns with populations under 5,000; OCC interpretive letters have extended this authority to larger markets under specified conditions; a significant competitive issue between banks and independent insurance agents
  • § 7.1002 — Finder services: a national bank may act as a "finder" — identifying and bringing together buyers and sellers of financial products and services for a fee — as an incidental banking activity; finder services include referring customers to third-party investment, insurance, or other financial products; the bank must disclose its finder role and any compensation received
  • § 7.1003 — Loan production offices: national banks may establish loan production offices (LPOs) — offices that accept and process loan applications but do not disburse funds or accept deposits; LPOs enable banks to reach borrowers in geographies beyond their branch network; LPOs are not "branches" under 12 U.S.C. § 36 and do not require OCC branch opening approval
  • § 7.1006 — Profit-sharing and equity kicker loans: a national bank may enter a loan agreement that gives the bank a share in the borrower's profits, income, or earnings, or receive stock warrants, as additional loan compensation; this authority enables banks to participate in startup and venture lending where upside equity participation is part of the deal structure; subject to lending limit restrictions
  • § 7.1008 — Tax return preparation: a national bank may prepare federal and state income tax returns for its customers and the public as a fee-based incidental activity — it connects naturally to the bank's record-keeping relationship with customers; this authority extends to electronic filing
  • § 7.1010 — Postal services: national banks and federal savings associations may provide postal services (postage stamps, money orders, postal products) through their offices as an incidental convenience to customers

  Part 7 reflects OCC's long-standing doctrine that the "business of banking" is not frozen in time — new activities that have a functional connection to banking may be authorized through interpretive letters and rulemakings as financial services evolve. This has been the basis for OCC interpretive letters authorizing national banks to engage in derivatives dealing, custody of digital assets, participation in blockchain-based payment networks, and other activities not explicitly listed in the National Bank Act. Recent rulemakings: March 2026 amendment clarifying national bank trust company chartering authority; prior significant amendments in 86 FR 4967 (January 2021) updating activities standards.

• 12 CFR Part 9 — Fiduciary Activities of National Banks (21 sections — the OCC's comprehensive operational standards for national banks and Federal branches acting in any fiduciary capacity; authority: 12 U.S.C. § 24 (Seventh) and § 92a, and 15 U.S.C. § 78q):

  National banks have been authorized since the National Bank Act to act as fiduciaries — trustees, executors, administrators, guardians, custodians, and registrars of stocks and bonds. When a national bank accepts a fiduciary appointment, it assumes the legal duties of loyalty and care that apply to any fiduciary under applicable state trust law, plus the OCC overlay standards in Part 9. OCC approval under § 5.26 is required before a national bank may accept its first fiduciary appointment.

  • § 9.2 — Fiduciary capacity defined: a bank acts in a "fiduciary capacity" when serving as trustee, executor, administrator, registrar of stocks and bonds, transfer agent, guardian, assignee, receiver, or custodian under a uniform gifts to minors act — or in any court-ordered capacity in which the bank holds or manages assets with a duty of loyalty; pure custody arrangements (holding assets without investment discretion) are generally outside Part 9's scope
  • § 9.10 — Fiduciary funds awaiting investment: a national bank with investment discretion may not leave fiduciary funds uninvested longer than is reasonable for proper account management; the bank may self-deposit waiting funds in its own commercial or savings department, but any amount exceeding FDIC insurance limits must be secured by collateral (eligible investment-grade assets controlled by fiduciary officers, market value equal to or exceeding the uninsured balance at all times) — preventing the bank from using its fiduciary role to gather uninsured deposits at beneficiaries' expense
  • § 9.100 — Dual role as indenture trustee and creditor: a national bank may simultaneously serve as indenture trustee (protecting bondholders) and as a creditor (lending to the bond issuer) for up to 90 days after a default — provided it maintains adequate conflict-of-interest controls between its fiduciary duty to bondholders and its own credit position; after 90 days the conflict must be eliminated or the bank must resign as trustee; this implements the Trust Indenture Act's conflict-of-interest provisions
  • § 9.101 — Investment advice for a fee: a national bank may charge fees for investment advice provided to fiduciary accounts — a core trust department service in which the bank recommends asset allocations and specific securities; fees must be disclosed and comply with applicable law governing fiduciary compensation

  The OCC revised Part 9 in 2017 (82 FR 8105) to update standards for collective investment funds, clarify the distinction between fiduciary and custodial accounts, and modernize record-keeping requirements. The March 2026 Part 5 amendment (91 FR 10498) — clarifying limited-purpose trust company chartering — works directly alongside Part 9, since a limited-purpose trust company's entire business consists of fiduciary activities governed here. Recent rulemakings: 82 FR 8105 (January 2017) — comprehensive Part 9 revision; 86 FR 28241 (May 2021) — technical amendments.

• 12 CFR Part 4 — Organization and Functions, Availability and Release of Information, Post-Employment Restrictions for Senior Examiners — the OCC's rules governing public information access, confidential supervisory information protection, and the revolving door restrictions that apply to senior bank examiners. Key provisions:

  • Subpart A — Organization and Functions: describes the OCC's principal offices (Washington HQ; four district offices in Chicago, Dallas, Denver, and New York; and examining staff deployed nationally) and provides the OCC's public address for correspondence; the OCC absorbed the Office of Thrift Supervision (OTS) in 2011 under Dodd-Frank, and Subpart A describes how OCC absorbed the OTS's regulatory functions for federal savings associations
  • Subpart B — Freedom of Information Act: governs public access to OCC records under 5 U.S.C. § 552; OCC's FOIA rules are notable for the breadth of the bank examination exemption — § 4.12(b) authorizes the OCC to withhold records that are exempt from FOIA under exemptions 4 (confidential commercial information), 5 (deliberative process), 6 (personal privacy), 7 (law enforcement), and 8 (examination reports of financial institutions — the explicit bank safety-and-soundness exemption in FOIA); the bank examination exemption (Exemption 8) is broad and protects OCC examination reports, CAMELS ratings, Matters Requiring Attention (MRAs), and supervisory correspondence from public disclosure; this is why a bank's regulatory exam rating is not public information and why FOIA requests to the OCC for examination-related records are almost always denied
  • Subpart C — Release of Non-Public OCC Information: governs third-party and judicial requests for non-public OCC supervisory information; when a subpoena or civil discovery request targets OCC records, the OCC evaluates whether disclosure is appropriate and may assert supervisory privilege; Touhy regulations — named after United States ex rel. Touhy v. Ragen (1951) — require anyone seeking OCC testimony or documents in litigation to submit a request to the OCC under Part 4; the OCC may decline to provide testimony or documents if disclosure would interfere with its supervisory functions; these procedures frequently arise in litigation between banks and their shareholders, creditors, or counterparties who want access to OCC examination findings
  • Subpart E — One-Year Restrictions on Post-Employment Activities of Senior Examiners: the OCC's revolving door restrictions, implementing 12 U.S.C. § 1820(k) — the senior bank examiner post-employment statute. Key provisions:
    • Definition of "senior examiner": an OCC employee who served as (a) the examiner-in-charge (EIC) of the examination of a bank with $250 million or more in assets, OR (b) the primary supervisory contact for a bank, for at least 2 months in the 12-month period before leaving the OCC
    • 1-year restriction: for 1 year after leaving the OCC, a former senior examiner may not communicate with the OCC on behalf of the bank that was the subject of their examination responsibilities, may not participate in any matter involving that bank in which the examiner personally participated while at OCC, and may not represent or assist any person in a matter involving that bank before the OCC or any federal banking agency
    • Criminal penalties: violation of the restriction is a federal crime under 12 U.S.C. § 1820(k)(5) — up to 1 year imprisonment and/or a $50,000 fine; this is a strict liability criminal statute, not a civil penalty scheme
    • Coverage: the restriction applies to national banks and federal thrift institutions (OCC-chartered); parallel restrictions exist for bank examiners at the FDIC, Federal Reserve, and state banking regulators under their own statutes and regulations
    • Policy rationale: bank examiners develop deep, confidential knowledge of a bank's financial condition, internal controls, and regulatory vulnerabilities — the restriction prevents that knowledge from being immediately exploited in an advocacy capacity; the 2-month threshold means the restriction applies only to examiners who developed meaningful institutional knowledge, not casual contacts

• 12 CFR Part 32 — Lending Limits: the OCC's binding cap on how much a national bank or federal savings association may lend to a single borrower, implementing the statutory single-borrower limit in 12 U.S.C. § 84. Key provisions:

  • § 32.3 — Combined general limit: total outstanding loans and extensions of credit to any one borrower may not exceed 15% of the bank's capital and surplus; an additional 10% of capital and surplus is available for loans and extensions of credit fully secured by "readily marketable collateral" (exchange-listed securities, certain bullion) — yielding a maximum exposure of 25% of capital to any single borrower when the additional collateral tranche is used
  • § 32.5 — Combination rules: loans to nominally separate borrowers must be combined and treated as a single borrower when (a) loan proceeds benefit the other party, (b) a common enterprise exists, or (c) the borrower depends financially on the other — preventing evasion by routing credit through related entities; attribution is mandatory, not discretionary
  • § 32.7 — Supplemental Lending Limits Program: a bank may apply to OCC for authority to extend an additional 10% of capital in credit to one borrower, beyond the standard 15%/25% limits, exclusively for residential real estate loans, loans to small businesses (revenues under $1 million), and loans or extensions of credit to small farms; the supplemental program was designed to facilitate community lending without compromising single-borrower concentration limits generally
  • § 32.8 — Emergency lending: with OCC written approval, a bank may make temporary credit arrangements exceeding its normal lending limits to support eligible institutions in emergency situations (e.g., a correspondent bank facing liquidity stress) — a safety valve for systemic situations where normal limits could exacerbate an emergency
  • § 32.9 — Derivatives and securities financing: credit exposure arising from derivative transactions (interest rate swaps, credit default swaps) and securities financing transactions (repos, reverse repos, securities lending) counts toward the borrower's single-borrower limit, calculated using the current exposure method or internal model method; this provision closes the gap that would otherwise allow a bank to have massive credit exposure to a counterparty through derivatives while reporting zero loans outstanding

  The 15% single-borrower limit is one of the oldest and most fundamental rules in U.S. banking law, tracing to the National Currency Act of 1863 — the original national bank statute. The policy rationale is diversification: a bank that concentrates 30-40% of its loan portfolio in one borrower risks insolvency if that borrower defaults. The combination rules are the most litigated aspect of Part 32, as banks and examiners frequently dispute whether nominally separate borrowers share enough financial interdependence to require aggregation. Recent rulemakings: 80 FR 28479 (2015) added the derivatives/securities financing exposure calculation methodology under § 32.9, reflecting the growth of non-loan credit exposure at large banks.

• 12 CFR Part 5 — Rules, Policies, and Procedures for Corporate Activities (53 sections across 6 subparts — the OCC's licensing rulebook governing structural decisions by national banks and federal savings associations: forming, expanding, converting, and winding down their corporate structures):

  Subpart B — Initial Activities (§§ 5.20–5.26):

  • § 5.20 — Organizing a national bank: applicants must file a charter application including a detailed business plan, proposed capital levels, background information on organizers, and a Community Reinvestment Act (CRA) assessment area description; the OCC's prefiling process is strongly encouraged — OCC staff review draft applications before formal submission to identify deficiencies; the OCC has 120 days to act on a complete application; interim national banks may receive conditional approval before opening; amended March 2026 (91 FR 10498) to clarify trust company authority
  • §§ 5.23–5.25 — Charter conversions: a state bank may convert to a national bank charter (§ 5.24); a national bank may convert to a state charter (§ 5.25); a mutual savings institution may convert to a federal stock savings association; conversions require a shareholder/member vote, OCC application, and demonstration that the converting institution meets OCC capital and safety standards; conversion is subject to CRA commitments carried over from prior charter
  • § 5.26 — Fiduciary powers: a national bank must apply for and receive OCC approval before accepting fiduciary appointments (as trustee, executor, guardian, or custodian); the application must show the bank has adequate capital, management, and internal controls for fiduciary business; amended March 2026 to clarify limited-purpose trust company authority

  Subpart C — Expansion of Activities (§§ 5.30–5.39):

  • § 5.30 — Establishing, acquiring, or relocating a branch: a national bank must obtain OCC approval to open a new branch, acquire an existing branch, or relocate an existing branch; most applications qualify for expedited 30-day review (expedited procedures); the OCC considers the bank's financial condition, CRA record, and community convenience; interstate branching (into a state where the bank has no current presence) requires separate analysis under the Riegle-Neal Interstate Banking and Branching Efficiency Act
  • § 5.33 — Business combinations: national bank mergers, consolidations, and purchase-and-assumption transactions require OCC approval; the OCC reviews the financial and managerial resources of both institutions, competitive effects, convenience and needs of the community, CRA performance records, and compliance history; OCC coordinates with DOJ for antitrust review and provides a 30-day public comment period; significantly amended March 2026 (91 FR 10498) to streamline the application process for straightforward affiliate mergers and update the competitive factors analysis
  • § 5.34 — Operating subsidiaries: a national bank may establish or invest in an operating subsidiary to engage in activities permissible for the bank itself; activities conducted through a subsidiary that is majority-owned by the bank must be permissible for a national bank; application or notice required depending on the activity; the OCC treats operating subsidiary activities as equivalent to direct bank activities for examination purposes
  • § 5.39 — Financial subsidiaries: under Gramm-Leach-Bliley Act § 121, "financial in nature" activities (securities underwriting, insurance underwriting, merchant banking) may be conducted through a financial subsidiary — a subsidiary owned by the bank but subject to higher OCC oversight; financial subsidiary authority requires the bank to be "well-capitalized" and "well-managed" and not subject to a Community Reinvestment Act needs-improvement or substantial noncompliance rating

  Subpart D — Other Structural Changes (§§ 5.40–5.55):

  • § 5.46 — Changes in permanent capital: a national bank must file an application or notice to increase or decrease its outstanding capital stock; issuances of stock to insiders or for noncash consideration require prior OCC approval; capital changes must be consistent with the bank's financial condition and strategic plan
  • § 5.47 — Subordinated debt: national banks may issue subordinated debt (qualifying as Tier 2 regulatory capital); issuances exceeding certain thresholds require OCC notice; terms must provide that the debt is subordinate to depositors and general creditors in liquidation
  • § 5.48 — Voluntary liquidation: a national bank may wind up voluntarily only with OCC approval; the OCC requires demonstration that all depositor claims will be satisfied in full; liquidation plans must be implemented under OCC supervision; the OCC may appoint the FDIC as receiver if voluntary liquidation cannot be completed satisfactorily
  • § 5.50 — Change in control: any person seeking to acquire 25% or more of voting shares of a national bank (or 10% under some circumstances) must provide 60 days' advance notice to the OCC; the OCC reviews the financial capacity, management competence, regulatory compliance history, and competitive effects of the proposed acquisition; the OCC may disapprove if the acquirer fails to demonstrate financial capacity to support the bank or if the transaction would have adverse competitive effects
  • § 5.51 — New directors and senior executive officers: national banks and federal savings associations undergoing de novo formation, acquisition, or that are not in satisfactory condition must provide prior notice to the OCC before appointing new directors or senior executive officers; the OCC reviews the proposed individual's background, qualifications, and prior regulatory history; banks in troubled condition face additional requirements

  Subpart E — Dividends (§§ 5.60–5.67):

  • § 5.63 — Capital limitation: a national bank may never declare a dividend that would reduce its permanent capital (common stock plus permanent capital surplus); this is an absolute prohibition, not a business judgment standard — any dividend that would impair permanent capital requires OCC approval under § 5.46's capital reduction procedures
  • § 5.64 — Earnings limitation: a national bank may not pay dividends that exceed net income for the current year plus retained net income for the prior two years, without OCC approval; this prevents banks from draining capital through dividends paid out of reserves rather than current earnings — the most common source of dividend-related supervisory concern
  • § 5.65 — Undercapitalized institution restriction: a national bank that would become "undercapitalized" (as defined in Part 6's Prompt Corrective Action framework) after paying a dividend may not declare or pay that dividend, regardless of whether the earnings limitation would otherwise permit it; this provision directly links dividend policy to the capital adequacy framework

  Part 5 is the OCC's "corporate action" gateway — every significant structural change to a national bank flows through Part 5's application and notice requirements. Unlike bank examinations (which are largely confidential), Part 5 applications are public filings available through the OCC's licensing system at occ.gov, where community groups, competitors, and analysts regularly review merger and branching applications to submit CRA-related comments. The March 2026 comprehensive amendment (91 FR 10498) was the most significant update to Part 5 in years, modernizing the application forms and procedures, updating the competitive analysis framework for mergers to reflect current market conditions, and clarifying the trust company chartering authority that had been the subject of litigation and interpretive debate.

• 12 CFR Part 6 — Prompt Corrective Action: the OCC's implementation of the Prompt Corrective Action (PCA) framework from Section 38 of the Federal Deposit Insurance Act — the mandatory capital-based supervisory intervention system requiring escalating restrictions as a national bank's capital deteriorates. PCA was created by FDICIA (1991) to prevent regulators from allowing insolvent banks to continue operating and gambling for resurrection at depositor expense:

  • § 6.4 — Capital categories: every national bank is assigned one of five capital categories based on its CET1, Tier 1, and Total Risk-Based Capital ratios and leverage ratio: (1) Well Capitalized (CET1 ≥ 6.5%, Tier 1 ≥ 8%, Total ≥ 10%, leverage ≥ 5% — the "gold standard" banks maintain to avoid restrictions); (2) Adequately Capitalized (CET1 ≥ 4.5%, Tier 1 ≥ 6%, Total ≥ 8%, leverage ≥ 4% — minimum requirements without discretionary grounds for PCA actions); (3) Undercapitalized (below adequately capitalized); (4) Significantly Undercapitalized (CET1 < 3%, Tier 1 < 4%, Total < 6%, leverage < 3%); (5) Critically Undercapitalized (tangible equity ≤ 2% of total assets); categories directly determine what the bank may and must do
  • § 6.5 — Capital restoration plans: any bank classified as Undercapitalized must file a written capital restoration plan with OCC within 45 days specifying the steps it will take to become adequately capitalized; the parent holding company must guarantee compliance (up to the lesser of 5% of assets or the amount needed to reach adequately capitalized); a bank whose plan is rejected remains subject to all Undercapitalized restrictions; capital restoration plans are among the most important bank supervisory documents — they commit the institution to specific actions on a schedule reviewable by OCC
  • § 6.6 — Mandatory and discretionary actions: as capital deteriorates, actions become mandatory (not discretionary): Undercapitalized — bank may not pay dividends, may not grow assets more than 5% per year, may not acquire another institution; Significantly Undercapitalized — OCC may require the bank to raise capital, sell shares, restrict or prohibit affiliated transactions, restrict interest rates on deposits, and restrict executive compensation (prohibited from paying bonuses without OCC approval); Critically Undercapitalized — OCC must appoint a receiver or conservator within 90 days unless it determines an alternative action would better protect depositors; the 90-day mandatory receivership trigger for critically undercapitalized banks is one of the most important statutory provisions in banking law — it prevents regulatory forbearance from continuing indefinitely
  • § 6.3 — Capital category notification: the OCC notifies each national bank of its capital category determination; the bank must immediately (generally within 15 days) notify its board of directors; the board must respond — the notification requirement ensures that directors know the bank's capital status and cannot later claim ignorance

  The PCA framework was one of FDICIA's most important reforms, designed to end the regulatory forbearance that allowed savings and loan institutions to continue operating with negative capital during the 1980s thrift crisis, depleting the FSLIC deposit insurance fund. PCA's automatic, rules-based intervention system reduces regulatory discretion — OCC and other banking regulators are required to take increasingly severe actions as capital falls, even if they believe the bank can recover. The Silicon Valley Bank failure (March 2023) renewed scrutiny of whether PCA triggers are calibrated correctly for the interest rate risk and rapid run dynamics of the digital banking era. Recent rulemaking: The NPR on PCA thresholds following FDICIA has been revisited periodically; the current thresholds date to the Basel III-aligned Part 3 capital rules implemented 2013-2019.

• 12 CFR Part 215 — Loans to Executive Officers, Directors, and Principal Shareholders of Member Banks (Regulation O): the Federal Reserve's rule limiting lending by member banks to their own insiders — the "Reg O" regulations implementing Sections 22(g) and 22(h) of the Federal Reserve Act:

  • § 215.4 — General prohibitions and arm's-length requirement: a member bank may not extend credit to any "insider" (executive officer, director, principal shareholder, or any related interest) unless the credit is: (1) made on substantially the same terms (interest rates, fees, collateral, repayment) as those offered to non-insiders for comparable transactions; (2) follows credit underwriting procedures not less stringent than those for comparable loans to non-insiders; and (3) does not involve more than the normal risk of repayment or present other unfavorable features; the arm's-length standard is fundamental — insiders cannot use their position to obtain preferential loan terms that outsiders would not receive
  • § 215.4(c) — Aggregate lending limits: total credit outstanding from a member bank to any single executive officer, director, or principal shareholder and all related interests (companies they control) may not exceed the member bank's lending limit to a single borrower (generally 15% of capital for secured loans, 25% if unsecured); aggregate credit to all insiders combined may not exceed the bank's unimpaired capital and surplus — preventing the bank from concentrating a large share of its lending in its own insiders; the aggregate limit is one of the most important provisions, distinguishing a bank "owned" by insiders from a bank that simply does ordinary business with insiders
  • § 215.5 — Additional restrictions on executive officers: beyond the general Reg O limits, executive officers (CEO, CFO, COO, and others designated by the board) face additional restrictions: credit for purposes other than (a) educational expenses, (b) home purchase or improvement, and (c) preventing financial embarrassment may not exceed $100,000 in total; home mortgage credit may not exceed $250,000; educational loans may not exceed $25,000 per person; these purpose-based limits apply to all extensions of credit, not just new originations
  • § 215.4(b) — Board approval requirement: extensions of credit exceeding the higher of $25,000 or 5% of the bank's unimpaired capital to any one insider must be approved in advance by a majority of the disinterested members of the board of directors with the interested insider not participating; the board approval requirement creates accountability — loans to a powerful insider must clear a vote of their board peers who don't benefit from the transaction
  • § 215.9 — Annual disclosure: member banks must disclose in their annual report to shareholders (or proxy statement) the name of each executive officer and principal shareholder with loans exceeding the threshold amounts, the aggregate amount of credit extended, and the type of credit; this public disclosure is one of the most meaningful transparency requirements in bank regulation — investors and supervisors can see the volume and nature of insider lending

  Regulation O violations have been a recurring feature of bank failures throughout U.S. banking history — from the 1980s thrift crisis (insiders lending to their own businesses at favorable terms, draining capital) to more recent community bank failures. The OCC and Federal Reserve treat Reg O compliance as a safety and soundness priority; banks with significant Reg O violations often find that the insider lending was among the first indicators of broader governance and credit quality problems. The civil penalty for Reg O violations is up to $1 million per day per violation plus forfeiture of profits; criminal penalties under 18 U.S.C. § 1005 (bank fraud) apply for willful violations.

• 12 CFR Part 37 — Debt Cancellation Contracts and Debt Suspension Agreements: the OCC's rules for national banks offering products that cancel or suspend a borrower's loan obligation when a covered event occurs — death, disability, loss of employment, or other specified triggering event. These products function like credit insurance but are structured as bank contracts rather than insurance policies, allowing them to be offered and priced by the bank rather than an insurance company. Part 37 establishes mandatory consumer protections, disclosure requirements, and safety-and-soundness standards for national banks offering these products:

  • § 37.3 — Prohibited practices: (a) Anti-tying — a national bank may not condition any extension of credit on the customer's purchase of a debt cancellation or suspension product; the customer's decision to purchase must be genuinely voluntary; (b) Misrepresentation — the bank may not use advertisements or sales practices that could mislead consumers about the product's benefits, coverage, or costs; (c) Single-premium financing prohibition — if a customer chooses to pay the fee as a single upfront amount, the bank may not add that single premium to the financed amount and charge interest on it without also offering a monthly payment alternative; this provision specifically targets the practice of rolling single premiums into the loan balance, which dramatically inflated the total cost of these products
  • § 37.4 — Refunds on termination or prepayment: if the covered loan is prepaid or the contract is otherwise terminated, the bank must refund any unearned fees using the actuarial method (the same method used for credit insurance refunds) — refunding the pro-rated unused portion of the fee; a flat nonrefundable fee may be charged only if the bank also offers a product with a full actuarial refund; the refund requirement prevents banks from retaining premiums for coverage periods that will never occur
  • § 37.5 — Payment method requirement: a bank may offer single-payment fee structure only if it also offers a genuine monthly/periodic payment alternative; both options must be genuinely available to the customer, not a nominal "alternative" with onerous terms that steer customers to the single-payment version
  • § 37.6 — Mandatory disclosures: at the time of sale, the bank must provide short-form disclosures (and long-form disclosures if the customer requests them) covering: whether the product is optional; the fee or rate; what events trigger the benefit (and what events are excluded); the maximum benefit period; and the fact that the customer can cancel within a stated period; the short form is provided to all customers; the long form — containing full terms and conditions — must be available on request and sent within a reasonable time
  • § 37.7 — Affirmative election requirement: the bank must obtain the customer's written affirmative election to purchase the product before the contract is entered; the election and the acknowledgment of receipt of disclosures must be in writing; they may not be buried in the general loan closing paperwork as a default opt-in; this provision was a direct response to abusive practices where banks enrolled customers in debt cancellation products without their clear agreement and then charged them over the life of the loan
  • § 37.8 — Safety and soundness risk management: national banks must manage the risks of these products consistent with safe and sound banking principles — maintaining adequate loss reserves for cancellation events, monitoring claim rates, and ensuring that the product's risk profile is understood by management; a bank that systematically underprices cancellation risk creates safety and soundness exposure

  Part 37 debt cancellation products were widely offered by national banks in the 1990s–2000s as high-margin add-on products, particularly in auto lending, credit card, and personal loan contexts. The OCC's enforcement actions and Part 37 requirements significantly reduced abusive practices — particularly the single-premium financing prohibition and the affirmative election requirement — that had generated thousands of consumer complaints. Banks continue to offer these products, but the disclosure and anti-tying framework keeps them substantially more transparent than their predecessors. Recent rulemakings: 73 FR 22252 (April 2008) amended Part 37 to address single-premium financing practices; 67 FR 58976 (September 2002) established the original framework.

• 12 CFR Part 160 — Lending and Investment (22 sections — OCC's rules governing the lending and investment powers of federal savings associations (FSAs) under the Home Owners' Loan Act (HOLA), 12 U.S.C. §§ 1462 et seq.; HOLA authority transferred to OCC from the Office of Thrift Supervision in 2011 under Dodd-Frank):

  • § 160.1 — General lending standards: the OCC issued Part 160 under its HOLA rulemaking and supervisory authority; the fundamental expectation is that each savings association will conduct its lending and investment activities in a safe and sound manner; the OCC's approach is principles-based — Part 160 sets the framework while OCC supervisory guidance and examination standards provide operational detail
  • § 160.2 — Applicability of state law: state law applies to FSA lending activities to the same extent and in the same manner as it applies to national banks — state consumer protection, disclosure, and fair lending laws apply unless they conflict with federal banking law or OCC regulations; this alignment with national bank state-law treatment is a deliberate choice by the OCC following the 2011 OTS integration
  • § 160.30 — General lending and investment powers: under HOLA § 5(c) (12 U.S.C. § 1464(c)), an FSA may make, invest in, purchase, sell, participate in, or otherwise deal in all loans and investments permitted by statute — including residential mortgage loans, consumer loans, commercial real estate loans (subject to percentage-of-assets limits), and investment securities; FSAs historically had broader real estate lending authority than national banks but more restricted commercial lending authority
  • § 160.31 — Election of loan or investment category: if a loan or investment qualifies under more than one HOLA category, the FSA may designate which category it has used; designations affect which percentage-of-assets limits apply; the election-and-designation system allows FSAs to optimize their portfolio composition within regulatory caps
  • §§ 160.100–160.101 — Real estate lending standards: implementing Section 304 of FDICIA (12 U.S.C. § 1828(o)), each FSA must adopt written policies establishing appropriate limits and standards for real estate-secured credit; the policies must be consistent with safe and sound banking practices and must address loan-to-value ratios, loan documentation, and appraisal requirements; the OCC's interagency real estate lending guidelines (incorporated by reference) specify supervisory LTV limits (e.g., 80% for residential, 65% for land development) above which loans require enhanced justification
  • § 160.110 — Most favored lender usury preemption: any state usury limit that would restrict the interest rate an FSA may charge on any loan is preempted; the FSA may charge interest at the rate permitted by the law of the state where it is located — and "interest" is defined broadly to include fees, discount points, and any payment compensating the lender for making credit available; this parallels the national bank usury preemption in Part 190 (12 CFR § 190.3) and the Supreme Court's Marquette National Bank doctrine
  • § 160.121 — Investment in state housing corporations: FSAs may invest in state housing corporations — non-profit or quasi-governmental bodies that finance affordable housing — provided the obligations are secured or the loans are supported by state or local government guarantees; a meaningful authority for FSAs in markets where state housing finance agencies provide credit enhancements
  • § 160.130 — Prohibition on loan procurement fees: directors, officers, and other persons with management authority over an FSA may not receive any commission, fee, or other compensation in connection with the procurement of any loan made by the FSA — a bright-line conflict-of-interest rule preventing insiders from referring borrowers for a personal fee; parallel to the Regulation O arm's-length lending requirements (12 CFR Part 215)
  • § 160.160 — Asset classification: each FSA must evaluate and classify its assets on a regular basis using a system consistent with the OCC's classification framework (Pass / Special Mention / Substandard / Doubtful / Loss); OCC examiners may identify problem assets and classify them during examinations; the FSA's classification system and loan review processes are among the most important items reviewed during OCC safety-and-soundness examinations
  • § 160.170 — Records for lending transactions: FSAs must establish and maintain loan documentation practices that support informed lending decisions, allow evaluation of ongoing risk, facilitate regulatory review, and ensure accountability; documentation standards include original application, appraisals, financial statements, credit analyses, and disbursement records; the recordkeeping framework works alongside the real estate lending standards in §§ 160.100-160.101

  Part 160 reflects the historical mission of federal savings associations: thrift institutions chartered to promote home ownership by accepting consumer savings deposits and making residential mortgage loans. HOLA's percentage-of-assets limits on commercial loans and mandates for mortgage lending authority distinguish FSAs from national banks, though OCC supervision since 2011 has moved toward convergence. The OCC's Part 163 (FSA operations) works alongside Part 160 — Part 160 sets lending and investment power standards; Part 163 addresses the operational structure through which those powers are exercised. No major Part 160 rulemakings since 2011 when OCC inherited OTS regulatory authority.

• 12 CFR Part 190 — Preemption of State Usury Laws: the OCC regulations implementing Section 501 of the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA) — which permanently preempts state constitutional or statutory provisions expressly limiting interest rates on federally-related loans made by insured depository institutions. Part 190 is the regulatory foundation of the "most favored lender" doctrine that allows national banks and federally-chartered thrifts to charge the interest rate permitted in any state, regardless of where the borrower lives. Key provisions:

  • § 190.3 — Operation of preemption: state law interest rate caps, usury limits, and "criminal usury" statutes do not apply to any federally-related loan — defined broadly to include loans made by FDIC-insured institutions, federal credit unions, NCUA-insured credit unions, or any lender whose loans are sold to FHLMC, FNMA, or GNMA; the preemption covers interest, discount points, finance charges, and "other charges" (a broad phrase that was the subject of significant litigation over bank fees)
  • § 190.101 — State criminal usury statutes: state criminal usury provisions (which impose penalties on lenders who charge above-cap rates) are also preempted as to federally-related loans; this prevents states from using criminal law as a backdoor way to impose usury limits that Part 190 preempts on the civil side
  • § 190.4 — Consumer protections for manufactured housing loans: DIDMCA Section 501 was implemented with some consumer protection floor requirements for federally-related manufactured housing loans — prepayment penalties must be disclosed to the borrower in advance; balloon payments must be disclosed; lenders making manufactured housing loans must provide a HUD pamphlet on these products

  Part 190's preemption is the legal basis for the credit card industry's geographic concentration in South Dakota and Delaware — states that eliminated usury caps in 1981 specifically to attract Citibank and other national banks. Once a national bank established its credit card operation in a cap-free state, Section 501 (and the Supreme Court's Marquette National Bank v. First of Omaha Service Corp., 439 U.S. 299 (1978) decision that preceded it) allowed it to charge that state's rates to cardholders nationwide. The result: effectively no federal ceiling on credit card interest rates. No major Part 190 rulemakings since 1980 — the preemption framework has been stable since enactment.

• 12 CFR Part 191 — Preemption of State Due-on-Sale Laws: the OCC regulations implementing Section 341 of the Garn-St Germain Depository Institutions Act of 1982, which preempts state laws that restrict mortgage lenders from exercising due-on-sale clauses — contractual provisions requiring full loan repayment when the mortgaged property is sold or transferred. Many states had passed "due-on-sale restrictions" in the 1970s that prevented lenders from calling their below-market loans when property was sold, effectively requiring them to allow assumption of low-rate loans. Garn-St Germain (and Part 191) ended this. Key provisions:

  • § 191.3 — Federal savings associations: a federal savings association may include a due-on-sale clause in any real property loan; the due-on-sale clause may be exercised on any transfer, including transfers to heirs, divorce property settlements, and junior lienholders — with specific exceptions under § 191.5
  • § 191.4 — Other lenders: lenders other than federal savings associations (national banks, state banks, and others whose loans are federally insured or sold to the federal secondary market) have the same power to include and exercise due-on-sale clauses under Section 341's preemption
  • § 191.5 — Limitations on exercise: even with Part 191 preemption, lenders may not exercise a due-on-sale clause in the following situations (protecting certain "sympathetic" transfers from automatic acceleration): (a) death of a joint tenant, leaving property to surviving joint tenant; (b) transfer to a relative upon the death of the borrower; (c) transfer to a spouse or children where the borrower remains the occupant; (d) transfer to a relative upon the borrower's death if the relative will occupy the property; (e) creation of a junior lien that does not transfer title; (f) transfer into an inter vivos trust where the borrower remains the beneficiary; these exceptions prevent due-on-sale clauses from breaking up families' property arrangements

  The Garn-St Germain preemption was a market-liberating measure that allowed lenders to make fixed-rate loans without the risk of being locked into below-market terms if rates rose dramatically — a risk that had nearly destroyed the thrift industry in the late 1970s. The preemption meant mortgage lenders would not get stuck with 6% mortgages when rates rose to 18%; borrowers could no longer expect to transfer their low-rate loans to buyers. No major Part 191 rulemakings since Garn-St Germain implementation in 1982.

• 12 CFR Part 14 — Consumer Protection in Sales of Insurance: the OCC regulations governing sales of insurance products and annuities by national banks and federal savings associations — the consumer protection framework that applies when a bank's employee or affiliate offers life insurance, property and casualty insurance, or annuities to customers in connection with bank transactions. Key provisions:

  • § 14.30 — Prohibited practices: (a) Anti-coercion/anti-tying — a bank may not condition any extension of credit on the customer's purchase of an insurance product; this directly implements Section 106(b) of the Bank Holding Company Act's anti-tying prohibition in the insurance context; (b) Anti-misleading — the bank may not misrepresent that the insurance product is FDIC-insured or a deposit (insurance and annuities are not bank deposits and are not federally insured); (c) the bank may not refer customers to insurance products without complying with the disclosure requirements
  • § 14.40 — Required disclosures: before completing any insurance sale, the bank must disclose to the customer that: (1) the insurance product is not a deposit and is not FDIC-insured; (2) the insurance product is not guaranteed by the bank; (3) in the case of variable annuities and investment-linked products, the customer's investment may lose value; the disclosures must be given orally (in person) and in writing (signed by the customer); this "three disclosure" framework prevents banks from exploiting the "halo effect" of customer trust to sell insurance as if it were a bank product
  • § 14.50 — Physical separation: to the extent practicable, banks must conduct insurance transactions in a physically separate area from the bank's traditional banking activities — not at the teller window; customers must not feel that they're in a bank context when making insurance purchase decisions, reducing the implicit pressure of the banking relationship
  • § 14.60 — Licensing: banks may only allow state-licensed insurance personnel to sell or offer insurance products in their offices; a bank cannot use unlicensed employees to informally steer customers toward insurance products

  Part 14 reflects Congress's caution about bank entry into insurance sales after Barnett Bank of Marion County v. Nelson (1996) confirmed that national banks can sell insurance in small towns regardless of state law — a preemption ruling that opened national bank insurance sales nationally. The consumer protection disclosures in Part 14 specifically address the "confusion risk" — that depositors would assume insurance products sold in bank offices had the same federal backing as their deposits. No major Part 14 amendments since the original 2001 rulemaking (66 FR 8172); the framework has remained stable.

• 12 CFR Part 2 — Sales of Credit Life Insurance: the OCC's rules governing a specific subset of bank insurance activity — credit life, health, and accident insurance (including mortgage life and disability insurance) sold to bank loan customers under 12 U.S.C. § 24 (Seventh) (the national bank "incidental powers" clause). Key provisions:

  • § 2.3 — Distribution of income prohibited: it is an unsafe and unsound banking practice for any director, officer, employee, or principal shareholder of a national bank (including entities in which that person owns more than 10% interest) who is involved in selling credit life insurance to loan customers to receive any income, commission, or other thing of value from those sales — other than the limited bonus/incentive plan exception under § 2.4; the prohibition addresses the conflict of interest inherent in having a bank insider profit personally from recommending insurance products to borrowers who need loan approval
  • § 2.4 — Bonus and incentive plan cap: a bank employee or officer may participate in a bonus or incentive plan tied to credit life insurance sales if payments in any one year do not exceed the greater of 5% of the recipient's annual salary or 5% of the average salary of all loan officers in the plan; this narrow carve-out permits modest performance incentives without creating the systematic conflicts that arise from commission-based sales
  • § 2.5 — Turnover requirement: if a licensed insurance agent who is also a bank director, officer, employee, or principal shareholder sells credit life insurance to the bank's loan customers, all income from those sales must be turned over to the bank as compensation for the use of the bank's premises, employees, and goodwill — the agent keeps nothing; income derived from bank-facilitated introductions belongs to the bank, not the individual

  Part 2 targets one of the oldest conflicts in consumer lending: the bundled sale of credit insurance to borrowers who may not understand they're buying a separate product or may feel implicit pressure to accept it as part of loan approval. The income-prohibition and turnover rules ensure that bank personnel who influence whether a borrower gets a loan cannot personally profit from steering that borrower into an associated insurance product. The OCC's Part 14 (consumer protection in insurance sales generally) and Part 2 (credit life specifically) work together — Part 14 establishes disclosure and anti-coercion requirements; Part 2 addresses the compensation structure for the specific high-conflict product category. No major Part 2 amendments since promulgation; the rule predates the Gramm-Leach-Bliley Act (1999) expansion of bank insurance authority but remains operative.

• 12 CFR Part 28 — International Banking Activities (OCC, 27 sections across 3 subparts): the OCC's consolidated rules governing (A) foreign operations of U.S. national banks, (B) licensing and supervision of U.S. branches and agencies of foreign banks, and (C) international lending supervision. Part 28 implements the International Banking Act of 1978 (IBA) and the International Lending Supervision Act of 1983 (ILSA) for OCC-chartered institutions:

  Subpart A — Foreign Operations of National Banks (§§ 28.1–28.5):

  • § 28.3 — Filing requirements: a national bank must notify the OCC when it opens, closes, or acquires an interest in a foreign branch, Edge corporation, Agreement corporation, or certain foreign organizations; the notice requirement (rather than a prior-approval requirement for most transactions) reflects the OCC's deference to the Federal Reserve's primary oversight of foreign bank operations under Regulation K (12 CFR Part 211), which requires its own FRB applications; the OCC notice piggybacks on the FRB approval rather than creating a parallel approval process
  • § 28.4 — Permissible activities: a national bank may conduct in a foreign country any activity that (1) is permissible for national banks in the United States or (2) is usual in connection with the business of banking in that country; this dual-standard framework allows national banks to match local market practices in foreign jurisdictions — participating in government bond markets, trust services, or trade finance activities that may not be typical in the U.S. but are standard banking in the host country — without requiring OCC pre-approval for each new activity

  Subpart B — Federal Branches and Agencies of Foreign Banks (§§ 28.10–28.26): Federal branches and agencies are the primary vehicle through which large foreign banks operate in the United States under direct federal charter. A federal branch may accept deposits and engage in full banking activities; a federal agency may only conduct lending and other business but may not accept deposits from U.S. residents. Both are chartered and supervised by the OCC (not a state banking authority), making them subject to federal banking law rather than state banking law:

  • § 28.12 — Approval requirements: a foreign bank must obtain OCC approval before establishing a federal branch or agency; the OCC evaluates financial condition and management quality of the parent bank, the home country supervisory framework, reciprocal access for U.S. banks in the home country, and whether the foreign bank's operations comply with U.S. anti-money-laundering and OFAC sanctions requirements
  • § 28.13 — Permissible activities: federal branches and agencies operate with the same rights and privileges as national banks, except as specifically limited by the IBA or the OCC; they may not conduct activities prohibited by the IBA even if the activity is permissible for national banks
  • § 28.14 — Capital limitations: restrictions based on a bank's "capital" (e.g., lending limits, investment limits) are applied to a federal branch or agency by reference to the dollar equivalent of the foreign parent bank's worldwide capital — preventing foreign banks from exploiting the absence of U.S.-based capital to circumvent lending concentration limits
  • § 28.15 — Capital equivalency deposits (CED): foreign banks operating federal branches or agencies must maintain a capital equivalency deposit — a deposit of investment-grade assets at a U.S. member bank, held as a safety buffer for U.S. creditors; the CED minimum is 5% of the branch's liabilities to third parties; the OCC may increase the required amount based on the branch's risk profile or the home country's supervisory quality
  • § 28.16 — Deposit-taking limits for uninsured branches: an uninsured federal branch (one without FDIC deposit insurance) may only accept deposits from certain categories of depositors, primarily institutional — it may not accept retail deposits from U.S. residents with balances under $250,000; the deposit-taking limits prevent foreign banks from operating retail deposit-gathering operations without subjecting their depositors to the consumer protection and insurance framework
  • § 28.20 — Maintenance of assets: the OCC may require a foreign bank to maintain specified assets in the state where its federal branch or agency is located as a prudential or enforcement measure; mandatory asset maintenance is typically imposed when a foreign bank's home country regulatory environment raises concerns or when OCC enforcement action is pending
  • § 28.24 — Termination: the OCC may revoke a foreign bank's authority to operate a federal branch or agency if the bank has violated applicable laws or regulations, if the home country's supervisory framework is found inadequate, or if the bank has engaged in conduct endangering its U.S. creditors or the safety and soundness of its U.S. operations

  Subpart C — International Lending Supervision (§§ 28.50–28.54): Implementing ILSA (1983), which Congress passed following the Latin American debt crisis to require U.S. banks to build reserves against sovereign lending risk:

  • § 28.52 — Allocated transfer risk reserve (ATRR): when the OCC (jointly with the Federal Reserve and FDIC) determines that a specific country's debt service capacity is severely impaired, national banks must establish an ATRR — a specific loan loss reserve allocated against that country's assets; the ATRR requirement cannot be offset by general loan loss reserves and must be taken as a charge against earnings, directly reducing bank capital; the ATRR mechanism was most actively used during the 1980s Latin American debt crisis and has been seldom triggered in recent years
  • § 28.53 — Accounting for fees on restructured international loans: when a bank restructures a sovereign or international loan (extending maturity, reducing rate, rescheduling principal), any fees charged in connection with the restructuring beyond actual administrative costs must be amortized over the life of the restructured loan — the bank may not recognize fee income upfront that effectively compensates for the concession the bank made to the distressed borrower
  • § 28.54 — Reporting international assets: national banks must submit FFIEC Country Exposure Reports quarterly, disclosing their cross-border assets (loans, securities, other exposures) by country; these reports are the primary data source for U.S. regulators monitoring bank concentration in specific sovereign markets; the FFIEC country exposure data informs country risk ratings and the ATRR determination process

  Part 28 reflects the two-directional nature of international banking supervision: U.S. banks going abroad (Subpart A) and foreign banks coming to the U.S. (Subpart B). The post-2008 financial crisis reforms — particularly the enhanced prudential standards for systemically important foreign banking organizations (SIFOs) under Regulation YY (12 CFR Part 252) — complemented Part 28's framework by requiring the largest foreign banks with large U.S. operations to establish intermediate holding companies (IHCs) that consolidate their U.S. subsidiaries under single-entity capital and liquidity standards. Recent rulemakings: 73 FR 22251 (April 2008) amended reporting requirements; the most recent significant restructuring of federal branch/agency supervision was at 68 FR 70700 (2003), which streamlined licensing and activity standards.

• 12 CFR Part 48 — Retail Foreign Exchange Transactions: the OCC regulations permitting national banks and federal savings associations to offer retail forex trading to individual customers — a market that had been offered primarily by unregulated dealers before the Dodd-Frank Act directed banking regulators to adopt rules. Part 48 implements Section 742 of Dodd-Frank (7 U.S.C. § 27), which required federal banking regulators to authorize and regulate retail forex transactions for their supervised entities. Key provisions:

  • § 48.4 — Supervisory non-objection: before commencing a retail forex business, a national bank must provide the OCC with prior written notice and obtain a written non-objection from the OCC — similar to an advance approval; the OCC reviews the bank's proposed policies, risk management framework, compliance controls, and capital position before issuing a non-objection; a bank that begins offering retail forex without non-objection is in violation
  • § 48.3 — Prohibited conduct: national banks and their institution-affiliated parties (IAPs) may not, directly or indirectly: (a) cheat or defraud a retail forex customer; (b) misrepresent the risk or trading conditions; (c) manipulate prices; (d) use fraudulent devices or schemes; (e) make false statements or reports — a comprehensive fraud prohibition that parallels CFTC's anti-fraud provisions for retail forex dealers
  • § 48.11 — Unlawful representations: no bank or IAP may imply or represent that losses can be limited to a customer's deposited margin — retail forex trading can result in losses in excess of margin; any representation to the contrary is a violation; the prohibition prevents the most common retail forex marketing abuse
  • § 48.6 — Risk disclosure statement: a national bank must provide every retail forex customer with a standardized risk disclosure statement before opening the account; the statement must clearly explain (a) that retail forex involves significant risk of loss, (b) that past performance is not indicative of future results, (c) that customers may lose more than their initial deposit, and (d) that the bank may act as counterparty; the risk disclosure must be signed by the customer
  • § 48.9 — Margin requirements: the bank must collect a margin amount from each retail forex customer that is not less than the minimum margin specified in the Part 48 regulations or the CFTC's retail forex margin rules, whichever is higher; the margin requirement limits leverage available to retail customers — a key consumer protection measure given that unregulated forex dealers had offered leverage of 400:1 or more, amplifying losses catastrophically
  • § 48.8 — Capital requirements: a national bank offering retail forex must be well-capitalized as defined under 12 CFR Part 6; this capital requirement is a threshold condition, not a minimum floor — a bank that falls below well-capitalized status while conducting a retail forex business must notify the OCC and may be required to suspend operations
  • § 48.10 — Monthly statements: the bank must furnish every retail forex customer with a monthly account statement as of the close of the last business day of each month; the statement must show open positions, equity, unrealized profit and loss, and a summary of completed transactions; the monthly disclosure requirement ensures customers receive regular visibility into their account status regardless of how infrequently they check their accounts
  • § 48.16 — Customer dispute resolution: banks may not require retail forex customers to submit disputes to binding arbitration as a mandatory pre-condition to any other remedy; the prohibition protects customers' ability to pursue claims in court if they choose

  Part 48 was issued in 2011 (76 FR 41384) alongside parallel rules issued by the Federal Reserve, FDIC, OTS (later merged into OCC), and Farm Credit Administration — all implementing the Dodd-Frank Section 742 mandate simultaneously. The rules collectively extended federal oversight to retail forex transactions that had previously fallen into a regulatory gap between CFTC's futures jurisdiction and the banking regulators' oversight of national bank activities. CFTC retains jurisdiction over non-bank retail forex dealers (unregistered entities and those not supervised by banking regulators); OCC's Part 48 covers the national bank and federal thrift subset. No major amendments since the 2011 original rule.

12 CFR Part 1 — Investment Securities: The OCC's investment securities regulation governs what securities national banks may purchase, sell, underwrite, and hold, implementing 12 U.S.C. § 24 (Seventh). The regulation uses a five-type classification system that determines permissible holdings and concentration limits:

• Type I securities — Obligations of the United States or its agencies; general obligations of states and political subdivisions; municipal obligations backed by the full faith and credit of a general-taxing authority; obligations of international organizations (IMF, World Bank); these may be held in any amount, with no per-issuer concentration limits; banks may also deal in and underwrite Type I securities
• Type II securities — Revenue obligations issued for housing, university, or dormitory purposes; SBA debentures; limited to 10% of capital and surplus per issuer; banks may underwrite Type II securities; § 1.130 provides detailed criteria for university and housing purpose bonds (must finance construction/improvement of university facilities or university-affiliated hospitals; dormitory bonds qualify if proceeds finance student housing at degree-granting institutions)
• Type III securities — Investment-grade obligations not qualifying as Type I or II — including most corporate bonds and lower-rated municipal revenue bonds — limited to 10% of capital and surplus per issuer; banks may not underwrite Type III securities (Glass-Steagall remnant); investment grade is determined by reference to nationally recognized statistical rating organizations (NRSROs) or by the bank's own credit analysis under the OCC's credit-evaluation framework
• Type IV securities — Asset-backed securities (ABS) structured as pass-through certificates or collateralized debt obligations; must be investment grade; OCC may determine eligibility case-by-case for novel ABS structures
• Type V securities — Investment-grade obligations that do not qualify for Type I–IV but are rated investment grade; additional category introduced to accommodate structured finance instruments; limited to 25% of capital and surplus in aggregate

Key definitions (§ 1.2): "capital and surplus" means tier 1 + tier 2 capital under OCC capital adequacy standards plus the allowance for credit losses not included in tier 2 capital — a broader measure than equity capital alone.

Key restrictions (§ 1.3): national banks may purchase, sell, and hold securities for their own accounts and for customers' accounts; banks may not purchase securities "predominantly for the purpose of sale in anticipation of changes in interest rates" — a statutory anti-speculation rule; banks may underwrite and deal in Type I and II securities but may not underwrite corporate equity or other non-bank-eligible securities.

Indirect general obligations (§ 1.100): a municipal bond issued by an entity without general taxing power (e.g., a water authority) qualifies as a Type I general obligation if a taxing authority unconditionally promises to make the bond's payments — typically through a lease/rental agreement obligating the state or municipality to pay annual amounts sufficient to cover debt service; the OCC evaluates the unconditional nature of the commitment and the taxing authority's revenue base.

Recent rulemakings: 84 FR 4237 (2019) and 84 FR 69297 (2019) — technical amendments; 77 FR 35257 (2012) — comprehensive revision incorporating credit analysis standards that do not mechanically rely on credit ratings, implementing the Dodd-Frank § 939A credit-rating reform mandate.

• 12 CFR Part 16 — Securities Offering Disclosure Rules: the OCC regulations governing offers and sales of securities issued by national banks and federal savings associations — a distinct topic from the investment securities rules in Part 1, which govern securities that banks buy and hold. Part 16 applies when a national bank or federal savings association raises capital from the public by issuing its own stock, subordinated debt, or other securities. The OCC acts as the SEC for these issuances — issuers file registration statements with the OCC rather than the SEC. Key provisions:

  • § 16.2 — Registration requirement: a national bank or federal savings association may not offer or sell its own securities unless it has either (a) filed a registration statement with the OCC that has become effective, or (b) the offering qualifies for an exemption; the requirement applies to public offerings — offerings made to a limited number of sophisticated investors typically qualify for exemptions mirroring SEC Regulation D; a bank conducting an IPO or public offering of subordinated notes must go through the OCC registration process rather than (or in addition to) SEC registration
  • § 16.15 — Form and content: OCC registration statements must use the SEC form (from 17 CFR Part 239) that the bank would use were it registering under the Securities Act — the OCC tracks SEC forms and requires SEC-equivalent disclosure; the registration statement must include all material information necessary to avoid misleading investors; banks should also consult SEC Industry Guide 3 (Statistical Disclosure by Bank Holding Companies) for appropriate bank-specific financial disclosures
  • § 16.16 — Effectiveness: registration statements become effective under the same standards as SEC Securities Act sections 8(a) and (c) — the OCC deems the registration effective rather than issuing a formal order; a prospectus filed as part of an effective registration statement is simultaneously deemed effective
  • § 16.6 — Exemptions: national banks and federal savings associations with fewer than 2,000 shareholders of record and whose securities are not held by an FRB member bank are exempt from Part 16; securities issued in transactions exempt under SEC Regulation D (private placements to accredited investors), Regulation A (small offerings), or other SEC exemption categories are also exempt, provided the bank satisfies the conditions of the applicable exemption; most community bank capital raises are conducted through private placements to existing shareholders or local investors and do not trigger Part 16
  • § 16.10 — Sales at savings association offices: sales of federal savings association securities at savings association offices must comply with 12 CFR 163.76 — the OCC rule prohibiting misleading sales practices for securities sold through deposit-taking locations; the rule requires that FSA securities sold through branch offices be clearly distinguished from FDIC-insured deposits

  Part 16's practical significance is largest for publicly traded national banks or federal savings associations that are not holding company subsidiaries — standalone banks that have their own public shareholders must use Part 16 rather than SEC registration. Most large bank holding companies (JPMorgan Chase, Bank of America) are SEC registrants at the holding company level; the operating bank subsidiaries' securities are not separately public-traded. But standalone community banks and mutual savings associations converting to stock form (mutual-to-stock conversions) use Part 16 extensively. Last major amendment: 82 FR 8108 (January 2017) — updated to align with SEC forms, modernize electronic filing requirements, and clarify applicability to federal savings associations following OCC absorption of OTS functions.

• 12 CFR Part 163 — Savings Associations — Operations (OCC, 29 sections — the OCC regulations governing the internal operations and governance of federal savings associations (FSAs), transferred from the former Office of Thrift Supervision following Dodd-Frank's abolition of OTS in 2011; Part 163 covers advertising practices, board composition, examination procedures, financial derivatives use, interest rate risk management, suspicious activity reporting, and conflicts of interest — the operational framework for the thrift charter now supervised by the OCC):

  • § 163.27 — Advertising: FSAs may not use advertising or promotional materials that are false or misleading; the prohibition covers all media — print, broadcast, digital, social media, displays, and stationery; advertising for deposit products may not imply coverage or insurance protection beyond what FDIC actually provides; the OCC may examine advertising records and require correction of misleading materials without waiting for a formal enforcement proceeding
  • § 163.33 — Directors, officers, and employees: the board of directors of a federal savings association must have a minimum of five members; OCC approval is required for certain director and officer appointments at troubled institutions or when the OCC has issued a supervisory directive; the OCC may remove or prohibit directors and officers who engage in unsafe or unsound practices or who violate applicable law
  • § 163.170 — Examinations and audits: the OCC examines FSAs and their affiliates periodically (not less than once every 18 months for institutions meeting well-capitalized and highly-rated criteria; more frequent for institutions with supervisory concerns); OCC examiners have authority to examine any affiliate of an FSA that is controlled by the same holding company; FSAs must provide examiners access to all records, books, and personnel
  • § 163.172 — Financial derivatives: FSAs may enter into financial derivative contracts — interest rate swaps, currency swaps, interest rate caps and floors, options on interest rates and currencies, and futures — for the purpose of hedging interest rate and credit risk; the board of directors must approve a written derivatives policy that includes risk limits, permissible instruments, counterparty credit evaluation procedures, and internal controls; FSAs may not take speculative derivatives positions — hedging must be against an identified underlying risk exposure (a fixed-rate mortgage portfolio, a certificate of deposit book, a pending loan commitment); the OCC reviews derivatives policies and positions in examination as part of interest rate risk assessment
  • § 163.176 — Interest rate risk (IRR) management: the board of directors must review the FSA's IRR position and management program at least once per year, and more frequently when market conditions or the institution's risk profile changes materially; the board-level IRR review must address measurement systems (gap analysis, duration analysis, or simulation models), monitoring frequency, and control limits; the OCC's examination process for FSAs includes assessment of IRR governance — whether the board is adequately engaged with IRR management given the institution's balance sheet — because FSAs, by statutory design, concentrate in fixed-rate residential mortgages, making IRR the dominant financial risk for most thrifts
  • § 163.180 — Suspicious Activity Reports (SARs): FSAs must file SARs with FinCEN when they know, suspect, or have reason to suspect that a transaction involves funds from illegal activity, is designed to evade Bank Secrecy Act requirements, or involves a crime aggregating $5,000 or more using the FSA's services; the 30-day filing deadline for most SARs (60 days if no suspect is identified initially) and the prohibition on informing the subject of the SAR filing apply to FSAs under Part 163 identically to national banks under 12 CFR Part 21; SARs filed by FSAs through FinCEN's BSA E-Filing system are available to law enforcement through the Bank Secrecy Act database
  • § 163.200 — Conflicts of interest: directors, officers, and employees who can direct or influence the management of an FSA must not use their positions for personal gain at the expense of the FSA; the OCC's conflicts standard tracks the general corporate law duty of loyalty — a covered person with a material interest in a transaction the FSA is considering must disclose the interest and recuse from the decision; the OCC may examine conflict-of-interest policies as part of corporate governance review
  • § 163.201 — Corporate opportunity: directors and officers of an FSA may not appropriate for themselves business opportunities that belong to the FSA — the corporate opportunity doctrine; if the FSA would reasonably be expected to pursue an opportunity (a loan, an investment, an acquisition), a director or officer who becomes aware of that opportunity must first offer it to the FSA before pursuing it personally or through another entity; the corporate opportunity rule addresses a common form of director self-dealing in smaller institutions

  Part 163 reflects the OCC's absorption of the OTS regulatory portfolio following Dodd-Frank. The rules are substantially identical to former OTS regulations, with technical changes to align references to the OCC supervisory framework. For FSA operators, the most operationally significant provisions are §§ 163.172 and 163.176 — the derivatives use authority and IRR governance requirements — because thrift balance sheets are inherently exposed to interest rate risk through their concentration in long-term fixed-rate mortgages; the 2022–2023 interest rate cycle demonstrated how rapidly this exposure can threaten an FSA's financial condition (see Silicon Valley Bank and related failures, which spurred renewed OCC focus on IRR governance for all supervised institutions, not just thrifts). Last major amendment: 76 FR 49047 (August 2011) — initial OCC promulgation incorporating transferred OTS rules; 85 FR 42643 (July 2020) — amendments to SAR, conflicts-of-interest, and IRR provisions.

• 12 CFR Part 23 — Leasing: the OCC's regulations governing national bank personal property lease financing under two separate statutory authorities — a full-payout net lease authority under 12 U.S.C. § 24(Seventh) (the general business-of-banking power) and a direct investment leasing authority under 12 U.S.C. § 24(Tenth) (a specific statutory grant added by the Competitive Equality Banking Act of 1987 — CEBA). National banks use lease financing as an alternative to loan financing for commercial customers acquiring equipment, vehicles, and other personal property — the bank funds the asset rather than the acquisition and structures the arrangement as a lease rather than a secured loan. Part 23 sets the conditions under which the two types of leasing are permissible banking activities. Key provisions:

  • § 23.3 — Lease requirements (Section 24(Seventh) leases): to qualify under § 24(Seventh), a national bank lease must be both a "full-payout lease" and a "net lease." A full-payout lease requires that the bank's reasonably expected recovery from lease payments plus the estimated residual value of the property at lease end must be sufficient to cover the bank's full book value investment and financing costs — meaning the bank does not rely on residual value appreciation to be made whole; it cannot speculate on property value increases to justify a below-market lease rate. A net lease requires that the lessee (the customer) is responsible for maintaining the property, keeping it insured, and paying taxes associated with the property — the bank is not in the property management business; the lease is a financial transaction, not a property services relationship
  • § 23.4 — Prior commitment rule: under both § 24(Seventh) and § 24(Tenth), a national bank may acquire property for leasing only after entering into (1) a conforming lease, or (2) a legally binding written agreement that indemnifies the bank against loss in connection with the subsequent lease, or (3) a legally binding written option to lease; this prevents banks from speculating in equipment markets — they may not buy inventory hoping to find lessees later; every acquisition must be tied to a specific customer transaction
  • § 23.10 — CEBA Lease general rule (Section 24(Tenth)): a national bank may invest in tangible personal property — specifically vehicles, manufactured homes, machinery, equipment, or furniture — for the purpose of leasing, if the bank's aggregate CEBA investment does not exceed 10% of the bank's capital and surplus; unlike § 24(Seventh) leases, CEBA leases do not need to be full-payout net leases — they are a direct investment authority with an aggregate cap that limits the bank's exposure; the 10% cap is the OCC's safety-and-soundness constraint preventing a bank from becoming primarily a leasing company rather than a bank
  • § 23.11 — CEBA Lease term: CEBA Leases must have an initial term of at least 90 days; a bank may acquire property subject to an existing lease with a remaining maturity less than 90 days if, at its inception, the lease had a conforming term — preventing technical evasion through late-in-lease acquisitions that nominally comply
  • § 23.20 — Section 24(Seventh) Investment rule: under the broader § 24(Seventh) authority, a national bank may invest in tangible or intangible personal property (vehicles, manufactured homes, machinery, equipment, furniture, patents, copyrights, and other intellectual property) for leasing purposes — a wider property scope than the CEBA authority's limited list
  • § 23.21 — Estimated residual value: for full-payout leases under § 24(Seventh), the bank's estimate of the leased property's residual value (the value at lease end, which the bank or a third party will realize through sale or re-lease) must be reasonable at the time the lease is executed; a bank may not structure a lease as full-payout by relying on an inflated or unrealistic residual value estimate; the OCC may critique residual value assumptions during examination if they appear inconsistent with the property's expected depreciation and market conditions

  The two-pathway structure reflects Congress's legislative history: § 24(Seventh)'s general banking power encompasses equipment finance leasing as a standard banking activity for customers who prefer off-balance-sheet treatment of financed assets; CEBA added § 24(Tenth) as a more permissive (no full-payout requirement) but volume-capped pathway to allow national banks to compete with independent leasing companies and captive finance arms of manufacturers. For a national bank, the practical significance of Part 23 is that it defines the line between permissible lease financing (within the Part 23 requirements) and impermissible direct investment in property (a banking principle violation). Banks running lease portfolios — aircraft leasing, fleet vehicle programs, commercial equipment programs — operate within this framework. Recent rulemakings: 61 FR 66560 (December 1996) — significant revision codifying OCC interpretive positions on residual value and full-payout requirements; 66 FR 34792 (June 2001) — technical amendments.

• 12 CFR Part 45 — Margin and Capital Requirements for Covered Swap Entities: the OCC's implementation of Dodd-Frank's post-crisis margin requirements for national banks and federal savings associations registered as swap dealers or major swap participants ("covered swap entities"). Before Dodd-Frank, bilateral (non-cleared) swaps were traded with little or no mandatory margin — AIG's collapse in 2008 demonstrated the systemic danger of uncollateralized bilateral derivatives exposure at scale. Part 45 mandates both initial margin and variation margin for non-cleared swaps:

  • § 45.3 — Initial margin: a covered swap entity must collect initial margin from swap entity and financial end user counterparties; initial margin reflects potential future exposure over a 10-day horizon, calculated using either a CFTC-approved industry model (SIMM) or a schedule-based approach; initial margin must be held in a segregated third-party custody account — neither party may access it while the swap is open; segregation prevents mixing with proprietary assets
  • § 45.4 — Variation margin: after execution, the covered swap entity exchanges variation margin (mark-to-market payments) daily; the net mark-to-market value is calculated each business day, and the party with negative market value pays the difference; minimum transfer amount of $500,000 — amounts below this threshold accumulate until the threshold is crossed; daily variation margin prevents the gradual accumulation of uncollateralized credit exposure that characterized pre-crisis bilateral derivatives
  • § 45.5 — Netting: initial margin is calculated net across all swaps under the same eligible master netting agreement (ISDA Master Agreement); offsetting positions reduce required margin; variation margin may also be calculated net across netting agreement positions
  • § 45.10 — Documentation: a credit support agreement (Credit Support Annex) with each covered counterparty must be in place before entering non-cleared swaps; the agreement specifies initial margin thresholds, variation margin terms, eligible collateral, haircuts, and custodian arrangements; documentation must be executed at or before trade execution
  • § 45.11 — Affiliate special rules: inter-affiliate swaps face different requirements — initial margin is still required for swaps between two covered swap entities; variation margin between affiliates may be met through book entry rather than cash transfers, reducing operational burden for internal hedging
  • § 45.12 — Capital: covered swap entity must comply with OCC minimum capital requirements (same Tier 1 and Total capital ratios as all national banks) — swap dealer registration does not create capital exemptions

  Part 45 applies to the largest national banks — major swap dealers — and was phased in from 2016 through 2022 by counterparty size. The rule coordinates with CFTC and SEC margin rules (7 U.S.C. § 6s(e)) and with international frameworks from BCBS/IOSCO to prevent regulatory arbitrage across jurisdictions. Recent rulemaking: 88 FR 14388 (March 2023) — technical amendments conforming to updated ISDA margin protocols.

• 12 CFR Part 51 — Receiverships for Uninsured National Banks: the OCC's procedures for receivership of national banks that are not FDIC-insured — including national trust companies, special purpose national banks (OCC charters for fintech and payment activities), and other OCC-licensed entities that take no FDIC-insured deposits. Because FDIC's standard bank resolution procedures apply only to insured depositories, Part 51 provides a parallel OCC framework for uninsured national bank failures:

  • § 51.2 — Appointment of receiver: the Comptroller may appoint any person (including OCC itself or another government agency) as receiver for an uninsured national bank that is insolvent, has violated law, has unsafe conditions, or consents to appointment; appointment immediately terminates board and management authority; the receiver takes exclusive control of all assets and operations
  • § 51.4 — Claims process: creditors present claims with supporting documentation; OCC reviews and makes administrative determinations; disputed determinations may be challenged in federal court; a bar date is set — late claims may be permanently barred from distributions
  • § 51.5 — Priority waterfall: proved claims are paid in order: (1) administrative expenses; (2) wages and salaries earned before appointment; (3) receiver operating expenses; (4) taxes owed to government; (5) depositor debts (if any); (6) general unsecured creditors; and (7) any residual to shareholders — differing from the FDIC's priority structure because FDIC deposit insurance fund is not a party
  • § 51.7 — Powers of receiver: the receiver may marshal and liquidate assets, continue operations for orderly wind-down, pursue claims on behalf of the estate, transfer assets or sell the bank, and avoid pre-receivership preferences and fraudulent transfers — without needing additional court authorization; legal proceedings against the bank are automatically stayed upon appointment
  • § 51.8 — Payment and dividends: interim dividends may be paid as assets are liquidated without waiting for all claims to be resolved; the receiver closes the receivership after final distributions

  Part 51 matters increasingly as OCC explores special purpose national bank charters for fintech companies — a company holding an OCC fintech charter that fails would be wound down under Part 51 rather than FDIC procedures. National trust companies (Wilmington Trust, Computershare) holding fiduciary rather than deposit assets are also covered. Original rulemaking: 84 FR 31953 (July 2019) — promulgated to fill the regulatory gap for uninsured national bank failures.

• 12 CFR Part 192 — Conversions from Mutual to Stock Form (97 sections across 2 subparts — the OCC's comprehensive rules governing the mutual-to-stock conversion process for federal savings associations and federal mutual savings banks; authority: 12 U.S.C. § 1464; the regulatory framework for the process by which a depositor-owned mutual institution reorganizes into a stockholder-owned corporation, issuing shares to the public for the first time):

  • § 192.10 — Holding company formation: a savings association converting to stock form may simultaneously form a holding company that acquires 100% of the converted institution's stock; the holding company then conducts the public offering, issuing its own shares to depositors, the public, and community reinvestment funds; this "standard conversion via holding company" structure is the most common transaction form because it gives the converted institution greater financial flexibility
  • § 192.100 — Preparing for conversion (Subpart A — Standard Conversions): before filing an application, management must meet with the OCC to discuss the proposed conversion; a plan of conversion must be adopted by the board of directors and approved by members (depositors) by a two-thirds vote; the plan must describe the proposed stock offering price range, the subscription rights offered to different classes of eligible account holders (depositors of record as of a specific date get priority), and the proposed use of the capital raised
  • § 192.105 — Business plan: the conversion application must include a detailed business plan demonstrating how the institution will deploy the capital raised through the offering; the OCC scrutinizes whether the capital can be deployed productively — a conversion that would leave the institution with massive excess capital relative to its lending market and growth prospects may be denied on safety-and-soundness grounds
  • § 192.120 — Confidentiality: all conversion-related information is confidential until the OCC approves the application and the institution publicly files its offering documents (an OTS Form MHC or similar registration); premature disclosure can compromise the conversion and expose the institution to manipulation concerns
  • §§ 192.300–192.450 — Subscription offering process: eligible account holders (depositors with accounts at a specified "eligibility record date") have a first priority right to purchase stock in the conversion; management, directors, and employees have a lower priority; any remaining shares are offered to the general community through a community offering or a public syndicated offering managed by underwriters; the subscription period typically runs 45–60 days; oversubscribed offerings allocate shares by priority class
  • Subpart B — Voluntary Supervisory Conversions: a streamlined process for conversions in which the OCC (as conservator or supervisor) determines a mutual institution must convert immediately to address capital or viability concerns; voluntary supervisory conversions bypass normal subscription offering procedures in favor of an expedited private placement to a qualified acquirer

  The mutual-to-stock conversion is the defining transaction in thrift industry history — the "demutualization" wave of the 1980s through 2010s converted hundreds of community savings banks from member-owned mutuals into stock corporations, fundamentally changing the governance, capital structure, and in many cases the ownership concentration of retail banking in local markets. The conversion creates a significant one-time wealth transfer opportunity for depositors who receive subscription rights: stock purchased at the offering price in well-managed conversions often trades significantly above the offering price within the first year, a phenomenon known as "thrift conversion investing." Part 192's residency requirements and priority allocation rules are designed to direct this benefit to local community members rather than out-of-market speculators who would open deposit accounts solely to gain subscription rights. Recent rulemakings: 81 FR 66925 (September 2016) — OCC updated Part 192 after absorbing OTS functions; added provisions applicable to federal mutual savings banks.

Pending Legislation

No standalone OCC reform bills pending in the 119th Congress. Banking regulation bills affecting the OCC are tracked under Financial Regulation and Dodd-Frank.

Recent Developments

The OCC has been at the center of debates about the role of banks in climate risk, cryptocurrency, and fintech competition. The agency has issued guidance on banks' authority to hold cryptocurrency assets and provide custody services. The fintech charter initiative — allowing technology companies to obtain national bank charters — has been challenged in court by state regulators. Climate-related financial risk guidance has divided the banking industry and regulators. The CFPB exercises complementary consumer protection authority over national banks. The Dodd-Frank Act's transfer of thrift supervision from the dissolved OTS to the OCC continues to shape the agency's portfolio, with federal savings association regulation fully integrated into OCC operations.

The OCC released CRA performance evaluations for 33 national banks and federal savings associations in February 2026. The OCC also issued two proposals on preemption of state interest-on-escrow laws and a proposed amendment to its heightened standards guidelines for large banks, signaling continued focus on bank supervision modernization.

In March 2026, the OCC amended its national bank chartering rule to clarify the longstanding authority of national banks limited to trust company operations to engage in activities related thereto.

In February 2026, the OCC proposed revised procedures and policies for the bank appeals process, establishing updated rules for appeals of material supervisory determinations by OCC-supervised institutions.