OCC Bulletin 2014-49 | October 1, 2014

OTS Integration: Application of Guidance to FSAs and Rescission of OTS Documents

To

Chief Executive Officers of All National Banks and Federal Savings Associations, Department and Division Heads, All Examining Personnel, and Other Interested Parties

Summary

As part of the ongoing implementation of Title III of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Office of the Comptroller of the Currency (OCC) is making applicable to federal savings associations (FSA) certain OCC guidance and reaffirming as applicable to FSAs certain interagency guidance. The OCC is also rescinding several Office of Thrift Supervision documents.

Highlights

With the issuance of this bulletin, the OCC is

making applicable to FSAs the OCC guidance listed in appendix A.
reaffirming as applicable to FSAs the interagency guidance listed in appendix B.
rescinding the OTS documents listed in appendix C.

Note for Community Banks

This bulletin applies to all federal savings associations. This bulletin does not affect the applicability of any OCC guidance to national banks.

Background

As explained in OCC Bulletin 2011-47, "OTS Integration: Supervisory Policy Integration Process," the OCC is committed to evaluating former OTS guidance, addressing common supervisory issues consistently, and accommodating regulatory and statutory differences appropriately. The OCC's goal is to produce a consistent supervisory approach and integrated policy platform for national banks and FSAs, while recognizing differences anchored in statute.

As the OCC has progressed through the policy integration process, we have found instances where the OCC issued guidance on a particular topic and the former OTS did not issue like guidance. The OCC guidance is useful in the risk management, operations, or examination of FSAs as well as national banks. Further, the OCC guidance is referenced in revised booklets of the Comptroller's Handbook that apply to FSAs. Therefore, with the issuance of this bulletin, the OCC is applying to FSAs certain guidance issued before the OTS integration date as listed in appendix A.

Appendix B lists additional interagency guidance issued before the OTS integration date that continues to apply to FSAs.

Appendix C lists additional rescinded OTS documents and any guidance that replaces the rescinded documents. OTS documents are rescinded for one of the following reasons:

Outdated: The document is no longer needed. Any attachments to the document are rescinded only as they relate to national banks and FSAs.
Duplicative: The document transmitted interagency guidance that was issued jointly with the OCC. The rescission applies to the transmitting document only and not the attached interagency guidance. FSAs are directed to use the OCC-issued document to access the interagency guidance.
Conveyance: The document is a cover letter that merely conveyed another document. The rescission does not change the applicability of the conveyed document. To determine the applicability of the conveyed document, please refer to the original issuer of the document.
Replaced: The document and any attachments are superseded by similar OCC guidance that is immediately applicable to FSAs. However, FSAs have 90 days after the date of issuance of this bulletin to ensure compliance with this OCC guidance.

Please see the OCC's website and click on OTS Integration for a comprehensive inventory of OCC and OTS guidance applicable to FSAs. The OTS Integration Web page also includes information regarding OTS integration, rulemakings, and document rescissions.

Further Information

Please contact John Eckert, Director, Operational Risk and Core Policy, at (202) 649-6550.

Jennifer C. Kelly
Senior Deputy Comptroller and Chief National Bank Examiner

Appendix A, "OCC Guidance Now Applicable to FSAs"
Appendix B, "Interagency Guidance That Continues to Apply to FSAs"
Appendix C, "Rescinded OTS Documents"

Appendix A: OCC Guidance Now Applicable to FSAs

OCC Document	Title	Comments
Advisory Letter 2002-3	"Guidance on Unfair or Deceptive Acts or Practices"	Informs national banks and their operating subsidiaries about the risks present in engaging in lending and marketing practices that may constitute unfair or deceptive acts or practices and to help national banks avoid being placed in jeopardy of penalties, judgments, and harm to their reputations that can result from such practices. See also OCC Bulletin 2014-42, "Credit Practices Rules: Interagency Guidance Regarding Unfair or Deceptive Credit Practices."
Banking Circular 182	"Issuance of 'Due Bills' to Customers Purchasing Securities"	Cautions national banks as to the implications under the federal securities and national banking laws of certain practices involving "due bills" in securities transactions and sets forth guidelines concerning the proper use of "due bills."
Banking Circular 235	"International Payments Systems Risks"	Discusses risks associated with large payment systems at a general level and discusses methods that should be used to contain risk.
Bulletin 1999-20	"Certification Authority Systems: Guidance for Bankers and Examiners"	Explains the background and risks associated with certification authority systems.
Bulletin 2010-25	"Property Assessed Clean Energy (PACE) Programs: Supervisory Guidance"	Federal Housing Finance Agency statement that highlights concerns and regulatory expectations regarding certain state and local lending programs for energy retrofitting of residential and commercial properties, frequently termed a Property Assessed Clean Energy (PACE) program.

Appendix B: Interagency Guidance That Continues to Apply to FSAs

OCC Document	Interagency Guidance	Comments
Banking Bulletin 1993-35	"Interagency Definition of Special Mention Assets"	Clarifies use of the Special Mention Assets definition for regulatory supervision purposes.
Banking Bulletin 1993-38	"Interagency Examination Coordination Guidelines"	Addresses the coordination and cooperation among the federal banking agencies in examining and supervising banking organizations.
Bulletin 1995-16	"Appraisals: Affordable Housing Loans and Market Value"	Clarifies the use of appraisals for affordable housing loans.
Bulletin 1997-14	"Uniform Financial Institutions Disclosure Rating System and Disclosure of Component Ratings: Questions and Answers"	Questions and Answers regarding the revised rating system and the addition of the Sensitivity to Market Risk component.
Bulletin 1998-20	"Investment Securities: Policy Statement"	Outlines effective risk management practices for a bank's securities and end-user derivatives activities.
Bulletin 1998-32	"Civil Money Penalties: Interagency Statement"	General guidance concerning the criteria used by the federal financial institutions regulatory agencies in the assessment of civil money penalties.
Bulletin 1999-25	"Mortgage Brochure: Message to Bankers/Examiners"	Consumer brochure about shopping and negotiating for a mortgage.
Bulletin 2001-15	"Loans Held for Sale: Guidance"	Covers the accounting and reporting treatment for certain loans that are sold directly from the loan portfolio or transferred to a held-for-sale account.
Bulletin 2001-43	"Consumer Protections for Depository Institution Sales of Insurance: Interagency Guidance"	Interagency response to questions from the American Bankers Association and the American Bankers Insurance Association regarding implementation of the final rule.
Bulletin 2003-1	"Credit Card Lending: Account Management and Loss Allowance Guidance"	Purpose is to ensure that financial institutions conduct credit card lending in a safe and sound manner by establishing sound account management, risk management, and loss allowance practices.
Bulletin 2003-9	"Mortgage Banking: Interagency Advisory on Mortgage Banking"	Highlights concerns and provides guidance regarding mortgage-banking activities, primarily in the valuation and hedging of mortgage-servicing assets.
Bulletin 2003-36	"Liquidity Risk Management: Interagency Advisory on the use of the Federal Reserve's Primary Credit Program in Effective Liquidity Management"	Provides background on the Federal Reserve's discount window credit programs and guidance on the appropriate use of the primary credit program in developing an effective liquidity risk management program.
Bulletin 2004-02	"Banks/Thrifts Providing Financial Support to Funds Advised by the Banking Organization or its Affiliates: Interagency Guidance"	Alerts banking organizations and examiners of the safety and soundness implications of, and the legal impediments to, a bank providing financial support to investment funds advised by the bank, its subsidiaries, or affiliates.
Bulletin 2004-24	"Suspicious Activity Reporting: Interagency Advisory: Federal Court Reaffirms Protections for Financial Institutions Filing Suspicious Activity Reports"	Informs financial institutions about a federal court case that reaffirmed the statutory protection from civil liability arising out of the filing of Suspicious Activity Reports by financial institutions and their employees.
Bulletin 2004-26	"Certain Foreign Accounts: Guidance on Accepting Accounts From Foreign Governments, Foreign Embassies and Foreign Political Figures"	Guidance on accepting accounts from foreign governments, foreign embassies and foreign political figures.
Bulletin 2006-43	"Home Equity Lending: Addendum to OCC Bulletin 2005-22"	Addresses the timing and content of communications with consumers obtaining open-end home equity lines of credit (HELOC) that contain an interest-only feature.
Bulletin 2007-01	"Complex Structured Finance Transactions: Notice of Final Interagency Statement"	Sound practices concerning complex structured finance activities that may pose heightened legal or reputational risks to financial institutions.
Bulletin 2007-35	"Bank Secrecy Act/Anti-Money Laundering: 2007 National Money Laundering Strategy"	The 2007 National Money Laundering Strategy identifies areas where federal agencies will continue to enforce or expand existing anti-money laundering guidance.
Bulletin 2007-49	"Pandemic Planning: Interagency Guidance"	Business continuity planning that should be in place to minimize the potential adverse effects of a pandemic.
Bulletin 2008-20	"Final Guidance on Supervisory Review Process (Pillar 2): Supervisory Guidance on Pillar 2 Reviews Related to Implementation of Basel II Advanced Approaches Rule"	Outlines the supervisory review process for banking organizations implementing the advanced capital adequacy framework known as Basel II Advanced Approaches Rule.
Bulletin 2008-31	"Regulatory Capital Impact of Losses on Fannie Mae and Freddie Mac Preferred Stock: Interagency Statement"	Allows banking organizations to recognize the effect of the tax change enacted in section 301 of the Emergency Economic Stabilization Act of 2008 (EESA) in their third-quarter 2008 regulatory capital calculations.

Appendix C: Rescinded OTS Documents

OTS document	Title	Reason rescinded	Prevailing document
CEO Memo 224	"Advisory on Hurricane Katrina"	Replaced	OCC Bulletin 2012-28, "Responding to a Declaration of a Legal Holiday or a Natural Disaster: Supervisory Guidance on Natural Disasters and Other Emergency Conditions"
CEO Memo 372	"Evaluation and Selection of PMI Providers"	Replaced	OTS Examination Handbook (EH) 212, "One- to Four-Family Residential Real Estate Lending" (OTS incorporated CEO 372 into EH 212 prior to the OTS integration with the OCC)
Thrift Bulletin 80b	"OTS Policy Statement on Minority Depository Institutions"	Replaced	"Policy Statement on Minority National Banks and Federal Savings Associations," (June 7, 2013)

Topic(s):

Bank Management