OCC Requests Comment on Proposal to Update Activities and Operations Rules and its Rules on Digital Activities

WASHINGTON–The Office of the Comptroller of the Currency (OCC) today released two issuances for public comment.

The OCC published a Notice of Proposed Rulemaking (NPR) for public comment to update its rules for national bank and federal savings association activities and operations. The agency also released an Advance Notice of Proposed Rulemaking (ANPR) seeking comment on rules on national banks’ and federal savings associations’ (banks) digital activities.

The NPR is part of the OCC’s continual effort to modernize its rules and remove unnecessary requirements to relieve banks of unnecessary burden, encouraging economic opportunity and promoting the safe, sound, and fair operation of the federal banking system. The ANPR is part of the agency’s effort to support the evolution of the federal banking system and its ability to meet the needs of the consumers, businesses, and communities it serves. Comments on both issuances are due August 3, 2020.

The NPR would make various changes to 12 CFR 7 to update or eliminate outdated regulatory requirements that no longer reflect the modern financial system and clarify and codify recent OCC interpretations. Among the significant proposed changes are:

• incorporating and streamlining OCC interpretations addressing permissible derivatives activities for national banks;
• codifying OCC interpretations to permit national banks and federal savings associations to engage in certain tax equity finance transactions;
• codifying OCC interpretations regarding national bank membership in payment systems and clarifying that federal savings associations are subject to the same requirements as national banks;
• expanding the ability of national banks to choose corporate governance provisions under state law;
• clarifying the extent to which a national bank may adopt anti-takeover provisions permissible under state corporate governance law;
• clarifying when national bank participation in a financial literacy program on the premises of, or a facility used by, a school or other organization would not be a branch; and
• codifying OCC interpretations of the National Bank Act relating to capital stock issuances and repurchases.

The ANPR invites comment on its regulations at 12 CFR 7, subpart E and 155, and any other banking issues related to digital technology and innovation, including:

• whether the legal standards in 12 CFR 7, subpart E, and 12 CFR 155 are sufficiently flexible and clear in light of the technological advances that have transformed the financial industry over the past two decades;
• whether these legal standards create unnecessary hurdles or burdens to innovation by banks;
• whether there are digital banking activities or issues that are not covered by these rules that the OCC should address (e.g., digital finders’ activities, certain software, and correspondent services);
• what activities related to cryptocurrencies or cryptoassets are financial services companies or bank customers engaged in and what are the barriers or obstacles to further adoption of crypto-related activities in the banking industry;
• how is distributed ledger technology used or potentially used in activities related to banking;
• how are artificial intelligence and machine learning techniques used or potentially used in activities related to banking;
• what new payments technologies and processes should the OCC be aware of and what are the potential implications of these technologies and processes for the banking industry;
• what new or innovative tools do financial services companies use to comply with regulations and supervisory expectations (i.e., "regtech");
• what issues are unique to smaller institutions regarding the use and implementation of innovative products, services, or processes that the OCC should consider;
• what other changes to the development and delivery of banking products and services should the OCC be aware of and consider; and
• whether there are issues the OCC should consider in light of changes in the banking system that have occurred in response to the COVID-19 pandemic.

Comments received on this ANPR may inform the development of specific policy proposals or future rulemakings.

Related Links

• Notice of Proposed Rulemaking (PDF)
• Advance Notice of Proposed Rulemaking (PDF)