Shearman & Sterling LLP | Financial Regulatory Developments Focus | <span ><font >US Office of the Comptroller of the Currency Proposes to Permit Certain Federal Savings Associations to Operate with National Bank Powers</font ></span >
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  • US Office of the Comptroller of the Currency Proposes to Permit Certain Federal Savings Associations to Operate with National Bank Powers
    09/10/2018

    The U.S. Office of the Comptroller of the Currency published a notice of proposed rulemaking with respect to permitting federal savings associations with total consolidated assets of $20 billion or less as of December 31, 2017 (“covered savings associations”), to elect to operate with the same rights and privileges as a national bank.  The proposed rule seeks to implement Section 206 of the Economic Growth, Regulatory Relief, and Consumer Protection Act, which amends the Home Owners’ Loan Act, and is intended to provide business flexibility for certain federal savings associations to adapt to change without a corresponding requirement to change charters.   Under the proposed rule, a covered savings association has the same rights and privileges as a national bank that has its main office situated in the same location as the home office of the covered savings association, and is subject to the same duties, restrictions, penalties, liabilities, conditions and limitations that would apply to such a national bank.  The covered savings institution, however, will retain its federal savings association charter, and will be treated as a federal savings association for governance and other purposes, including consolidation, merger, dissolution, conversion, conservatorship and receivership. Treatment as a covered savings association would generally continue even after the institution’s total consolidated assets exceed $20 billion.  Comments to the proposed rule are due no later than November 19, 2018.

    View full text of the proposal.