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Powers of National Banks and Federal Savings Associations

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Powers of National Banks and Federal Savings Associations COMPARISON OF THE POWERS OF NATIONAL BANKS AND FEDERAL SAVINGS ASSOCIATIONS July 1, 2019 See also the companion document entitled “Key Differences Among National Bank, Federal Savings Association, and Covered Savings Association Requirements” on the OCC website. i Forward This chart is intended to provide a summary of the basic powers of national banks and federal savings associations (FSAs). It is not intended to be a complete inventory of the activities permitted for either type of charter. The chart should not be cited as precedent. The powers identified in this document are evolving and the statutes and regulations cited may be revised in the future. In addition, different facts than those presented in relevant precedent may lead to different results. Therefore, institutions should not engage in activities in reliance on this document and instead should review the authorities cited here and other relevant law, precedent, and Office of the Comptroller of the Currency (OCC) guidance before engaging in an activity. On July 21, 2011, the Dodd-Frank Wall Street Reform and Consumer Protection Act transferred certain rulemaking and examination authority over FSAs from the Office of the Thrift Supervision (OTS) to the OCC. Pursuant to this legislation, OTS interpretive letters cited in this chart remain in effect and are enforceable by the OCC until repealed or superseded. Users of this chart should note that there are certain national bank powers allowed under statutes, regulations, or interpretations for which the former OTS or the OCC has not issued a comparable determination for FSAs. We have indicated such lack of formal determination by noting “No express precedential determination” with respect to relevant powers. This statement does not indicate that the OCC would either approve or deny an FSA’s request to engage in this activity. Note for operating subsidiaries. In general, national banks and FSAs may conduct activities in an operating subsidiary that are permissible for a national bank or FSA, respectively, to engage in directly. Therefore, unless otherwise noted the activities permissible for national banks or FSAs also are permitted for their operating subsidiaries. Note for Covered Savings Associations: Section 206 of the Economic Growth, Regulatory Relief, and Consumer Protection Act, as implemented by 12 CFR part 101, permits certain FSAs to elect to operate as a “covered savings association.” A covered savings association has the same rights and privileges and is subject to the same duties, restrictions, penalties, liabilities, conditions, and limitations as a national bank. For purposes of governance and specific corporate activities enumerated in the statute, a covered savings association is treated as an FSA. Therefore, unless noted otherwise, activities listed in this chart as permissible for national banks are permissible for covered savings associations. i TABLE OF CONTENTS I. DEPOSITS 1. Brokered Deposits ............................................................................................................................... 1 2. Demand Deposits (checking accounts), Negotiable Order of Withdrawal (NOW) Accounts and Money Market Deposit Accounts ................................................................................................... 1 3. Public Funds ......................................................................................................................................... 1 4. Special Deposits (receipts of money, financial instruments, or other property for safe-keeping) .......... 2 5. Time Deposits (CDs, savings accounts, and retirement accounts) ...................................................... 2 6 Pledging Assets to Secure Private Deposits ……………………………………………………………….2 II. LENDING A. Commercial Loans 1. Commercial Loans - In General (secured or unsecured) ...................................................................... 3 2. Equity Kicker Loans ............................................................................................................................. .3 3. Financial Institution, Broker and Dealer Loans ..................................................................................... 3 4. Letters of Credit and Standby Letters of Credit (Independent Undertakings)........................................ 4 5. Loan Participations ............................................................................................................................... 4 6. Nonresidential Real Estate Secured Loans .......................................................................................... 4 7. Short-term Repurchase Agreements .................................................................................................... 4 8. Tax Equity Financing …………………………………………………………………………………………...4 B. Consumer Loans 1. Credit Card Loans ................................................................................................................................. 5 2. Deposit Account Secured Loans .......................................................................................................... 5 3. Education Loans ................................................................................................................................... 5 4. Native American Organization Loans .................................................................................................. 5 5. Other Personal, Family, or Household Purpose Loans (i.e., consumer loans) ...................................... 5 ii 6. Overdraft Loans .................................................................................................................................... 5 7. Stock-Secured Loans........................................................................................................................... 5 C. Residential Loans 1. Construction Loans for Residential Real Estate (unsecured) ................................................................ 6 2. Home Improvement Loans (unsecured)................................................................................................ 6 3. Residential Real Estate Secured Loans (secured) ............................................................................... 6 4. Shared Appreciation Mortgage (“SAM”) Loans ..................................................................................... 6 5. Third-Party Loan Origination ................................................................................................................. 6 6. Manufactured Home Financing Loans .................................................................................................. 6 7. Reverse Mortgages..……………………………………………………………………………………… … 6 D. Leasing 1. Leasing Real or Personal Property ....................................................................................................... 7 2. Residential Net Leasing Arrangements (Sharia-compliant Murabaha Financing Transactions) ........... 8 III. INSURANCE AND ANNUITIES 1. Insurance Sales - In General ................................................................................................................ 9 2. Annuities ............................................................................................................................................... 9 3. Credit Insurance ................................................................................................................................. 10 4. Municipal Bond Insurance ................................................................................................................... 10 5. National Trust Companies - Sale of Insurance………………………………………………………......…10 6. Reinsurance - Credit Insurance …………………………………………………………………………….. 10 7. Reinsurance - Mortgage Insurance ..................................................................................................... 11 8. Safe Deposit Box Liability Insurance .................................................................................................. 11 9. Self-Insurance ..................................................................................................................................... 11 10. Title Insurance .................................................................................................................................... 12 11. Underwriting of Insurance ................................................................................................................... 12 iii IV. SECURITIES AND DERIVATIVES 1. Asset Securitization ............................................................................................................................ 13 2. Brokerage of Securities ....................................................................................................................... 13 3. Clearing and Execution Services ........................................................................................................ 14 4. Derivatives Activities ........................................................................................................................... 15 5. Investment Advice .............................................................................................................................. 15 6. Mutual Fund Activities ......................................................................................................................... 17 7. Securities Lending .............................................................................................................................
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