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Subject: Lending Limits
Date: January 4, 2013
To: Chief Executive Officers of All National Banks and Federal Savings Associations, Department and Division Heads, All Examining Personnel, and Other Interested Parties
Description: Compliance Extension Final Rule
The Office of the Comptroller of the Currency (OCC) has issued a final rule that extends from January 1, 2013, to July 1, 2013, the temporary exception for the application of its lending limits rule, 12 CFR 32, to certain credit exposures arising from derivative transactions and securities financing transactions.
Section 610 of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 revised, for purposes of the lending limits, the statutory definition of loans and extensions of credit to include certain credit exposures arising from a derivative transaction, repurchase agreement, reverse repurchase agreement, securities lending transaction, or securities borrowing transaction. In June 2012, the OCC issued an interim final rule implementing this statutory change and integrating the OCC’s lending limits rules for national banks and federal and state savings associations into part 32. This rule was effective July 21, 2012.1 The rule gave institutions until January 1, 2013, to comply with the rule’s requirements as to derivative transactions and securities financing transactions. The OCC provided this short-term exception under its lending limits authority to allow time for these institutions to comply with the new standard.
Based on the comments received on the interim final rule, the OCC finds that the January 1 deadline should be extended. This deadline did not provide sufficient time for institutions to develop and implement appropriate policies and procedures to comply with the rule’s section 610-related provisions. Therefore, in advance of finalizing the interim final rule, the OCC has amended 12 CFR 32 to extend this temporary exception to July 1, 2013. Although the agency previously provided public notice of its intention to extend the exception to April 1, 2013,2 the OCC has since determined that it is more appropriate to extend the exception an additional three months to July 1. The agency expects to issue a final lending limits rule in the first quarter of 2013.
The OCC notes that, notwithstanding this extension, it retains the ability to address credit exposures that present undue concentrations on a case-by-case basis through its existing safety and soundness authorities.
Please direct questions and comments to any of the following OCC officials: Jonathan Fink, Assistant Director, Bank Activities and Structure Division, (202) 649-5593; Heidi M. Thomas, Special Counsel, Legislative and Regulatory Activities Division, (202) 649-5490; or Kurt Wilhelm, Director for Financial Markets, (202) 649-6437.
1 77 FR 37265 (June 21, 2012).
2 OCC Bulletin 2012-36, “Lending Limits: Notice of Compliance Extension,” November 14, 2012.