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OCC Bulletin 2002-20 | May 23, 2002

Implicit Recourse in Asset Securitization: Policy Implementation


Chief Executive Officers of All National Banks, Department and Division Heads, and All Examining Personnel

The guidance attached to this bulletin continues to apply to federal savings associations.

The attached "Interagency Guidance on Implicit Recourse in Asset Securitizations" was issued jointly by the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision on May 23, 2002. The purpose of this guidance is to assist both bankers and examiners in assessing what types of post-sale actions may, or may not, constitute implicit recourse. However, the ultimate decision regarding risk-based capital treatment for these actions rests with the institution's primary regulator.

The attached statement highlights several examples of post-sale actions taken by institutions with respect to securitized assets. Examiners and bankers should be aware that, depending upon the specific circumstances, such actions could result in additional risk-based capital requirements.1

For further information about this bulletin, contact the Office of the Chief National Bank Examiner (202) 649-6370.


Michael L. Brosnan
Deputy Comptroller for Risk Evaluation

Tommy Snow
Director for Capital Policy

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1 While the banking agencies are concerned about the use of covenants linked to supervisory actions in general, this guidance pertains specifically to covenants that use supervisory actions as triggers for early amortization or the transfer of servicing.