Interpretations and Actions: June 2004

Vol. 17, No. 6

Interpretive Letters

Letter No.	Topic
991	Letter concludes that for this particular situation involving a solicitation letter offering homeowners insurance products to loan customers of a national bank subsidiary, the OCC's review does not indicate a prohibited tying arrangement. 03/11/2004
992	National bank permissibly acquired warrants of borrower in addition to, or in lieu of, interest on loan to borrower (12 CFR 7.1006). Bank wishes to dispose of warrants, but represents that there is no market in which it may sell the warrants. Under the specific circumstances and conditions represented by the Bank, the letter authorizes the Bank to exercise the warrants in order to immediately sell the resulting stock. 05/10/2004
993	Letter states that the activities, including data and payments processing, of the Clearing House at that time were part of or incidental to the business of banking, and thus, that it was permissible for national banks to own interests in the Clearing House. 05/16/1997

Community Development Investment Letters

Letter No.	Topic
2002-1	Investment in shares of CDC subsidiary of affiliated national bank — A national bank may purchase shares in an existing community development corporation (CDC) subsidiary that previously had been formed and capitalized by another affiliated national bank. As a result of the new investments, the CDC subsidiary expanded its products and services to the states that the new shareholders served. 02/06/2002
2002-2	Investment financing to renovate and lease a commercial building to Texas Workforce Commission — A national bank's community development corporation (CDC) subsidiary may conduct various community and economic development activities that primarily benefit low- and moderate-income individuals, low- and moderate-income areas, or other areas targeted for redevelopment by local, state, federal, or tribal governments. Approved activities include investing in an entity that renovated a commercial building leased to a state government agency that provides training to unemployed low- and moderate-income individuals and assists them in finding employment. 04/16/2002
2002-3	Investment financing for a state chartered school — A national bank's community development corporation (CDC) subsidiary may conduct various community and economic development activities that primarily benefit low- and moderate-income individuals, low- and moderate-income areas, or other areas targeted for redevelopment by local, state, federal, or tribal governments. Approved activities include providing financing to a corporation that owns and operates a charter school, funded by the state, that educates "at-risk" students, who are primarily low- and moderate-income and have exhibited behavioral or drug problems in other schools. 05/03/2002
2002-4	Investment financing to a medical student — A national bank's community development corporation (CDC) subsidiary may conduct various community and economic development activities that primarily benefit low- and moderate-income individuals, low- and moderate-income areas, or other areas targeted for redevelopment by local, state, federal, or tribal governments. Approved activities include providing financing the education of a medical student who had committed to work after graduation for a facility that provides medical services to low-income families. 05/03/2002
2002-5	Investment financing to small business owner — A national bank's community development corporation (CDC) subsidiary may conduct various community and economic development activities that primarily benefit low- and moderate-income individuals, low- and moderate-income areas, or other areas targeted for redevelopment by local, state, federal, or tribal governments. Approved activities include providing working capital for a convenience and hardware store in a low- and moderate-income community. 07/18/2002
2002-6	Investment financing for low- and moderate-income first-time homebuyers — A national bank's community development corporation (CDC) subsidiary may conduct various community and economic development activities that primarily benefit low- and moderate-income individuals, low- and moderate-income areas, or other areas targeted for redevelopment by local, state, federal, or tribal governments. Approved activities include providing financing at reduced rates to low- and moderate-income families that received subsidies under state and federal government programs for the purchase of their first homes. 09/23/2002
2002-7	Opinion of merchant banking regulation application of CDC investments — Merchant banking capital regulation does not apply to investments made in community development corporations (CDC) and community development projects. The merchant banking capital regulation, which established minimum capital requirements for certain equity investments in non-financial companies, does not apply to investments made in a CDC to promote the public welfare under 12 USC 24 (Eleventh). 11/27/2002
2002-8	Investment in partnership with Native American Nations — A national bank's community development corporation (CDC) subsidiary may provide financial support and financial services to assist economic development efforts of Native American Nationals directed toward low- and moderate-income communities. Specific proposed activities of the CDC include: (1) providing financial literacy services; (2) buying, selling, and leasing real estate, for example, in partnership with local housing authorities; ad (3) providing, servicing, and maintain ATMs and ATM and debit cards. 12/20/2002

Corporate Decisions

Letter No.	Topic
2004-9	Application to convert First Security Federal Savings Bank, Chicago, Illinois into FSFSB, N.A. and the application to merger FSFSB, N.A. with and into MB Financial Bank, N.A., Chicago, Illinois, under the title and charter of the latter. (Control Number 2004 CE 02 003), 05/18/2004
2004-10	Application to merge First National Bank and Trust, St. John, Kansas with and into American State Bank & Trust Company, N.A., Great Bend, Kansas under the charter and title of American State Bank & Trust Company, National Association. (Control Number 2004 WE 02 0016), 05/27/2004

Approvals with Conditions Enforceable under 12 U.S.C. 1818

Letter No.	Topic
638	Application by Commerce Bank, N.A., Cherry Hill, New Jersey, to establish a branch at Oak Tree Road and Plainfield Avenue, Edison, Middlesex County, New Jersey. (Control Number 2001 NE 05 0105), 05/19/2004

Charters with Standard Conditions

Letter No.	Topic
639	Application to establish a new national bank with the title of Sovereign Bank, National Association, Irving, Texas. (Control Number 2004 SO 01 0002), 05/19/2004

Final Enforcement Actions

Enclosed is a copy of the OCC's news release number 2004-47, announcing the availability of enforcement actions. Copies of the final actions are available by writing to the OCC, Public Reference Room, Mailstop 1-5, Washington, D.C. 20219. When ordering, specify the appropriate enforcement action number.

Community Reinvestment Act (CRA) Performance Evaluations

Enclosed is a list of CRA performance evaluations that became public during the period of May 15 through June 14, 2004.

PLEASE NOTE: Interpretive Letters and No-Objection Letters reflect the views of the Comptroller's legal staff. Corporate Decisions, CRA Decisions and Conditional Approvals are from the office of Licensing. The Community Development Investment Letters are from the office of Community Affairs. The list of CRA Ratings is from the Communications Division. For copies of the CRA evaluations, you may either contact the bank directly, or you may write to the Office of the Comptroller of the Currency (OCC) in any of three ways: by mail to the OCC, Attn: Public Information Room, Mail Stop 1-5, Washington, D.C. 20219; by fax to (202) 874-4448; or by email to FOIA-PA@occ.treas.gov. You may also write to the OCC for copies of enforcement actions and charters with standard conditions.

Members of the news media are encouraged to cite the letter number when reporting or summarizing documents from this package. This helps us to process single requests based upon your citation in a more timely manner.

The Office of the Comptroller of the Currency publishes INTERPRETATIONS AND ACTIONS monthly. Subscriptions are available at a rate of $175 per year by writing to the Comptroller of the Currency, ATTN: Accounts Receivable, Mail Stop 4-8, 250 E Street, S.W., Washington, DC 20219. Prepayment is requested. Suggestions, comments or questions may be sent to Jacqueline J. England, Comptroller of the Currency, Communications Division, Mail Stop 3-2, Washington, DC 20219.