OCC finalizes measure to eliminate ‘unnecessary’ licensing rules

WASHINGTON — The Office of the Comptroller of the Currency finalized a measure aimed at eliminating certain licensing and merger requirements that the agency says are outdated.

Among the core changes in the final rule unveiled Monday, more national banks will be able to use the OCC's expedited review process to approve certain corporate transactions. Banks will also be able to follow certain review procedures usually reserved for state-chartered banks when they are “not inconsistent with applicable federal statutes,” according to the rule.

In addition, the final rule allows banks to apply to invest in enterprises not directly subject to OCC supervision and examination, provided the non-controlling investments “pose minimal risk to the national bank’s safety and soundness."

The final rule amounts to “eliminating unnecessary requirements consistent with safe, sound, and fair operation of the federal banking system,” the OCC wrote in a press release. “It is part of the OCC’s continual effort to modernize its rules and reduce [unnecessary] regulatory burden.”

Bloomberg News

Shortly after the proposal to eliminate outdated requirements was released in early March, some community advocates expressed concern that certain changes proposed within the context of the Community Reinvestment Act could make it more difficult for critics of bank mergers to raise their concerns in the public feedback process.

In the March proposal, the OCC added more specific standards to determine when the agency can ignore “adverse comments” seeking to halt a bank merger on CRA grounds, notably by introducing the term “non-substantive” as a criteria to disregard public feedback. If the comment is “a generalized opinion … lacking factual or analytical support,” the OCC wrote, the agency would not consider the issue raised for any additional review.

In the final rule, the OCC defended the new criteria from critics by citing several Supreme Court rulings that established the standards of evidence for administrative proceedings.

“Accordingly, the OCC believes that the criteria for being ‘non-substantive’ set forth in the amendment provides a clear standard for when the OCC will consider a comment to be non-substantive and provides commenters with guidance on submitting views on a filing,” the agency wrote in the final rule.

“Further, the OCC notes that if a commenter believes that the OCC inadequately considered a comment, they may have grounds to challenge the OCC’s licensing decision under the [Administrative Procedure Act].”