Title 12
SECTION 5.53
5.53 Substantial asset change by a national bank or Federal savings association.
§ 5.53 Substantial asset change by a national bank or Federal savings association.(a) Authority. 12 U.S.C. 93a, 1818, 1462a, 1463, 1464, 1467a, and 5412(b)(2)(B).
(b) Scope. This section requires a national bank or a Federal savings association to obtain the approval of the OCC for a substantial asset change.
(c) Definition - (1) In general. Except as provide in paragraph (c)(2) of this section, substantial asset change means:
(i) The sale or other disposition of all, or substantially all, of the national bank's or Federal savings association's assets in a transaction or a series of transactions;
(ii) After having sold or disposed of all, or substantially all, of its assets, subsequent purchases or other acquisitions or other expansions of the national bank's or Federal savings association's operations;
(iii) Any other purchases, acquisitions or other expansions of operations that are part of a plan to increase the size of the national bank or Federal savings association by more than 25 percent in a one year period;
(iv) Any other material increase or decrease in the size of the national bank or Federal savings association or a material alteration in the composition of the types of assets or liabilities of the national bank or Federal savings association (including the entry or exit of business lines), on a case-by-case basis, as determined by the OCC; or
(v) Any change in the purpose of the charter of the national bank or Federal savings association as described in § 5.20(l)(2).
(2) Exceptions. The term “substantial asset change” does not include, and this section does not apply, to a change in composition of all, or substantially all, of a bank's or savings association's assets:
(i) That the bank or savings association undertakes in response to direction from the OCC (e.g., in an enforcement action pursuant to 12 U.S.C. 1818);
(ii) That is part of a voluntary liquidation under § 5.48, if the bank or savings association in liquidation has obtained the OCC's non-objection to its plan of liquidation under § 5.48 and has stipulated in its notice of liquidation to the OCC that its liquidation will be completed, the bank or savings association dissolved and its charter returned to the OCC within one year of the date it filed the notice of liquidation, unless the OCC extends the time period;
(iii) That occurs as a result of a bank's or savings association's ordinary and ongoing business of originating and securitizing loans; or
(iv) That are subject to OCC approval under another application to the OCC.
(d) Procedures - (1) Consultation. A national bank or Federal savings association considering a transaction or series of transactions that may constitute a material change under paragraph (c)(1)(iv) of this section must consult with the appropriate OCC supervisory office for a determination whether the OCC will require an application under this section. In determining whether to require an application, the OCC considers the size and nature of the transaction and the condition of the institutions involved.
(2) Approval requirement. A national bank or Federal savings association must file an application and obtain the prior written approval of the OCC before engaging in a substantial asset change.
(3) Factors - (i) In general. (A) In determining whether to approve an application filed under paragraph (d)(2) of this section, the OCC considers the following factors:
(1) The capital level of any resulting national bank or Federal savings association;
(2) The conformity of the transaction to applicable law, regulation, and supervisory policies;
(3) The purpose of the transaction;
(4) The impact of the transaction on safety and soundness of the national bank or Federal savings association; and
(5) The effect of the transaction on the national bank or Federal savings association's shareholders, depositors, other creditors, and customers.
(B) The OCC may deny the application if the transaction would have a negative effect in any of these respects.
(ii) Additional factors. The OCC's review of any substantial asset change that involves the purchase or other acquisition or other expansions of the bank's or savings association's operations or that involves a change in the purpose of the bank's or association's charter, as described in § 5.20(l)(2), will include, in addition to the foregoing factors, the factors governing the organization of a bank or savings association under § 5.20.
(e) Exceptions to rules of general applicability. Sections 5.8, 5.10, and 5.11 do not apply with respect to applications filed pursuant to this section. However, if the OCC concludes that an application presents significant or novel policy, supervisory, or legal issues, the OCC may determine that some or all of the provisions of §§ 5.8, 5.10, and 5.11 apply.
[80 FR 28462, May 18, 2015, as amended at 82 FR 8104, Jan. 23, 2017; 85 FR 80466, Dec. 11, 2020]