On December 20, the OCC issued its Final Rule on receiverships for uninsured national banks which implements the National Bank Act’s statutory framework for uninsured bank resolution.

The Final Rule is significant because it addresses an important question raised by the OCC’s proposed special purpose national bank charter for fintech companies, namely what to do if one should fail.  The OCC issued the proposed rule on September 13, 2016, received eleven comments by the November 14 deadline and finalized the rule without change.  Pursuant to the Final Rule, the OCC can appoint a receiver for an uninsured national bank if the bank’s board of directors has less than 5 members and for any of the reasons the FDIC may appoint a receiver for an insured bank.  Upon the appointment of a receiver, the OCC is required to publish notice of the receivership for three consecutive months to provide creditors and shareholders the opportunity to submit their claims.  The due date for any claims must be at least 30 days after the notice period ends.  The OCC will review all submitted claims to determine their validity and approve the amounts.  After determining the appropriate amounts for all claims, the OCC will pay the uninsured bank’s creditors in order of priority: (i) the receiver’s administrative expenses, (ii) unsecured creditors (including secured creditors whose claim extends beyond their enforceable security interest), (iii) creditors with subordinated claims, (iv) the uninsured bank’s shareholders.  The OCC notes that it has not had to appoint a receiver since shortly after the creation of the FDIC and does not believe it will have to anytime soon, but issued the Final Rule to provide clarity, especially in the face of the newly proposed “FinTech charter.”   The Final Rule is effective January 19, 2017.