The Office of the Comptroller of the Currency ("OCC") announced on December 20, 2016 that it is adopting a final rule to implement provisions of the National Bank Act that provide the legal framework for receiverships for uninsured banks. The OCC published a proposed rule on September 13, 2016 and it is adopting the proposed rule without changes.

The OCC stated that "the OCC believes that the clarification of the receivership framework for uninsured banks will be beneficial to financial market participants and the broader community of regulators. The adoption of the final rule is not intended to suggest that the OCC anticipates a need to resort in the near future to receiverships for the uninsured banks it supervises."

Notwithstanding the above position of the OCC, a primary purpose of the final rule is to have a receivership framework in place to facilitate the creation (and dissolution) of special purpose national bank charters for innovative lenders, or "fintech" providers. The special purpose national bank charters are proposed to be issued to entities that either make loans or pay checks, but do not take deposits. 

Deposit taking institutions chartered by the OCC or a state are insured by the FDIC and should they fail, the FDIC is appointed receiver. The FDIC has a regime of laws and regulations that govern the operations of the FDIC as receiver, but no such formal set of laws or regulations exist for OCC chartered banks that do not take deposits. While there are approximately 52 uninsured trust banks chartered by the OCC, when they appear to be in a weakened condition, there typically has been sufficient time for the OCC to rehabilitate or resolve the institution without having to appoint a receiver.

A special purpose national bank that will be chartered by the OCC will have a business model vastly different than a trust bank and it will require different treatment by the OCC should that bank exhibit weaknesses that could result in its failing. The final regulations adopted by the OCC will track the powers that the FDIC utilizes in resolving failed banks when it is appointed receiver by either the OCC or the state that charters the bank.

Key points of the final rule issued by the OCC include:

• Appointment of receiver and notice to the public. Receivers for uninsured banks will generally be appointed under the same grounds that apply to the appointment of the FDIC as receiver for an insured national bank. The OCC will provide the public with the statutorily required three-month notice of the appointment of a receiver, as well as instructions for submitting claims against the receivership.
• Submission of claims. Persons with claims against the receivership may submit claims to the OCC for a determination or submit their claims to a court for adjudication in addition to, or as an alternative to, filing a claim with the OCC.
• Order of priorities. The order of priorities for payment of administrative expenses of the receiver and claims against the uninsured bank in receivership will be as follows: (1) administrative expenses of the receiver; (2) unsecured creditors, including secured creditors to the extent their claims exceed their valid and enforceable security interests; (3) creditors of the uninsured bank, if any, whose claims are subordinated to general creditor claims; and (4) shareholders of the uninsured bank. All administrative expenses of the receivership will be paid out of the assets of the bank in receivership.
• Powers and duties of the receiver. The powers and duties of the receiver will include taking possession of the books and records of the uninsured bank, collecting on debts and claims owed to the bank, selling or compromising bad or doubtful debts (with court approval), and selling the uninsured bank's real and personal property (also with court approval). The receiver will have additional powers from case law on receiverships, such as the authority to (1) repudiate certain contracts; (2) recover fraudulent transfers; and (3) enforce collection of notes from debtors and collateral, regardless of the existence of side arrangements that would otherwise defeat the collectability of such notes.
• Payments on claims. After administrative expenses of the receivership have been paid, the OCC will make payments on proved claims from available receivership funds, applying the priority of claims in the rule. The OCC will make payments, if any, periodically, as the receiver liquidates the assets of the uninsured bank.
• Source of funds for payment of claims. Dividend payments to creditors and other claimants of an uninsured bank will be made solely from receivership funds, if any, paid to the OCC by the receiver after payment of the expenses of the receiver.
• Status of fiduciary and custodial assets and accounts. Assets held by an uninsured bank in a fiduciary or custodial capacity, as designated on the uninsured bank's books and records, will not be part of the uninsured bank's general assets and liabilities held in connection with its other business and will not be considered a source for payment of unrelated claims of creditors and other claimants.