On January 8, the OCC announced it had issued an NPRM in the Federal Register to clarify its purported “longstanding authority” to charter national banks limited to the operations of trust companies and related activities. The proposed rule would amend 12 C.F.R. 5.20, replacing references to “fiduciary activities” with “operations of a trust company and activities related thereto,” aligning regulatory language with statutory terms under the National Bank Act. The OCC emphasized that the proposal does not alter its chartering authority; rather, the agency stated it seeks to eliminate confusion regarding the permissible scope of activities for national trust banks, including both fiduciary and non-fiduciary functions such as custody and safekeeping.
Of note, the OCC addressed confusion around, and concerns stemming from, proposed regulatory amendments to 12 C.F.R. 5.20 in 2003, contending that that prior language was never intended to prevent national trust banks from engaging in nonfiduciary activities and reaffirming its interpretation permitting such functions. The OCC requested public comments on all aspects of the proposed rule, specifically inviting feedback on alternative language that could further clarify its chartering authority for national banks focused on trust operations. Comments on the proposal are due on or before February 11.
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