OCC Clarifies Standards for Bank Licensing Filings

The OCC clarified its decisionmaking process on bank licensing filings and said that going forward, it will make all denials public.

In a bulletin, the OCC explained that under the governing regulation, 12 CFR 5.13 ("Decisions"), the OCC would return a "materially deficient" filing before any meaningful processing, stressing that applications must include all required information up front (including biographical and financial details for individuals, and background and financial reports for entities). The OCC reiterated that it could return a filing if a follow-up request did not produce adequate responses.

For new "de novo" bank charters, the OCC said organizers must define all products and services "with particularity," including how they would be operated. Organizers must also spell out the governance, risk-management, and compliance infrastructure to manage the relevant products and services. The OCC said that it intends to approve filings that meet the applicable criteria, condition approvals where needed for safe and sound operation, and deny filings that raise significant supervisory, Community Reinvestment Act, or compliance concerns, or that are inconsistent with law.

The OCC said it would notify a filer in writing of the reasons for any denial and would publish all denial decisions so the industry could see how it applied the criteria. The OCC said that a denial would not bar a later application.