Interagency Statement on Dodd-Frank Act Section 612 Restrictions on Conversions of Troubled Banks

The FDIC, OCC, Federal Reserve, and the Conference of State Bank Supervisors have released a statement that explains the requirements of Section 612 of the Dodd-Frank Act and the processes through which banks or savings associations apply to convert their charters. Section 612 imposes restrictions on conversions of certain national banks or federal savings associations to state-chartered institutions and on conversions of certain state-chartered banks or savings associations to national banks or federal savings associations. The statement clarifies supervisory expectations for regulatory conversion requests subject to Section 612, and describes the general prohibition on charter conversions by certain insured depository institutions. This prohibition occurs when the institution is subject to a cease-and-desist order or other formal enforcement action issued by, or a memorandum of understanding entered into with, its current federal banking agency or state bank supervisor concerning a significant supervisory matter. It details also the circumstances under which an institution may be eligible for an exception to the conversion prohibition.

Cross-Reference(s): Dodd-Frank Section 612 [Restriction on conversions of troubled banks].

View statement in full here (links externally to OCC website).