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COMPARISON OF THE POWERS OF NATIONAL BANKS ANDFEDERAL SAVINGS ASSOCIATIONSJuly 1, 2019See also the companion document entitled “Key Differences Among National Bank, Federal Savings Association, and Covered SavingsAssociation Requirements” on the OCC website.i
ForwardThis chart is intended to provide a summary of the basic powers of national banks and federal savings associations (FSAs). It is notintended to be a complete inventory of the activities permitted for either type of charter. The chart should not be cited as precedent. Thepowers identified in this document are evolving and the statutes and regulations cited may be revised in the future. In addition, differentfacts than those presented in relevant precedent may lead to different results. Therefore, institutions should not engage in activities inreliance on this document and instead should review the authorities cited here and other relevant law, precedent, and Office of theComptroller of the Currency (OCC) guidance before engaging in an activity.On July 21, 2011, the Dodd-Frank Wall Street Reform and Consumer Protection Act transferred certain rulemaking and examinationauthority over FSAs from the Office of the Thrift Supervision (OTS) to the OCC. Pursuant to this legislation, OTS interpretive letterscited in this chart remain in effect and are enforceable by the OCC until repealed or superseded. Users of this chart should note thatthere are certain national bank powers allowed under statutes, regulations, or interpretations for which the former OTS or the OCC hasnot issued a comparable determination for FSAs. We have indicated such lack of formal determination by noting “No expressprecedential determination” with respect to relevant powers. This statement does not indicate that the OCC would either approve ordeny an FSA’s request to engage in this activity.Note for operating subsidiaries. In general, national banks and FSAs may conduct activities in an operating subsidiary that arepermissible for a national bank or FSA, respectively, to engage in directly. Therefore, unless otherwise noted the activities permissiblefor national banks or FSAs also are permitted for their operating subsidiaries.Note for Covered Savings Associations: Section 206 of the Economic Growth, Regulatory Relief, and Consumer Protection Act, asimplemented by 12 CFR part 101, permits certain FSAs to elect to operate as a “covered savings association.” A covered savingsassociation has the same rights and privileges and is subject to the same duties, restrictions, penalties, liabilities, conditions, andlimitations as a national bank. For purposes of governance and specific corporate activities enumerated in the statute, a coveredsavings association is treated as an FSA. Therefore, unless noted otherwise, activities listed in this chart as permissible for nationalbanks are permissible for covered savings associations.i
TABLE OF CONTENTSI.DEPOSITS1.2.3.4.5.6II.Brokered Deposits . 1Demand Deposits (checking accounts), Negotiable Order of Withdrawal (NOW) Accountsand Money Market Deposit Accounts . 1Public Funds . 1Special Deposits (receipts of money, financial instruments, or other property for safe-keeping) . 2Time Deposits (CDs, savings accounts, and retirement accounts) . 2Pledging Assets to Secure Private Deposits .2LENDINGA.Commercial Loans1.2.3.4.5.6.7.8.Commercial Loans - In General (secured or unsecured) . 3Equity Kicker Loans . .3Financial Institution, Broker and Dealer Loans . 3Letters of Credit and Standby Letters of Credit (Independent Undertakings). 4Loan Participations . 4Nonresidential Real Estate Secured Loans . 4Short-term Repurchase Agreements . 4Tax Equity Financing .4B.Consumer Loans1.2.3.4.5.Credit Card Loans . 5Deposit Account Secured Loans . 5Education Loans . 5Native American Organization Loans . 5Other Personal, Family, or Household Purpose Loans (i.e., consumer loans). 5ii
III.6.7.Overdraft Loans . 5Stock-Secured Loans. 5C.Residential Loans1.2.3.4.5.6.7.Construction Loans for Residential Real Estate (unsecured). 6Home Improvement Loans (unsecured). 6Residential Real Estate Secured Loans (secured) . 6Shared Appreciation Mortgage (“SAM”) Loans . 6Third-Party Loan Origination . 6Manufactured Home Financing Loans . 6Reverse Mortgages. 6D.Leasing1.2.Leasing Real or Personal Property . 7Residential Net Leasing Arrangements (Sharia-compliant Murabaha Financing Transactions) . 8INSURANCE AND ANNUITIES1.2.3.4.5.6.7.8.9.10.11.Insurance Sales - In General . 9Annuities . 9Credit Insurance . 10Municipal Bond Insurance. 10National Trust Companies - Sale of Insurance . 10Reinsurance - Credit Insurance . 10Reinsurance - Mortgage Insurance . 11Safe Deposit Box Liability Insurance . 11Self-Insurance. 11Title Insurance . 12Underwriting of Insurance . 12iii
IV.SECURITIES AND DERIVATIVES1.2.3.4.5.6.7.8.9.10.V.TRUST AND OTHER FIDUCIARY SERVICES1.VI.Asset Securitization . 13Brokerage of Securities. 13Clearing and Execution Services . 14Derivatives Activities . 15Investment Advice . 15Mutual Fund Activities . 17Securities Lending . 17Sweeps . 17Underwriting of Securities . 18Proprietary Trading . .18Trust and Other Fiduciary Services . cultural Cooperative. 21Agricultural Credit Corporations . 21Asset-Backed Securities . 22Auction-Rate Securities . 22Bank Service Companies. 23Bank’s Own Stock . 23Banker’s Acceptances . 23Banker’s Banks . 23Commercial Mortgage-Related Securities . 24Commercial Paper . 24Community Development/Public Welfare Investments . 25Convertible Securities . 27Corporate Debt Securities/Bonds . 27Deposit Accounts . 28iv
oreign Government Securities, Foreign Exchange, Bullion. 28Insurance Company Products; Investment Funds . 28Life Insurance (BOLI) . 29Money Market Preferred Stock . 29Mutual Fund Shares . 29Non-Controlling Minority Interests (including limited liability companies) . 30Private Investment Funds . 31Real Estate (FSA/NB Premises) . 31Real Estate (Other) . 32Residential Mortgage-Related Securities . 33Retention of Certain Equity Interests . 33Small Business Investments . 33Trust Preferred Securities . 34U.S., State and Local Government Securities. 34U.S. Government-Sponsored Corporations Securities . 35ELECTRONIC BANKINGA.Internet Banking1.2.Internet Banking. 36Internet Banks. 36B.Electronic Payments1.2.3.4.5.Automated Loan Machines and Remote Service Units . 36Electronic Bill Presentment and Payment . 37Electronic Collection System on Behalf of Public Authority. 37Electronic Data Interchange (“EDI”) Services . 37Stored Value Cards and Other Prepaid Media. 38v
C.Software Development and Production1.2.3.Bank Activities Software . 38Home Banking and Financial Management Software . 38Web Design Services. 38D.Electronic Commerce1.2.3.4.5.6.7.Data Processing . 39Digital Certificate Authority (“CA”) Services . 40Electronic Correspondent Services . 41Electronic Image Processing and Electronic Storage . 41Excess Electronic Capacity and By-Products . 42Internet Access Services . 42Leasing Computer and Telecommunications Equipment . 42VIII. OTHER CUSTOMER SERVICESA.Deposit and Currency-Related Services1.2.3.4.Buying/Selling Coins, Bullion, Foreign Exchange . 43Cashier’s Checks and Money Orders, Traveler’s Checks, Savings Bonds, Certified Checks . 44Check Cashing and Processing, Cash Management, Payment Processing . 44Safe Deposit Boxes . 44B.Lending and Real Estate-Related Services1.2.3.4.5.6.Appraisals . 44Banker’s Acceptances Issuance . 45Credit Card Loss Notification and Monitoring Services . 45Debt Cancellation Contracts (“DCCs”) and Debt Suspension Agreements (“DSAs”). 45Mortgage Document Custodian . 45Real Estate Brokerage . 45vi
7.8.Real Estate Tax Reporting and Management Services . 46Title Abstracting Services . 46C.Other Services1.2.3.4.5.6.7.8.9.10.11.Automobile Roadside Assistance Programs . 46Correspondent Services . 46Employee Benefit, Compensation Advisory, and Human Resource Services Consulting . 47Escrow Services . 47Financial Consulting . 47Medical Insurance Services . 48Messenger Services . 48Payroll Processing Services . 48Postal Services . 49Printing Services . 49Records Access (credit scores, credit reports, social security, medical andmotor vehicle records) . 49Rewards Programs . 49Tax Returns and Planning . 50Transaction Finders . 50Travel Booking Services for Customers . 50Welfare Counseling . 5012.13.14.15.16.IX.OFFICE LOCATIONS1.2.3.4.5.6.Branches (Home Office and Home State). 51Branches (Interstate) . 51Foreign Branches . 52Interaffiliate Banking Arrangements . 53Interstate Banking through Separate Financial Institution Subsidiaries . 53Nonbranch Facilities (including Agency Offices, ATMs, POS Terminals, and ALMs) . 54vii
X.ACTIVITIES CONDUCTED THROUGH AFFILIATES1.2.3.4.5.6.XII.Financial Subsidiaries . 55Foreign Subsidiaries and Operations . . 56Holding Companies . 57Offshore Operating Subsidiary or Service Corporation . 57Operating Subsidiaries. 58Service Corporations . 58MISCELLANEOUS1.2.3.4.5.6.7.8.9.Affinity Relationships. 60Borrowing and Other Liabilities . 60Charitable Contributions . 60Leasing of Employees. 61Leasing Lobby Space; Sharing Space and Personnel . 61Leasing of Personal Property. 61Political Contributions . 61Participation in Payment Systems . 61Offering Weight Loss Program to Employees . 61viii
SUMMARY OF THE POWERS OF NATIONAL BANKS ANDFEDERAL SAVINGS ASSOCIATIONSJuly 1, 2019POWERI.DEPOSITS1.Brokered Deposits2. Demand Deposits (checkingaccounts), Negotiable Orderof Withdrawal (NOW)Accounts, and Money MarketDeposit Accounts3.Public FundsFEDERAL SAVINGS ASSOCIATIONS (“FSAs”)NATIONAL BANKS ("NBs")Well capitalized FSAs may accept brokered deposits.Adequately capitalized institutions may accept brokereddeposits only if granted a waiver by the FDIC, subject tointerest rate restrictions. 12 U.S.C. 1831f; 12 CFR 337.6.Well capitalized NBs may accept brokered deposits.Adequately capitalized institutions may accept brokereddeposits only if granted a waiver by the FDIC, subject tointerest rate restrictions. 12 U.S.C. 1831f; 12 CFR 337.6.FSAs may offer interest and non-interest bearing demandaccounts to all customers. FSA also may offer interestbearing NOW accounts to individuals, non-profitorganizations, and government entities. FSAs must reservethe right to require at least 7 days prior notice of withdrawalfrom NOW accounts. FSAs may offer money market depositaccounts provided they reserve the right to require at least7 days prior notice of withdrawal or transfer and depositorsare authorized to make no more than 6 transfers per month.12 U.S.C. 1464(b) and 1832; 12 CFR part 157; 12CFR 161.16, 161.28, and 161.29.NBs may offer interest and non-interest bearing demandaccounts to all customers. NBs also may offer interestbearing NOW accounts to individuals, nonprofitorganizations, and government entities. 12U.S.C. 24(Seventh) and 1832; 12 CFR 204.130.FSAs may accept deposits of federal government funds andpublic money, serve as fiscal agents of the federalgovernment, and give security in connection with theseactivities. 12 U.S.C. 1464(k); 12 CFR 145.16 and 145.101.FSAs also may accept state and local government funds fordeposit and give security to the extent state law requiressecurity for such deposits. 12 U.S.C. 1464(b)(1)(A); 12CFR 145.16.NBs may accept deposits of public money and may beemployed as financial agents of the federal government.NBs may be required to provide security in connection withthese activities. NBs also may accept and provide security inconnection with the deposit of state or local governmentfunds, as provided by the law of the state in which the NB islocated, as well as of Indian tribal funds. 12 U.S.C. 90 and265; 25 U.S.C. 156 and 25 U.S.C. 162a.1
POWERFEDERAL SAVINGS ASSOCIATIONS (“FSAs”)NATIONAL BANKS ("NBs")4.Special Deposits (receipt ofmoney, financial instruments,or other property for safekeeping)FSAs may accept special deposits from customers. 12U.S.C. 1464(b).NBs may receive special deposits from customers. 12U.S.C. 24(Seventh); First Natl. Bank of Carlisle v.Graham, 100 U.S. 699 (1880), and Colorado Natl. Bank ofDenver v. Bedford, 310 U.S. 41 (1940).5.Time Deposits (CDs, savingsaccounts, and retirementaccounts)FSAs may offer and pay interest on time and savingsdeposits without significant restriction. 12 U.S.C. 1464(b);12 CFR 157.10; 157.14, and 161.9. FSAs may issuecertificates of deposit with interest rates tied to a stockmarket index. FHLBB Op. Gen. Couns. (Oct. 26, 1987).FSAs may act as trustee for certain retirement accountswithout obtaining trust powers. 12 U.S.C. 1464(l); 12 CFR150.580.NBs may offer and pay interest on time and savings depositswithout significant restrictions. 12 U.S.C. 24(Seventh). NBsmay purchase CDs or participations therein as agent forcustomers. OCC Interpretive Letter No. 385 (June 19, 1987).FSAs have statutory authority to give security, act assurety, and issue notes, bonds, debentures, otherobligations, or other securities to the extent authorized bythe OCC. 12 U.S.C. 1464(b)(2). FSAs have the authority topledge assets to secure the deposits of private depositors.See e.g. Mem. OTS Chief Counsel (January 29, 1991). See12 U.S.C. 1821(a)(2)(C) and 1464(n) (authority to give orpledge securities).National banks are prohibited from pledging assets to secureprivate deposits (see Texas & Pacific Railway Co. v. Portorff,291 U.S. 245 (1934)), unless otherwise permitted by law.See e.g. 12 U.S.C. 92a (trust funds).6.Pledging Assets to SecurePrivate Deposits2NBs may use CDs with interest rates tied to a stockmarket index. OCC Corporate Decision on the Request byChase Manhattan Bank, N.A. to Offer the Chase MarketIndex Investment Deposit Account (August 8, 1988).
POWERII.LENDING 1A.Commercial LoansFEDERAL SAVINGS ASSOCIATIONS (“FSAs”)NATIONAL BANKS ("NBs")1.Commercial Loans - InGeneral (secured orunsecured)FSAs may make commercial loans, subject to a limit of 20% NBs may make commercial loans without percent of assetsof total assets and provided that amounts in excess of 10% restrictions. 12 U.S.C. 24(Seventh).of assets are used only for small business loans. 12 U.S.C.1464(c)(2)(A); 12 CFR 160.30. Small business loansinclude any loan to a small business (defined in 13 CFRpart 121) or any loan that does not exceed 2 million and isfor commercial, corporate, business, or agriculturalpurposes. 12 CFR 160.3.2.Equity Kicker LoansFSAs generally may make equity kicker loans under thegeneral lending authorities, subject to safety andsoundness considerations. See 12 U.S.C. 1464(c).3.Financial Institution, Brokerand Dealer LoansFSAs may make these loans, provided such loans areNBs may make these loans. There is no aggregate limit. 12secured by assets in which FSAs may invest directly. There U.S.C. 24(Seventh).is no aggregate limit. The financial institution must be FDICinsured. The broker or dealer must be registered with theSEC. 12 U.S.C. 1464(c)(1)(L); 12 CFR 160.30.1NBs may accept a share of profit, stock warrants, or stockdividends in lieu of interest, subject to certain limitations.NBs also may finance the acquisition or improvement of realproperty on which the borrower will operate its business andreceive a percentage of the appreciation of the business’svalue as interest on the loan, subject to certain conditions.OCC Interpretive Letter No. 620 (July 15, 1992); 12 CFR7.1006. A NB may acquire an indirect interest in real estateto the extent that this furthers its financing activities. OCCInterpretive Letter No. 1048 (December 21, 2005). A NBmay accept a share of oil & gas production from a naturalresource deposit as repayment on a loan. OCC InterpretiveLetter No. 1117
COMPARISON OF THE POWERS OF NATIONAL BANKS AND . FEDERAL SAVINGS ASSOCIATIONS . July 1, 2019 . See also the companion document entitled "Key Differences Among National Bank, Federal Savings Association, and Covered Savings Association Requirements" on the OCC website.
