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Of Mutual Interest

A compilation of Mutual, Thrift and Federal Savings Association news

Welcome to the inaugural issue of ICBA’s Of Mutual Interest. Of Mutual Interest is developed to help communicate with ICBA member mutual banks about important mutual banking issues and will cover news and information of interest to mutual banks. Issues will be published periodically, as news is developed and sent to you via email. Your feedback is always welcome.

OCC Guidance on Thrift Appeals

The Office of the Comptroller of the Currency is revising its rules to include federal savings associations in procedures for appealing agency decisions. The OCC announced in guidance that it is developing a uniform appeals process, as required by the Dodd-Frank Wall Street Reform Act.

The guidance replaces Banking Bulletin 2002-9 and repeals Office of Thrift Supervision (OTS) Thrift Bulletin 68b. By revising the appeals procedure a uniform appeals process will apply to federal savings associations, national banks, and federal branches and agencies.

The guidance outlines the process for contacting the OCC ombudsman, who functions outside the bank supervision area and reports directly to the Comptroller of the Currency. The Ombudsman may stay any appealable agency decision or action during its resolution, with prior consent of the Comptroller. The Ombudsman also may report weaknesses in OCC policy to the Comptroller, and may make recommendations regarding changes in OCC policy.

OCC encourages thrifts and national banks to contact the Ombudsman to discuss any agency policy, decision, or action that might develop into an appealable matter. The Ombudsman’s objective in these cases is to get an agreeable resolution to the dispute before it develops into a formal appeal and to give thrifts an opportunity to resolve issues efficiently and expeditiously. If disagreements cannot be resolved through informal discussions, OCC encourages thrifts to seek a further review of the OCC decisions or actions that are in dispute.

Click here for the appeals procedures in the OCC guidance.

Federal Reserve Board’s Rule on Dividend Waivers

The Federal Reserve has issued an Interim Final Rule regarding dividend waivers by mutual holding companies (MHCs) that are chartered under the Home Owners Loan Act or HOLA. This rule was mandated by Section 625 of the Dodd-Frank Wall Street Reform Act and is an attempt to resolve the potential conflicts that exist when dividends are waived and minority stockholders benefit from the waiver. The new rule does not apply to MHCs of state savings banks that are chartered under state law.

The new rule requires all federal MHCs to give notice to the Federal Reserve 30 days prior to the dividend payment date if the MHC intends to waive dividends. The notice must contain a resolution adopted by the MHC’s board that the waiver is consistent with the fiduciary obligations of the board to the members of the MHC. In addition, the notice must also state that a majority of the members of the MHC have approved the waiver after receiving appropriate disclosures. For federal MHCs that were not formed prior to December 1, 2009 or did not sell stock and waive dividends prior to that date (non-grandfathered MHCs), there are additional requirements including a requirement that either the non-stockholding directors approve the dividend waiver, or the MHC’s officers, directors and stock benefit plans waive the receipt of the dividend.

ICBA will be monitoring the Interim Final Rule to see if it has any impact on the formation of mutual holding companies or impairs the ability of mutuals to raise capital.

Click here for a copy of the final rule.

ICBA Meeting with OCC

ICBA staff met with Acting Comptroller of the Currency John Walsh to discuss a variety of regulatory issues facing the nation’s mutual, thrift and community banks. ICBA President and CEO Cam Fine, Senior Executive Vice President of Government Relations and Public Policy Karen Thomas, and Senior Vice President and Senior Regulatory Counsel Chris Cole held the meeting with Walsh. The meeting topics included the merger of the Office of Thrift Supervision into the OCC, new capital requirements for community banks and other important issues. Comptroller Walsh and Jennifer Kelly, Senior Deputy Comptroller for Midsize and Community Bank Supervision, said that the integration of OTS into OCC had proceeded smoothly and that approximately 670 new federal thrifts were now under the supervision of the OCC.

OCC Mutual Advisory Committee

The Office of the Comptroller of the Currency is establishing a Mutual Savings Association Advisory Committee (MSAAC) to provide perspectives to the agency on the unique challenges and needs of mutual savings associations.

The MSAAC, which will replace the advisory group established by the former Office of Thrift Supervision, will have 10 members serving two-year terms and will each meet at least twice per year. The MSAAC will help the OCC assess the state of mutual savings associations and advise the OCC on ways to help ensure their continued health and viability. ICBA is currently awaiting additional details regarding nominations .

If you are interested in serving on the advisory group, please contact Lilly Thomas at Lilly.Thomas@icba.org.

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