OCC proposes rule setting permissibility standards for real estate used as bank, FSA premises

Standards for determining the permissibility of a bank or federal savings association (FSA) acquiring and holding real estate used as its premises (FSA), and leasing excess space or capacity, would be defined and incorporated in agency rules under a proposal issued Monday by the Office of the Comptroller of the Currency (OCC).

The proposed rule would, for the first time, define and implement an occupancy test and excess capacity standards. Bank-occupied premises, the OCC said, would be defined as real estate “acquired and held in good faith” in which more than 50% of each building or severable piece of land is used by bank persons, including facilities that may be operated by third parties to provide amenities and services to bank persons or otherwise facilitate bank business operations. The proposed rule also notes that a bank or FSA may, in order to optimize the use of bank-occupied premises or avoid economic loss or waste, permit third parties to use excess space or capacity in real estate legitimately acquired or developed by the national bank or FSA for its banking business.

The OCC is seeking input on a wide range of issues, including the agency’s proposal to combine the rules for banks’ and thrifts’ premises into one rule; types of excess capacity (“temporal” or space-based); acquisition of real estate to accommodate future expansion or bank needs; and more.

The agency said its proposed rule would also consolidate the OCC’s rules on sharing national bank or FSA space and employees with the rule covering ownership of property. “The agency proposes to continue to cover the national bank and Federal savings association charters under the same regulation, but, because different statutory regimes cover each charter, the OCC seeks comment on whether to apply different requirements to national banks and Federal savings associations,” the agency said in its notice.

Comments will be due 45 days after the proposal is published in the Federal Register.

OCC Proposes Rule Regarding Permissible Bank Premises