# OCC Interpretive Letter No. 1135: Letter concludes that a federal savings association through its operating subsidiary may repurchase from customers auction rate securities pursuant to investment authority and auction rate preferred securities pursuant to general lending authority, consistent with OCC guidance and subject to statutory, regulatory, and safety and soundness limitation

> Federal · Agency guidance · In force

URL: https://www.frixlaw.com/law-library/statutes/OCC_INT1135

## Section

- **Citation:** OCC Interpretive Letter No. 1135
- **Heading:** Letter concludes that a federal savings association through its operating subsidiary may repurchase from customers auction rate securities pursuant to investment authority and auction rate preferred securities pursuant to general lending authority, consistent with OCC guidance and subject to statutory, regulatory, and safety and soundness limitation
- **Jurisdiction:** Federal
- **Kind:** Agency guidance
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** OCC Interpretive Letters / Letter concludes that a federal savings association through its operating subsidiary may repurchase from customers auction rate securities pursuant to investment authority and auction rate preferred securities pursuant to general lending authority, consistent with OCC guidance and subject to statutory, regulatory, and safety and soundness limitation.

## Text

O
Comptroller of the Currency
Administrator of National Banks
Washington, DC 20219
Interpretive Letter #1135
February 2012
January 20, 2012
[
]
[
]
[
]
[
]
[
]
Subject: Purchase of Auction Rate Securities
Dear [
]:
This is in response to your request to confirm the authority of [
] (“Bank”), a
federal savings association, to purchase and hold through a wholly owned operating subsidiary
shares of auction rate securities (“ARS”).1 The proposed acquisitions by [
]
(“OpSub”), the operating subsidiary, include: (1) municipal ARS, (2) student loan-
backed ARS, and (3) auction rate preferred securities (“ARPS”), as described below.2 For the
following reasons, and based on the representations and subject to the conditions set forth herein,
the OCC hereby confirms that the Bank through [OpSub] may purchase the ARS and ARPS
(collectively, “the ARS”) from current and former customers and hold them for up to 120 days
from the date of purchase.
1 An ARS typically is a debt instrument with a long-term nominal maturity for which the interest rate is regularly
reset through a Dutch auction.
2 The Bank represents that the ARPS primarily were issued by closed-end investment funds, are rated investment
grade and generally fall into four categories with respect to their underlying assets: (1) those backed exclusively by
municipal obligations; (2) those backed exclusively by corporate securities; (3) those backed by a mixture of
corporate securities and government obligations; and (4) those backed by a mixture of corporate securities,
municipal obligations, and mortgage-backed securities.
ent
grade and generally fall into four categories with respect to their underlying assets: (1) those backed exclusively by
municipal obligations; (2) those backed exclusively by corporate securities; (3) those backed by a mixture of
corporate securities and government obligations; and (4) those backed by a mixture of corporate securities,
municipal obligations, and mortgage-backed securities.

Background3
[OpSub], a registered broker-dealer, sold ARS to customers before the ARS market froze in
2008.4 Following the failure of the ARS market, federal and state regulators and the Financial
Institutions Regulatory Authority (“FINRA”) commenced a series of enforcement actions against
various types of market participants, including issuers, marketers, auction participants, and
“downstream sellers” of ARS to require financial institutions to provide liquidity to investors in
ARS.5 As part of a consent order with the Colorado Division of Securities6 and the North
American Securities Administrators Association (“NASAA”), [OpSub] would repurchase the
ARS from its current and former customers7 nationwide at par value.8
The Bank represents that it has reviewed the prospectuses for each of the ARS currently held by
a customer of [ OpSub ], and conducted a thorough review of the securities, cash, loans, and
other assets that serve as collateral for some of the ARS.9 The Bank represents that all of the
ARS are rated investment grade and that the issuer of each ARS has an adequate capacity to
meet the financial commitments under the security for the projected life of the investment.10 The
3 These facts are based upon the Bank’s representations
a thorough review of the securities, cash, loans, and
other assets that serve as collateral for some of the ARS.9 The Bank represents that all of the
ARS are rated investment grade and that the issuer of each ARS has an adequate capacity to
meet the financial commitments under the security for the projected life of the investment.10 The
3 These facts are based upon the Bank’s representations.
4 At the time of these sales [OpSub] was a subsidiary of [
] (“Corp”), the savings
and loan holding company parent of the Bank. However, in 2009 [Corp] reorganized by making Securities an
operating subsidiary of the Bank.
5 The Bank represents that Securities had a limited role in connection with the sale of ARS, and was not an issuer,
underwriter, dealer, or market-maker. Rather, [OpSub] processed ARS orders for a limited number of customers
through a platform made available by [
Company
].
6 [OpSub] is registered as a broker-dealer with the Colorado Division of Securities.
7 The Bank represents that if a former customer submits an ARS for purchase that is not already known to [OpSub],
[OpSub] would conduct a thorough review of each such ARS to ensure that it is eligible for purchase by [OpSub]
and consult with OCC if there was any issue with respect to permissibility.
8 Par value is currently higher than fair value. As an alternative to purchasing and holding the ARS, [OpSub] may
purchase the ARS from customers in a riskless principal transaction with a simultaneous sale to a third-party. A
federal savings association may engage in riskless principal transactions regardless of whether the securities are
eligible for the federal savings association to hold for its own account. See Memorandum to Office of District
Banks from FHLBB Deputy General Counsel (January 15, 1988)
purchase the ARS from customers in a riskless principal transaction with a simultaneous sale to a third-party. A
federal savings association may engage in riskless principal transactions regardless of whether the securities are
eligible for the federal savings association to hold for its own account. See Memorandum to Office of District
Banks from FHLBB Deputy General Counsel (January 15, 1988).
9 The Bank has included in its submission detailed representations about each ARS held by a current customer,
including principal amount outstanding, credit rating (if rated), maturity date (unless perpetual), and voting rights (if
any). For ARS backed by collateral, these representations include information concerning the initial ratio of
collateral to securities issued, the current ratio of collateral to securities issued, the percentage of portfolio assets that
are investment grade, and the ratio of thrift-permissible assets to securities issued.
10 Current regulations require that many types of securities have an investment grade rating. E.g., 12 C.F.R. §
160.40(a)(2)(ii) (corporate debt securities). As required by section 939A of the Dodd-Frank Wall Street Reform and
Consumer Protection Act, Pub. L. 111-203, Section 939A, 124 Stat. 1376, 1887 (July 21, 2010), the OCC has
proposed to replace references to credit ratings in its regulations with alternative standards of creditworthiness,
which would require that the issuer of each ARS has an adequate capacity to meet the financial commitments under
the security for the projected life of the investment. An issuer has an adequate capacity to meet financial
-2-
9A, 124 Stat. 1376, 1887 (July 21, 2010), the OCC has
proposed to replace references to credit ratings in its regulations with alternative standards of creditworthiness,
which would require that the issuer of each ARS has an adequate capacity to meet the financial commitments under
the security for the projected life of the investment. An issuer has an adequate capacity to meet financial
-2-

Bank requests confirmation that [OpSub] may hold the purchased ARS for a limited period of
time (up to 120 days) until they could be sold in an orderly manner at fair value. [
] (“Corp”), Bank’s holding company, has committed to purchase from [
OpSub
]
any of the ARS remaining unsold to third-party customers at the end of that period at a price
equal to the greater of the ARS’ fair value or the amount that [
OpSub
] paid the customer
to buy back the ARS.
Discussion
Municipal ARS
The Bank proposes to purchase a municipal ARS held by [OpSub] current customers that is a
general obligation of a state or municipality. A federal savings association has the authority to
purchase this type of municipal ARS for its own account when the obligation is guaranteed by
the full faith and credit of a state or political subdivision that has the power to tax.11
The Bank also seeks to purchase revenue bond municipal securities and a certificate of
participation ARS12 which all have investment grade ratings.13 These municipal ARS that
[OpSub] would purchase also are permissible, subject to a per-issuer limitation of ten percent of
total capital.14
Student Loan ARS
The Bank seeks to purchase a single investment-grade rated ARS issued by a trust and backed by
student loans, which currently is held by [ OpSub ] customers.15 A federal savings association
has authority to securitize and sell any loans that it is authorized to originate and p
purchase also are permissible, subject to a per-issuer limitation of ten percent of
total capital.14
Student Loan ARS
The Bank seeks to purchase a single investment-grade rated ARS issued by a trust and backed by
student loans, which currently is held by [ OpSub ] customers.15 A federal savings association
has authority to securitize and sell any loans that it is authorized to originate and purchase and
commitments if the probability of default by the obligor is low and the full and timely repayment of principal and
interest is expected. 76 Fed. Reg. 73,526,73,532-33 (Nov. 29, 2011); 76 Fed. Reg. 73,526 (Nov. 29, 2011). The
bank has represented that the purchase of ARS would meet the revised standard, as proposed.
11 12 U.S.C. § 1464(c)(1)(H); 12 C.F.R. § 160.42(a)(1) and (c).
12 The Bank represents that a certificate of participation is similar to a revenue bond. A municipality creates a bond
issue to fund construction of a capital project or facility. During construction of the facility, the municipality leases
the facility and makes lease payments instead of owning the facility outright. When the lease payment schedule is
completed, the municipality assumes ownership of the completed facility. Holders of the certificate of participation
are entitled to a return based on the lease payments made by the municipality.
13 The municipal ARS the Bank proposes to purchase are current in their regular interest and dividend payments.
The Bank has determined that the issuers of the ARS have an adequate capacity to meet financial commitments
under the security for the projected life of the asset or exposure. The Bank does not seek approval to purchase
municipal ARS that are not rated investment grade or are unrated.
14 12 U.S.C. § 1464(c)(1)(H); 12 C.F.R. § 160.42(a)(2).
15 This ARS also meets proposed creditworthiness standards. See 76 Fed. Reg. 73,526 (Nov. 29, 2011).
-3-
ave an adequate capacity to meet financial commitments
under the security for the projected life of the asset or exposure. The Bank does not seek approval to purchase
municipal ARS that are not rated investment grade or are unrated.
14 12 U.S.C. § 1464(c)(1)(H); 12 C.F.R. § 160.42(a)(2).
15 This ARS also meets proposed creditworthiness standards. See 76 Fed. Reg. 73,526 (Nov. 29, 2011).
-3-

may invest in such asset-backed securities.16 Accordingly, purchase of the student loan ARS is
permissible because the student loans that back this ARS are authorized investments for a federal
savings association.17
ARPS With Characteristics of Debt Obligations
The Bank proposes to purchase ARPS with characteristics commonly associated with debt
obligations using its lending authority. Certain substantive characteristics distinguish common
stock and debt securities. Common stock usually is perpetual with broad voting rights, while
debt securities generally have a limited life and few, if any, voting rights. Common stock
provides an ownership interest and appreciation in the market value of the issuer and dividends.
In contrast, debt securities offer investors periodic interest payments that may be fixed or
fluctuate as provided in the debt instrument, and a principal payment at maturity. With debt
securities, if the issuer should fail, the claims of the common stockholders are subordinate to the
debt holders. Rating agencies may assign credit ratings to debt securities, but typically do not
rate equity instruments.
Here the ARPS have the characteristics of debt obligations. In this instance, because the interest
rates are set in a Dutch auction, they are not within the control of [ OpSub ] or the Bank
issuer should fail, the claims of the common stockholders are subordinate to the
debt holders. Rating agencies may assign credit ratings to debt securities, but typically do not
rate equity instruments.
Here the ARPS have the characteristics of debt obligations. In this instance, because the interest
rates are set in a Dutch auction, they are not within the control of [ OpSub ] or the Bank.
Further, the Bank represents that [ OpSub ] will exercise no voting rights during the limited
period in which [OpSub] would hold the ARPS.18 Although the ARPS are perpetual, the Bank
represents that [ OpSub ] would hold the ARPS for no longer than 120 days, at which point
[Corp] would purchase any unsold ARPS. In addition, the ARPS are senior to common stock,
and dividends are cumulative. Rating agencies have assigned the ARPS investment grade
ratings.
The OCC previously has recognized that ARPS may possess many characteristics commonly
associated with debt obligations, and thus permitted national banks to purchase certain ARPS as
Type III investment securities.19 The OCC has opined that the National Bank Act and its
implementing regulations authorize national banks to purchase preferred securities under a
bank’s lending authority.20 Section 24(Seventh) of the National Bank Act expressly authorizes
national banks to conduct the business of banking, including “by discounting and negotiating
promissory notes, drafts, bills of exchange and other evidences of debt.”21 This authority has
16 Op. OTS Chief Counsel (September 14, 2004).
17 12 U.S.C. § 1464(c)(1)(U); 12 C.F.R. § 160.30.
18 A commitment to limit exercise of voting rights may be sufficient to qualify a security as a permissible debt
security. See. e.g., OCC Interpretive Letter No. 1126 (March 8, 2010); OCC Interpretive Letter No. 1115 (April 3,
2009).
19 See, e.g., OCC Interpretive Letter No. 1126 (March 8, 2010); OCC Interpretive Letter No. 1124 (November 3,
2009); OCC Interpretive Letter No. 1115 (April 3, 2009)
A commitment to limit exercise of voting rights may be sufficient to qualify a security as a permissible debt
security. See. e.g., OCC Interpretive Letter No. 1126 (March 8, 2010); OCC Interpretive Letter No. 1115 (April 3,
2009).
19 See, e.g., OCC Interpretive Letter No. 1126 (March 8, 2010); OCC Interpretive Letter No. 1124 (November 3,
2009); OCC Interpretive Letter No. 1115 (April 3, 2009).
20 See, e.g., OCC Interpretive Letter No. 1027 (May 3, 2005); OCC Interpretive Letter No. 941 (June 11, 2002).
21 12 U.S.C. § 24(Seventh).
-4-

long included the power to purchase and hold debt securities as loans, consistent with safety and
soundness considerations.22
While federal savings associations have been permitted to invest in trust preferred securities
(nominally equity securities that are in substance corporate debt securities), the OCC has not
previously addressed the authority of a federal savings association to purchase and hold an ARPS
using lending authority.23 The ARPS have the same characteristics whether purchased and held
by a national bank or a federal savings association. Thus, the same rationale supporting
purchase of certain ARPS as the equivalent of debt obligations for a national bank applies to
federal savings associations.24 The ARPS pay an interest rate not under control of the Bank; the
Bank has committed not to exercise any voting rights; and the ARPS rank senior to common
stock in the event of liquidation, and are cumulative. Although national banks and federal
savings associations have different charters and powers, both have lending powers
tions for a national bank applies to
federal savings associations.24 The ARPS pay an interest rate not under control of the Bank; the
Bank has committed not to exercise any voting rights; and the ARPS rank senior to common
stock in the event of liquidation, and are cumulative. Although national banks and federal
savings associations have different charters and powers, both have lending powers. Existing
OCC guidance recognizes federal savings associations may use lending authority to purchase
certain securities rated investment grade.25 Because the ARPS are the equivalent of debt
securities, the Bank may purchase them pursuant to lending authority.26
When national banks rely on lending authority to purchase debt securities, the OCC requires that
the bank conduct an independent analysis and complete review of relevant credit information and
determine that purchases meet the bank’s own internal loan underwriting standards and comply
with applicable lending standards.27 The bank must have continued access to appropriate credit
and portfolio performance data as long as the bank holds the securities. In addition, the bank
must maintain the analysis undertaken at the time that the bank acquired the ARPS and on an
ongoing basis as part of the bank’s fully documented loan files.28 The prudential concerns that
22 See, e.g., OCC Interpretive Letter No. 908 (April 23, 2001).
23 Federal savings associations have been permitted to make limited investments in trust preferred securities under
either authority to own corporate debt securities (12 C.F.R. § 160.40) or pass-through investment authority (12
C.F.R. § 160.32). See OTS Thrift Bulletin 73a (December 18, 2001), at 6.
24 Federal savings associations’ incidental authority provides another basis for finding federal savings associations
may purchase certain ARPS with characteristics of debt securities. See, e.g., OTS Op. Chief Counsel P-2006-1
(March 6, 2006); OTS Op. Chief Counsel P-2006-7 (November 28, 2006)
gh investment authority (12
C.F.R. § 160.32). See OTS Thrift Bulletin 73a (December 18, 2001), at 6.
24 Federal savings associations’ incidental authority provides another basis for finding federal savings associations
may purchase certain ARPS with characteristics of debt securities. See, e.g., OTS Op. Chief Counsel P-2006-1
(March 6, 2006); OTS Op. Chief Counsel P-2006-7 (November 28, 2006).
25 See Thrift Bulletin 73a, Investing in Complex Securities, at 7-8 (December 18, 2001)(advising savings
associations that lending authority is limited to securities that are investment grade due to prohibitions in 12 U.S.C.
§ 1831e(d)(1), which apply to savings associations, but not national banks).
26 A federal savings association may designate under which of several applicable lending or investment authorities,
the federal savings association is making the loan or investment, such as a purchase of securities with the
characteristics of debt. 12 C.F.R. § 160.31(a).
27 The bank must comply with the lending limit restrictions in 12 U.S.C. § 84 and generally may not purchase them.
in an amount exceeding 15 percent of the bank’s capital and surplus. OCC Interpretive Letter No. 930 (March 11,
2002),
28 See OCC Interpretive Letter No. 941 (June 11, 2002); OCC Banking Circular 181 (Rev.) (August 2, 1984).
-5-

underlie this policy are as relevant to the exercise of lending authority by a federal savings
association as to that of a national bank. Here the Bank has represented that purchases of ARPS
pursuant to its lending authority will comply with these standards. The Bank also represents that
it will comply with all applicable lending and investment limits.
Conclusion
The Bank through its operating subsidiary [OpSub] may repurchase from customers and former
customers up to an aggregate of $[
] million of ARS
t of a national bank. Here the Bank has represented that purchases of ARPS
pursuant to its lending authority will comply with these standards. The Bank also represents that
it will comply with all applicable lending and investment limits.
Conclusion
The Bank through its operating subsidiary [OpSub] may repurchase from customers and former
customers up to an aggregate of $[
] million of ARS. The Bank through [OpSub] may
acquire the ARPS under general lending authority if the acquisition is consistent with Banking
Circular 181(Rev.) and within the applicable limits of 12 U.S.C. § 1464(c) and 12 C.F.R. §
160.93 and safety and soundness limitations. The Bank through [OpSub] may purchase the
municipal ARS pursuant to its authority in 12 U.S.C. § 1464(c)(1)(H) and 12 C.F.R. §§ 160.40
(a)(1) & (2) & (c), and may purchase the student loan ARS pursuant to 12 U.S.C. §
1464(c)(1)(U) and 12 C.F.R. § 160.30.
The Bank’s acquisition of the ARS through [OpSub] is subject to the following enforceable
conditions:
1. If, for any reason, the Bank through [OpSub] has not sold or otherwise disposed of
the purchased ARS as described within 120 days after the date of purchase, the Bank
will sell the ARS to [Corp] for cash at a price equal to the greater of the ARS’ fair
value or the amount that [OpSub] paid the customer to buy back the ARS; and
2. If a customer were to tender for payment an ARS that is not eligible for the Bank
through [OpSub] to purchase and for which a buyer could not be found, the Bank
would have [Corp] purchase the ineligible ARS from [OpSub] on a same-day basis in
a riskless principal transaction.
These conditions of approval are conditions “imposed in writing by a Federal banking agency in
connection with any action on any application, notice or other request” within the meaning of,
and enforceable under, 12 U.S.C. § 1818
nd for which a buyer could not be found, the Bank
would have [Corp] purchase the ineligible ARS from [OpSub] on a same-day basis in
a riskless principal transaction.
These conditions of approval are conditions “imposed in writing by a Federal banking agency in
connection with any action on any application, notice or other request” within the meaning of,
and enforceable under, 12 U.S.C. § 1818.
Our conclusions herein specifically are based on the Bank’s representations and written
submissions describing the facts and circumstances of the subject transactions. Any change in
the facts or circumstances could result in different conclusions.
This approval and the activities and communications by OCC employees in connection with this
approval do not constitute a contract, express or implied, or any other obligation binding upon
the OCC, the United States, any agency or entity of the United States, or any officer or employee
of the United States, and do not affect the ability of the OCC to exercise its supervisory,
regulatory, and examination authorities under applicable law and regulations. The OCC may
modify, suspend, or rescind this approval if a material change in the information on which the
OCC relied occurs prior to the date of the transactions to which this decision pertains. The
foregoing may not be waived or modified by any employee or agent of the OCC or the United
States.
-6-

If you have any questions concerning this letter, please contact Martha Vestal Clarke, Counsel,
Securities and Corporate and Practices Division, at (202) 874-5210.
Sincerely,
]âÄ|x _A j|ÄÄ|tÅá
Julie L. Williams
First Senior Deputy Comptroller and Chief Counsel
-7-

## Nearby sections

- [OCC Interpretive Letter No. 719 Letter concludes that an ESOP is a "company' for purposes of 12 U.S.C. 371c and that an ESOP that controls at least 25% of a bank's voting stock is an "affiliate" under sec. 371c (supersedes existing OCC interpretive letter #261). (10/26/89)](https://www.frixlaw.com/law-library/statutes/OCC_INT0719.md)
- [OCC Interpretive Letter No. 720 Group of affiliate national banks may collectively own, through operating subsidiaries, minority interest in a merchant credit card processing subsidiary. (01/26/96)](https://www.frixlaw.com/law-library/statutes/OCC_INT0720.md)
- [OCC Interpretive Letter No. 722 A national bank may invest CIF assets in mutual funds, including mutual funds that pay the bank a servicing fee, without the bank having to reduce its trustee fees, if the bank concludes, based upon a reasoned opinion of trust counsel, that such an arrangement is authorized by applicable state law, is consistent with the trust instrument, is appropriate for the particular trust accounts, and is consistent with OCC regulations, including in particular 12 C.F.R. 9.18(b)(12). (03/12/96)](https://www.frixlaw.com/law-library/statutes/OCC_INT0722.md)
- [OCC Interpretive Letter No. 724 Bank can sell vehicle service contracts to customers who use home equity loan proceeds to purchase a vehicle, and the maturity of the service contract may be different from the maturity of the loan. (04/22/96)](https://www.frixlaw.com/law-library/statutes/OCC_INT0724.md)
- [OCC Interpretive Letter No. 725 National bank to establish an operating subsidiary to engage in permissible derivatives-related activities. (05/10/96)](https://www.frixlaw.com/law-library/statutes/OCC_INT0725.md)
- [OCC Interpretive Letter No. 726 Letter concerns the application of the Community Reinvestment Act (CRA) regulations to financial institutions' support of microenterprise lending programs. (06/21/96).](https://www.frixlaw.com/law-library/statutes/OCC_INT0726.md)
- [OCC Interpretive Letter No. 730 Letter concludes that loans proposed by the bank to an unaffiliated distributor of mutual funds would not be subject to interaffiliate lending restrictions contained in 12 U.S.C. 371C. (05/29/96).](https://www.frixlaw.com/law-library/statutes/OCC_INT0730.md)
- [OCC Interpretive Letter No. 732 National bank may make a 5.5% investment in software company which is engaged in the design, development, marketing and maintenance of a network for electronic funds transfers and electronic data interchange, including transacting electronic commerce and marketing software products for use on its world-wide electronic commerce network. (05/10/96).](https://www.frixlaw.com/law-library/statutes/OCC_INT0732.md)
- [OCC Interpretive Letter No. 733 National bank receiver is subject to the rights of secured creditors and creditors entitled to setoff. U.S. legal principles regarding enforcement of security interests are applicable to a receivership of a federal branch or agency conducted under National Bank Act. Therefore, receiver of an uninsured federal branch or agency does not have the right to interfere with the rights of secured creditors, including application of collateral held in U.S. to obligations of a non-U.S. office of the bank. (06/19/96).](https://www.frixlaw.com/law-library/statutes/OCC_INT0733.md)
- [OCC Interpretive Letter No. 736 Lending limit exception for participations not limited to banks. Non-banks may act as participants. (07/25/96)](https://www.frixlaw.com/law-library/statutes/OCC_INT0736.md)
- [OCC Interpretive Letter No. 737 Huntington National Bank's acquisition of minority interest in a limited liability company providing stored value systems. (08/19/96)](https://www.frixlaw.com/law-library/statutes/OCC_INT0737.md)
- [OCC Interpretive Letter No. 738 National bank's participation in a guaranty issued by an agent for a syndication of lenders with respect to their borrower's letter of credit reimbursement obligations to another bank or financial institution is permissible under I.R. 7.1016. (08/14/96)](https://www.frixlaw.com/law-library/statutes/OCC_INT0738.md)
- [OCC Interpretive Letter No. 740 Letter advises the Bank as follows: 1) The question of whether "salary" as used in 12 C.F.R. 2.4 includes an officer's base salary, bonuses, director's fees and/or any other compensation paid by the Bank must be determined by the Bank's management; 2) the question of whether the payment bonuses for credit life sales under 12 C.F.R. 2.4 is based on salary received by the recipient in a calendar year, a fiscal year, or any 12-month period must be determined by the Bank's management; and 3) pursuant to 12 C.F.R. 2.4, if the Bank's CEO is a loan officer and the CEO participates in the bonus plan under which payments based on credit life insurance sales are made, the CEO must be included in averaging the salaries of loan officers that participate in the Bank's bonus or incentive plan. (08/19/96)](https://www.frixlaw.com/law-library/statutes/OCC_INT0740.md)
- [OCC Interpretive Letter No. 741 National bank may acquire majority interest in company which operates call center facility which operates programs by which potential customers for new or used automobiles may access databases containing information on the used and new car inventories of numerous automobile dealerships in its metropolitan area. (08/19/96)](https://www.frixlaw.com/law-library/statutes/OCC_INT0741.md)

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/OCC_INT1135. Check the current official text before relying on it. Not legal advice.