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From Banking and Finance Law Daily, March 19, 2019

OCC proposes rule on partial refund of bank assessment fees

By Nicole D. Prysby, J.D.

The OCC has proposed a revision to its bank assessment fee rules, that would eliminate the requirement that banks prospectively pay for one half of each assessment period after they no longer are subject to the jurisdiction of the OCC.

The Office of the Comptroller of the Currency has released a proposal that would revise the OCC’s assessment rules to provide partial assessment refunds to national banks, federal savings associations, and federal branches and agencies of foreign banks that exit OCC jurisdiction by the midpoint of a semiannual assessment period. The proposed rule is intended to eliminate the requirement that banks prospectively pay for one half of each assessment period after they no longer are subject to the jurisdiction of the OCC, by setting the refund equal to the prospective portion of the assessment. The proposed rule is schedule to be published in the Federal Register on March 20, 2019, with comments due by April 19, 2019.

The OCC collects assessments from banks in accordance with 12 CFR Part 8. Under Part 8, the regulator collects assessments on a semiannual basis, with fees due by March 31 and September 30 of each year for the six-month period beginning on January 1 and July 1 before each payment date. Under 12 CFR 8.2(a)(5) and (b)(3), each bank subject to the jurisdiction of the OCC on the date of the second or fourth quarterly Call Report is subject to the full assessment for the next six-month period. Per this schedule, banks pay half of the semiannual assessment prospectively and half retrospectively. Only those institutions leaving OCC jurisdiction before the close of business on those dates avoid paying the semiannual assessment for the period beginning January 1 or July 1, as applicable.

Under the proposed rule, banks that leave OCC jurisdiction by the appropriate payment due date would receive a refund of assessments for the second three months of the semiannual assessment period. For example, a bank that was subject to the jurisdiction of the OCC as of December 31 would receive a refund of assessments for the second three months of the semiannual assessment period beginning January 1 if it leaves OCC jurisdiction by March 31. The proposed rule is intended to eliminate the requirement that banks prospectively pay for one half of each assessment period after they no longer are subject to the jurisdiction of the OCC, by setting the refund equal to the prospective portion of the assessment.

The OCC does not expect a significant economic impact from the rule. For example, had the proposed rule applied in 2018, the OCC would have refunded assessments totaling $579,000 to 22 banks, 19 of which were small banks (approximately 2 percent of OCC-supervised small entities).

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