ABA: HOLA Flexibility Proposal Would Help Banks Meet Changing Needs of Customers

The American Bankers Association today called on the OCC to quickly finalize a proposal to implement a new section of the Home Owners’ Loan Act permitting certain federal thrifts to elect the rights and duties of national banks, as mandated by the regulatory reform law S. 2155. The proposal emerged from banker recommendations and has been strongly championed by ABA.

Under the proposal, federal savings associations with total consolidated assets of $20 billion or less would be eligible to take an election to become “covered associations.” Doing so would remove portfolio asset restrictions that have limited some banks’ ability to respond to changing community needs. It would also subject those institutions to the same duties, restrictions, penalties, liabilities, conditions, and limitations that apply to national banks without requiring a charter conversion.

In its comment letter to the OCC (which was also shared with the Federal Reserve Board as a regulator of savings and loan holding companies), ABA noted that this added flexibility will allow banks to meet the changing needs of their customers and communities. ABA called on regulators to follow congressional intent and provide maximum flexibility for affected banks without imposing undue impediments or hindrances, adding that “flexibility rather than formality is key.”


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