OCC Issues Long-Awaited Final Rule on HOLA Flexibility

The OCC has issued a long-awaited final rule implementing a new section of the Home Owners’ Loan Act permitting certain federal stock and mutual savings associations to elect the rights and duties of national banks. The provision—long advocated for by ABA—was included as part of last year’s S. 2155 regulatory form law.

Under the final rule—which takes effect July 1—federal savings associations with total consolidated assets of $20 billion or less as of Dec. 31, 2017, may at any time elect to become “covered associations.” Making this election will remove portfolio asset restrictions that have limited some banks’ ability to respond to changing needs in their communities. It will also subject those institutions to the same duties, restrictions, penalties, liabilities, conditions and limitations that apply to national banks without requiring a charter conversion.

ABA welcomed the final rule. “HOLA-chartered banks are an important part of the banking industry, and the added flexibility will allow these institutions to better meet the evolving needs of their customers and communities without having to change charters,” said ABA SVP Joe Pigg. “The final rule provides a clear and efficient process for banks seeking to take the election provided under the rule.”

Pigg added ABA’s view, however, that “the statute provides greater flexibility in some areas than the OCC included in the final rule.” The association will continue to work closely with the OCC to communicate its views on HOLA flexibility and seek additional avenues for HOLA-chartered banks to serve their communities.