ABA Comments to OCC on Licensing Amendments

Chief Counsel’s Office
Office of the Comptroller of the Currency
400 7th Street SW, Suite 3E-218
Washington, DC 20219

Ladies and Gentlemen:

The American Bankers Association (ABA) appreciates this opportunity to comment on the Office of the Comptroller of the Currency’s (OCC) proposed amendments to 12 CFR Part 5, regulations governing the corporate activities and transactions of national banks and federal savings associations. The proposal makes a number of changes to “update and clarify the policies and procedures, eliminate unnecessary requirements consistent with safety and soundness, and make other technical and conforming changes.”

On behalf of our members, we take this opportunity to urge the OCC to amend Part 5’s certification requirements under proposed § 5.4(g) to clarify the applicable legal standard to which criminal penalties may apply. Under proposed § 5.4(g), “a filer must certify [to the OCC] that any filing or supporting material submitted to the OCC contains no material misrepresentations or omissions” and “[a]ny person responsible for any material misrepresentation or omission in a filing or supporting materials may be subject to enforcement
action and other penalties, including criminal penalties provided in 18 U.S.C. 1001.”

§ 5.26(e)(6) provides an example of a “filing” subject to § 5.4(g). This section states that a bank “shall provide written notice to the OCC no later than 10 days after it begins to engage in any of the activities specified in § 9.7(d) of this chapter in a state in addition to the state described in the application for fiduciary powers that the OCC has approved.” When a bank files the “Fiduciary Powers Application” appended to the “Fiduciary Powers - After the Fact Notice,” the individual signing the notice certifies that “the information contained in this notice has been examined carefully and is true, correct, complete and current as of the date of this submission.” The form’s certification further states that “any attachments to it, and any other documents or information provided in connection with this notice may be grounds for the OCC to require cessation of the proposed activity, and may subject the undersigned to legal sanctions, including the criminal sanctions provided for in Title 18 of the United States Code.”8 Beneath this certification, the authorized filer must provide his or her signature, typed name, title, and employer.

Under 18 U.S.C. 1001(a), anyone who “knowingly and willfully” makes a materially false, fictitious or fraudulent statement in any matter within the jurisdiction of the executive branch of the Government of the United States may be fined, imprisoned for up to 5 years, or both. However, because proposed § 5.4(g) makes no mention of a legal standard for culpability, it is unclear whether a filer would be subject to criminal penalty even if such material misrepresentation or omission were not made knowingly and willfully. Therefore, in order to provide clarity to all filers signing a covered certification, we respectfully urge the OCC to amend proposed § 5.4(g) to qualify that filers who “knowingly and willfully” make material misrepresentations or omissions in a filing may be subject to enforcement and criminal penalty under 18 U.S.C. 1001. In addition, we respectfully urge the OCC to update all the OCC’s standard forms that contain a certification to incorporate the “knowingly and willfully” legal standard for when enforcement and criminal penalty may apply and to clarify to which sanctions under Title 18 of the United States Code an individual or entity would be subject.

Conclusion

ABA appreciates this opportunity to comment on the proposal and urges the OCC to incorporate the “knowingly and willfully” legal standard for material misrepresentations and omissions into proposed § 5.4(g) and form certifications. If you have any questions about the points raised in this letter, please do not hesitate to contact the undersigned.

Sincerely,

Phoebe A. Papageorgiou
Vice President, Trust Policy