**Conditional Approval #410**

August 20, 2000 **September 2000**

Donal J. Hummer, Jr.

Vice President, General Counsel and Secretary

Eaglemark Bank, National Association

4126 Technology Way

Carson City, Nevada 89706

Re: Application by Eaglemark Bank, National Association, to reduce
permanent capital

Application Control Number: 2000-WE-12-0082

Dear Mr. Hummer:

The Office of the Comptroller of the Currency ("OCC") has determined to
approve your application for a permanent capital reduction as outlined
in your letter of April 6, 2000, subject to the condition set forth
herein. This decision is based on a thorough review of all information
available, including representations made in the application and by the
applicant's representatives.

Eaglemark Bank, National Association, Carson City, Nevada ("Eaglemark")
opened on August 25, 1997. Eaglemark's operations were limited to those
of a credit card bank so that it would meet the conditions of 12 U.S.C.
§ 1841(c)(2)(F) and thus would not be considered a "bank" for purposes
of the Bank Holding Company Act.[^1] Eaglemark is wholly-owned by
Eaglemark Financial Service Inc., a subsidiary of Harley Davidson, Inc.

Earlier this year, Harley Davidson decided to wind down Eaglemark's
credit card program. On March 21, 2000, Eaglemark sold in full its
credit card portfolio to U.S. Bank National Association ND, Fargo, North
Dakota, and entered into a five-year non-compete clause. The effect of
the sale and non-compete clause, combined with the charter's limitation
to credit card operations, is that Eaglemark can no longer conduct the
limited banking business it was approved to do. Therefore, Eaglemark has
discontinued banking operations as stipulated in its Articles of
Association.

We understand that Harley Davidson's future plans for Eaglemark include
the possibility of a sale to a third party or conversion to another type
of charter (*e.g.,* thrift or industrial loan bank). Further, we
understand that, if neither of these alternatives is successful, you
have indicated Eaglemark will enter into voluntary liquidation.

The national bank charter carries with it the benefits and
responsibilities of being a federally regulated institution. As the
regulator of the national banking system, the OCC's primary mission is
to ensure the safety and soundness of the system, including the
obligation to maintain adequate regulatory and supervisory control over
banks that are part of the system.

Therefore, when substantially all the business of a national bank has
been sold, the OCC strongly discourages proposals to sell the charter or
to hold the charter in a dormant state for an unspecified period of time
or for undetermined future operations, typically holding the charter
with a view to a sale in the future. The sale and/or holding of a
charter in a dormant state may encourage a misuse of the chartering
process.

In general, the OCC expects a bank to enter voluntary liquidation as
soon as its banking activities are discontinued.[^2] Accordingly,
approval for the capital reduction is hereby granted, subject to the
condition that the disbursement of capital by Eaglemark shall be made
pursuant to and in accordance with a plan of voluntary liquidation
adopted pursuant to 12 U.S.C. § 181. Please be advised that this
condition of approval is deemed to be a condition "imposed in writing by
the agency in connection with the granting of any application or other
request" within the meaning of 12 U.S.C. § 1818. This condition is
enforceable under 12 U.S.C. § 1818.

If you have any questions, please contact Licensing Expert Jan Kalmus or
Senior Licensing Analyst Maria Arevalo at 202-874-5060.

Sincerely,

**-signed-**

Julie L. Williams

First Senior Deputy Comptroller

and Chief Counsel

[^1]: To meet the requirements of 12 U.S.C. § 1841(c)(2)(F), an
    institution: (1) must engage only in credit card operations; (2)
    cannot accept demand deposit or deposits that the depositor may
    withdraw by check or similar means for payment to third parties; (3)
    may not accept any savings or time deposits of less that \$100,000,
    except if they are used as collateral for secured credit card loans;
    (4) may maintain only one office that accepts deposits; and (5) may
    not engage in the business of making commercial loans.

[^2]: The OCC's policy of encouraging voluntary liquidation in these
    circumstances is also consistent with congressional intent in 12
    U.S.C. § 288. Under section 288, if any national bank which has not
    gone into liquidation as provided in 12 U.S.C. § 181, and for which
    a receiver has not already been appointed for other lawful cause,
    shall discontinue its banking operations for a period of sixty days,
    the OCC may appoint a receiver for such bank.