# O **NEWS RELEASE**

+-------------------------------------+--------------------------------+
| ## Comptroller of the Currency      | ##### NR 2001-60               |
|                                     |                                |
| Administrator of National Banks     |                                |
+-------------------------------------+--------------------------------+

FOR IMMEDIATE RELEASE Contact: Robert M. Garsson

July 2, 2001 (202) 874-5770

**OCC Issues Proposed Rule on Electronic Banking**

WASHINGTON \-- The Office of the Comptroller of the Currency (OCC)
published a proposed rule in today's *Federal Register* that would
remove unnecessary impediments to the use of technology by national
banks and provide simpler and clearer guidance for electronic and
developing technologies activities. The proposed rule would also codify
positions that the OCC has taken previously in interpretive letters to
national banks.

"We want to make it easier for national banks to take advantage of
electronic banking opportunities," said Julie Williams, First Senior
Deputy Comptroller and Chief Counsel. "We support a regulatory
environment that recognizes the profound effect of technology on the
design and delivery of financial products and services."

The proposed rule would establish a new section in part 7 of OCC
regulations addressing the authority of national banks to conduct
activities by electronic means. For example, the new section includes
provisions codifying a national bank's authority to act as a digital
certification authority, to engage in data processing activities and to
market and sell excess electronic capacity. The proposal also updates
the OCC's rule authorizing national banks to act as finders. National
banks have used this authority as an important basis for conducting
business over the Internet. Finally, the proposal offers guidance to
national banks seeking to conduct new activities electronically by
describing the factors the OCC uses to determine if an electronic
activity is part of, or incidental to, the business of banking.

The proposal requests comments in several developing areas of electronic
banking. Comment is requested on the ability of a national bank to issue
a digital certificate that verifies that the holder has particular
authority or financial capacity. In particular, the OCC is interested in
comments on the risks posed by this activity and the extent that banks
propose to engage in it.

Comment is also requested on whether the OCC should permit national
banks to provide limited amounts of nonfinancial information processing
for customers in conjunction with financial data processing. National
bank customers sometimes request this service so that they can avoid
using two sources for data processing. The OCC is considering a rule
that would allow national banks to derive a certain percentage of data
processing revenue from processing nonfinancial data. This approach
would be similar to the approach adopted by the Federal Reserve Board
for bank holding companies.

\- more -

The proposed rule clarifies that a national bank will not be considered
"located in" a state simply because it maintains a technology-based
facility, such as an automated loan center or a network server, in that
state or because customers in that state electronically access a bank's
products and services. This approach is consistent with the trend
reflected in recent judicial rulings.

Comments on today's proposed rule are due on August 31.

  -----------------------------------------------------------------------
  \# \# \#

  The OCC charters, regulates and examines approximately 2,200 national
  banks and 56 federal branches of foreign banks in the U.S., accounting
  for more than 55 percent of the nation's banking assets. Its mission is
  to ensure a safe and sound and competitive national banking system that
  supports the citizens, communities and economy of the United States.
  -----------------------------------------------------------------------