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| ## Comptroller of the Currency                                        |
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| > Administrator of National Banks                                     |
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Western District Office

1225 17^th^ Street, Suite 300

Denver, Colorado 80202

720-475-7650; Fax: 301-333-7010

#### Conditional Approval #671

December 13, 2004 **January 2005**

William A. Stern, Spokesperson

Citizens Bank, National Association (Proposed)

Goodwin Proctor LLP

53 State Street, Exchange Place

Boston, MA 02109

Re: **Application to Establish a *De Novo* Charter**

Citizens Bank, National Association - Proposed, Albany, New York

> OCC Control No.: 2004-WE-01-0018
>
> **Related Applications:**
>
> Business Combination: 2004-WE-02-0042
>
> Dividend-in-Kind: 2004-WE-12-0359
>
> Reduction in Capital: 2004-WE-12-360
>
> Residency Waiver: 2004-WE-12-361
>
> Fiduciary Powers: 2004-WE-12-0369
>
> Material Noncash Contribution: 2004-WE-12-0377

Dear Mr. Stern:

The Office of the Comptroller of the Currency (OCC) has reviewed your
application to establish a new national bank with the title of Citizens
Bank, National Association (proposed Bank). On December 10, 2004, the
OCC granted preliminary conditional approval of your charter application
after a determination that your proposal met certain regulatory and
policy requirements. Your request for trust powers is also approved.

This preliminary conditional approval is granted based on a thorough
evaluation of all information available to the OCC, including the
representations and commitments made in the application and by the
Bank's representatives. We also made our decision to grant preliminary
conditional approval with the understanding that the proposed Bank will
apply for Federal Reserve membership and will obtain deposit insurance
from the Federal Deposit Insurance Corporation (FDIC).

The OCC has granted preliminary conditional approval only. Final
approval and authorization for the Bank to open will not be granted
until all preopening requirements are met. Until final approval is
granted, the OCC has the right to alter, suspend, or revoke this
preliminary conditional approval should the OCC deem any interim
development to warrant such action.

This preliminary conditional approval is subject to the following
condition:

1)  The Bank: (i) shall give James W. McPherson, Deputy Comptroller, 250
    E Street SW, Mail Stop 6-1, Washington, DC 20219-0001 and a copy to
    Examiner-in-Charge Carolyn G. DuChene, c/o Legal Department, Mail
    Code SU530, 1215 Superior Avenue, Cleveland, Ohio 44114 at least
    sixty (60) days prior written notice of the Bank's intent to
    significantly deviate or change from its business plan or operations
    and (ii) shall obtain the OCC's written determination of no
    objection before the Bank engages in any significant deviation or
    change from its business plan or operations. The OCC may impose
    additional conditions it deems appropriate in a written
    determination of no objection to a bank's notice. For the first
    three years of operation, the Bank also must provide a copy of such
    written notice to the FDIC's New York Regional Office, 20 Exchange
    Place, New York, NY 10005.

Final approval will not be granted until and unless the Federal Reserve
acts favorably on your application to acquire the Bank. You must furnish
the OCC with a copy of all related filings to the Federal Reserve,
including registration material. Also send this information to Senior
Licensing Analyst Geryl N. Race in our Western District Office.

The OCC poses no objection to the following person(s) serving as
executive officer(s), directors, and/or organizers as proposed in the
application:

[Name]{.underline} [Title]{.underline}

Richard M. Kulbeida President and Chairman of the Board

James R. Keyes Director and Regional President -- Vermont

James B. Fitzgerald Director

Stephen D. Steinour Director

Robert M. Mahoney Director

David E. Mietlicki Chief Financial Officer

Robert T. Gormley Interim Chief Credit Officer

Brad B. Kopp Vice President, Trust Operations

Prior to the Bank's opening, the Bank must obtain the OCC's prior
written determination of no objection for any additional organizers or
executive officers, or directors appointed or elected before the person
assumes the position. For a two-year period after the Bank commences
business, the Bank must file an Interagency Biographical and Financial
Report with the OCC and receive a letter of no objection from the OCC
prior to any new executive officer or director assuming such position.

The OCC also granted your request to waive the residency requirements of
12 USC 72 for all of the members of the board of directors of the Bank.
This waiver is granted based upon a review of all available information,
including the filing and any subsequent correspondence and telephone
conversations, and the Bank's representation that this waiver will not
affect the board's responsibility to direct the Bank's operations in a
safe, sound, and legal manner. The OCC reserves the right to withdraw or
modify this waiver and, at its discretion, to request additional
information at any time in the future.

The "Charters" booklet in the *Comptroller's Licensing Manual* provides
guidance for organizing your bank. The booklet is located at the OCC\'s
web site:
<http://www.occ.treas.gov/corpbook/group4/public/pdf/charters.pdf>. The
booklet contains all of the steps you must take to receive your charter.

As detailed in the booklet, you may establish the corporate existence of
and begin organizing the Bank as soon as you adopt and forward Articles
of Association and the Organization Certificate to Senior Licensing
Analyst Geryl N. Race in this office for our review and acceptance. As a
"body corporate" or legal entity, you may begin taking those steps
necessary for obtaining final approval. The Bank may not begin the
business of banking until it fulfills all requirements for a bank in
organization and the OCC grants final approval.

The OCC will not permit Citizens Bank, National Association to open
until it receives from the Federal Reserve Bank its determination and
waiver that Charter One Bank, National Association is not a bank holding
company during various phases of this multi-step transaction.

Enclosed are standard requirements and minimum policies and procedures
for new national banks. The Bank must meet the standard requirements
before it is allowed to commence business and the Board of Directors
must ensure that the applicable policies and procedures are established
and adopted before the Bank begins operation.

1.  The Bank must submit to the Examiner-in-Charge Carolyn G. DuChene,
    c/o Legal Department, Mail Code SU530, 1215 Superior Avenue,
    Cleveland, Ohio 44114 for review, and prior written determination of
    no supervisory objection, a complete description of the Bank's final
    information systems and operations architecture as well as the
    information systems risk assessment and management plan. This should
    include a schematic drawing and discussion of the following items:

Vendor due diligence and contracts; electronic banking security
mechanisms and policies; information systems personnel; internal
controls; audit plans; and operating policies and procedures, including,
but not limited to, vendor management, web linking, customer
authentication and verification, and business resumption contingency
plans.

2.  The Bank must have performed an independent security review and test
    of its electronic banking platform. The Bank must have this review
    performed regardless of whether the platform is operated in-house or
    by one or more third-party service providers. If the Bank outsources
    the technology platform, it can rely on testing performed for the
    service provider to the extent that it satisfies the scope and
    requirements listed herein. The review must be conducted by an
    objective, qualified independent source (Reviewer). The scope should
    cover:

-   All access points, including the Internet, Intranet, or remote
    access.

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-   The adequacy of physical and logical protection against unauthorized
    access including individual penetration attempts, computer viruses,
    denial of service, and other forms of electronic access.

> By written report, the Reviewer must confirm that the security
> measures, including the firewall, have been satisfactorily implemented
> and tested. For additional guidance, refer to \"The Internet and the
> National Bank Charter\" booklet of the *Comptroller\'s Licensing
> Manual*, pages 37-38, Information System Security. The booklet is
> located at the Electronic Banking section of the OCC\'s Web site:
> <http://www.occ.treas.gov/corpbook/group4/public/pdf/internetnbc.pdf>.

3.  The Bank must have a security program in place that complies with
    the "Interagency Guidelines Establishing Standards for Safeguarding
    Customer Information" specified at 12 CFR 30, Appendix B.

Under separate cover, the OCC will send to you an appropriate set of OCC
handbooks, manuals, issuances, and selected other publications. This
information does not include the Comptroller's Licensing Manual, which
is available only in electronic form at our web site:
<http://www.occ.treas.gov/corpapps/corpapplic.htm>. Please indicate the
mailing address that you would like these publications and all future
correspondence sent if it is different from the Spokesperson's address
above. Once the bank is opened all correspondence will be sent to the
approved address unless the OCC is directed otherwise.

On December 10, 2004 the Comptroller of the Currency approved your
proposal to purchase the assets and assume the liabilities of Charter
One Bank, National Association by Citizens Bank, National Association.

The business combination of Citizens Bank, National Association and
Charter One Bank, National Association is legally authorized as an
interstate purchase and assumption transaction under the Riegle-Neal
Act, 12 USC 215a-1 and 1831u(a), and the resulting bank is authorized to
retain and operate the branches acquired under 12 USC 36(d) and
1831u(d)(1) as branches of Citizens Bank, National Association.

The district office must be advised in writing in advance of the desired
effective date for the purchase and assumption, so it may issue the
necessary certification letter. The effective date must follow the
applicable Department of Justice's injunction period and any other
required regulatory approval.

The OCC will issue a letter certifying consummation of the transaction
when we receive:

-   A Secretary's Certificate for each institution, certifying that a
    majority of the board of directors approved the purchase and
    assumption.

-   An executed purchase and assumption agreement.

-   A Secretary's Certificate from each institution, certifying that the
    shareholder approvals have been obtained, if required.

If the purchase and assumption is not consummated within one year from
the approval date, the approval shall automatically terminate, unless
the OCC grants an extension of the time period.

The Comptroller of the Currency has approved Charter One Bank, National
Association's Material Noncash Capital Contribution and Reduction in
Capital in the amount of approximately \$2.5 billion as outlined in your
letter of October 14, 2004. In addition, the OCC approves Charter One
Bank, National Association's Dividend in Kind of 100% of its ownership
in Citizens Bank, National Association to Citizens Financial Group, Inc.

The change in capital should be completed within one year of the date of
this letter.

The approvals contained in this letter are subject to the following
condition:

The approvals contained in this letter represent a multiple step
transaction represented in a letter dated October 14, 2004. The failure
on the part of Citizens Financial Group, Inc., Charter One Bank,
National Association, and Citizens Bank, National Association to
complete all the transactions may void all the above approvals at the
discretion of the OCC.

The conditions of approval are conditions "imposed in writing by the
agency in connection with the granting of any application or other
request" within the meaning of 12 USC 1818. As such, the conditions are
enforceable under 12 USC 1818.

The OCC has reviewed your request contained in your *de novo* charter
application, for an exception from the prohibition on the purchase of
low-quality assets from affiliates contained in 12 U.S.C. 371c(a)(3) and
Regulation W, 12 C.F.R. 223.15(a). Citizens Bank, National Association
proposes to purchase the assets and assume the liabilities of the
affiliated Charter One Bank, National Association, that are located in
the states of New York and Vermont, which contains low-quality assets as
defined in 12 C.F.R. 223.3(v).

The OCC hereby approves the Citizens Bank, National Association's
purchase of the above accounts. Accordingly, the Bank qualifies for the
exemption in 12 C.F.R. 223.42(i) and its purchase of the Charter One
Bank, National Association's accounts will not violate the low-quality
asset prohibition.

In connection with the Citizens Bank, National Association's purchase of
assets and assumption of deposit liabilities from Charter One Bank,
National Association, Savings Association Insurance Fund insured
deposits will transfer to the Bank Insurance Fund which insures Citizens
Bank, National Association. Citizens Financial Group, has requested the
OCC's approval to exercise the conversion transaction option available
in 12 U.S.C. 1815(d)(3). Citizens Financial Group maintains that they
meet the requirements of 12 U.S.C. 1842(d)(3) to exercise the option,
which we have confirmed, and therefore grant approval.

These approvals are granted based on a through review of all information
available, including the representations and commitments made in the
applications and by the bank's representatives.

This approval and the activities and communications by OCC employees in
connection with the filing do not constitute a contract, express or
implied, or any other obligation binding upon the OCC, the United States
(U.S.), any agency or entity of the United States, or any officer or
employee of the U. S., and do not affect the ability of the OCC to
exercise its supervisory, regulatory and examination authorities under
applicable law and regulations. The foregoing may not be waived or
modified by any employee or agent of the OCC or the U. S.

You should include the CAIS control number on any correspondence related
to this filing. If you have questions, contact Senior Licensing Analyst
Geryl N. Race at (720) 475-7655.

Sincerely,

/s/ David J. Rogers

David J. Rogers

Licensing Manager

Enclosures: Standard Requirements

Minimum Policies and Procedures