# O

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| ## Comptroller of the Currency                                        |
|                                                                       |
| > Administrator of National Banks                                     |
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Washington, DC 20219

October 15, 2003 **Interpretive Letter #976**

**December 2003**

**12 USC 24(7)**

**12 CFR 4**

Re: Request for Opinion

Dear **\[ \]**:

I am writing in response to your request, dated September 10, 2003, for
a legal opinion addressing the contractual relationship between **\[
*Bank, City and State* \]** ("Bank") and your clients, **\[ \]**, a **\[
*State* \]** corporation ("**\[ \]**"), and **\[ \]**'s principals
("Principals"). Your request comes as the parties attempt to resolve a
dispute concerning the profits earned by **\[ \]** and disbursed,
pursuant to an agreement between the parties, to the Bank. We understand
that for the last year, the Bank and **\[ \]** have been pursuing
voluntary mediation to resolve the dispute. Such mediation efforts are
still on-going. At the same time, the parties have been preparing for
binding arbitration, as required by the Agreement. We understand that
the parties have agreed upon a three arbitrator panel to hear the
dispute, likely sometime in January 2004.

We addressed the permissibility of the Bank's activities in Interpretive
Letter No. 956 ("IL 956").[^1] In IL 956, we concluded that the Bank's
lending arrangement with **\[ \]** constituted a permissible shared
appreciation mortgage pursuant to 12 C.F.R. § 7.1006; that the lenders'
covenants imposed by the Bank constituted permissible prudential
measures designed to protect the Bank's interests; and that the nature
and amount of the Bank's compensation to **\[ \]** are consistent with
OCC precedent.

Your letter requests that we now consider the information you have
submitted and employ **\[ \]**'s characterization of the facts
underlying IL 956 to reconsider and to opine anew on the nature of the
relationship between the Bank and **\[ \]**. The information you have
presented does not differ fundamentally in key respects from the
information on which our previous opinion was based, thus we decline to
reconsider our previous opinion. That opinion relied on facts
represented to us by the Bank. In contractual disputes between a
national bank and a third party, the OCC typically does not assume the
role of fact finder. Instead, this role would best be taken on by a
decision-making body -- a mediator, an arbitration panel, or a court --
with expertise in weighing different factual characterizations.

There are two additional matters that I should note. In an earlier
telephone conversation with the OCC you raised the possibility of
seeking depositions from various OCC employees. The OCC will not permit
the deposition of any current OCC employees in this matter. As the facts
are essentially undisputed, testimony from any OCC employee would be in
the form of an expert opinion. The OCC does not provide expert opinions
for private parties except in rare cases under circumstances not present
here.

Second, as to former OCC employees, the OCC must grant permission to
former OCC employees before they may disclose information obtained in
the course of their OCC employment. Your letter cites three former OCC
employees as experts. Given the geographic scope of their OCC service,
there may be an issue as to whether these individuals furnished fact
information resulting from their OCC employment. In this regard, all
requests for OCC information from past and present OCC employees must
comply with 12 C.F.R. Part 4.

Sincerely,

/s/ Julie L. Williams

Julie L. Williams

First Senior Deputy Comptroller

And Chief Counsel

[^1]: *Reprinted in* \[Current Transfer Binder\] Fed. Banking L. Rep.
    (CCH) ¶ 81-481 (Jan. 31, 2003).