A Guide to Tribal Ownership 

of a National Bank

 Washington, DC 

 September 2002
This guide, prepared by the Office of the Comptroller of the Currency (OCC), 

is intended to provide an introduction to tribal ownership of national banks. 

The OCC encourages tribes and national banks to consult with counsel 

familiar with banking law, federal Indian law, and tribal law, as appropriate, 

to obtain specific advice on chartering, acquiring, or operating a national 

bank.

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank ii 
A Guide to Tribal Ownership 

of a National Bank Table of Contents

Background 1

Preliminary Considerations 1 

Types of Charters 1 

Financial Institutions 1 

National Banks 2 

Indian Tribes Owning Financial Institutions 2 

Tribal Sovereignty 2 

Legal and Practical Considerations 3 

Getting Started 4 

Entry into the National Banking System 7

New National Bank Charter 7 

Decision Criteria 7 

Organizing Group 8 

Importance of the CEO 8 

Capital Considerations 9 

Community Development Banks 10 

Acquisition by Merger 11 

Use of an Interim Bank 11 

Bank Merger Act Processing 12 

Acquiring the Stock of an Existing Bank 12 

Decision Criteria 13 

Tribes Acquiring Bank Stock 13 

Use of a Voting Trust or Agreement 14 

Use of a Bank Holding Company 14 

Conversion 15

Application Process 17

Prefiling Discussions and Meetings 17 

Filing the Application 18 

Filing Fees 18 

Fee Waivers 18 

New Charters in Low- or Moderate-Income Areas 19 

Background Investigations 19 

Decisions 19

Time Considerations 20 

Supervision and Oversight 21

Supervision of National Banks 21 

Board of Directors’ Oversight 21 

Enforcement Actions 22 

Sovereign Immunity 23 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

iii of a National Bank
Operations 25 

Permissible Banking Activities 25 

Bank Powers 25 

Community Development Opportunities 26 

Fiduciary Activities 28 

Safety and Soundness Protections 29 

Affiliate Transactions 29 

Loans to “Insiders” 31 

Gaming 31 

Sources of Capital and Deposits 32 

Capital from Financial Institutions 32 

CDFI Fund 32 

Tribal Funds as Deposits 34 

Minority Banks 34 

Branching 36

Federal Law 36 

Mobile Branches 37 

Alternatives to Branching 37 

Compliance Issues 38 

Fair Lending Statutes 39 

Community Reinvestment Act 39 

Securities Laws 41 

Bank Secrecy Act and Anti-Money Laundering Provisions 42 

Appendixes 45 

A Financial Institution Charters and Regulators 45 

B Sample Commitment Letter 49 

C Explanatory Information about Commitments 55 

D Memorandum to Prospective Community Development 57 

 Bank Organizing Groups 

E Policy Statement on Minority-Owned National Banks 67 

F OCC Contacts 71 

G OCC Publications 77 

H Resource Contacts 81 

Glossary 87

References 91

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank iv 
A Guide to Tribal Ownership 

of a National Bank Background

This guide is intended to assist federally recognized Indian tribes in exploring 

entry into the national banking system by establishing or acquiring control of 

a national bank. Specifically, it: 

• Provides background information to consider when entering banking. 

• Outlines the Office of the Comptroller of the Currency’s (OCC’s) 

corporate application process. 

• Summarizes supervision and oversight of national banks. 

• Addresses operational issues relevant to tribally owned banks. 

• Includes a glossary and a reference section, listing additional OCC 

publications and other resources. 

Preliminary Considerations

Before a tribal government decides to invest in a financial institution, it 

should consider whether a financial institution is the best organizational 

structure to achieve its objectives. To reach this decision, a tribe may want to 

consult with legal, financial, and business advisors. Alternatives to owning a 

financial institution could include creating a nonbank entity (e.g., a finance 

company or loan fund), a community development corporation (CDC), a 

small business investment company, or partnerships with existing financial 

institutions. Some of these structures may be used in conjunction with the 

establishment or acquisition of a tribally owned financial institution. 

Types of Charters

Financial Institutions

A tribal government interested in starting its own financial institution must 

first determine the type of charter that best suits its objectives. The most 

common charters are: national or state bank, federal or state savings 

association, federal or state savings bank, and federal or state credit union. 

Each charter offers different benefits. Appendix A lists the regulatory agency 

that has licensing and primary regulatory authority for each charter. 

The banking industry is regulated closely because financial institutions are 

important to the economy and enjoy government-sponsored benefits, 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

1 of a National Bank
particularly federal deposit insurance. Banking laws govern the activities in 

which institutions may engage, and bank regulators monitor those activities 

closely to ensure that institutions conduct them in a safe and sound manner 

and without undue risk to the Federal Deposit Insurance Fund. Each potential 

entrant into banking must work closely with appropriate federal or state 

regulators to meet legal, policy, and procedural requirements. 

National Banks

National banks are chartered by the OCC and are distinguished by the word 

“national” or the initials “N.A.” (national association) in their formal titles. 

They have many attributes. For example, they have broad lending authority 

and the ability to engage directly in a wide range of financial services 

activities. In addition, national banks have the advantage of operating under 

the primary supervision of one regulatory agency. They also enjoy a strong 

reputation resulting from the high standards set by federal law and 

regulations. 

The primary federal regulator of national banks is the Office of the 

Comptroller of the Currency. The OCC charters, regulates, and supervises 

national banks and federal branches and agencies of foreign banks in the 

United States. Those institutions account for more than half of the nation’s 

banking assets. The OCC’s mission is to ensure a safe, sound, and 

competitive national banking system that supports the citizens, communities, 

and economy of the United States. 

Indian Tribes Owning Financial Institutions

Tribal Sovereignty 

Since its formation, the United States has acknowledged the status of federally 

recognized Indian tribes1

 as “domestic dependent nations” that exercise 

governmental authority over their members and their territory.2

 In numerous 

treaties and agreements, the United States has guaranteed the right of Indian 

tribes to self-government3

 and pledged to protect Indian tribes. Congress has 

1

“Indian Entities Recognized and Eligible to Receive Services from the United States Bureau of Indian 

Affairs,” 67 Fed. Reg. 46,328 (July 12, 2002). 

2

In Oklahoma Tax Comm’n v. Citizen Band of Potawatomi Indian Tribe, 498 U.S. 505, 509 (1991), 

the Supreme Court explained that ”Indian tribes are ’domestic dependent nations’ that exercise 

inherent sovereignty over their members and territories.” Id. (quoting) Cherokee Nation v. Georgia, 

30 U.S. (5 Pet.) 1, 17 (1831). As ”domestic dependent nations,” Indian tribes have authority to, 

among other things, determine the form of tribal government; determine tribal membership; maintain 

law and order; administer justice; levy taxes; license, and regulate activities on Indian lands; regulate 

domestic relations; and promote tribal economic development. See generally, F. Cohen, Handbook 

of Federal Indian Law at 246-57 (1982 ed.); 25 USC 476-477 (Indian Reorganization Act). 

3

In Ex Parte Crow Dog, 109 U.S. 556, 568-69 (1883), for example, the Supreme Court explained that 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 2 
recognized that “the United States has a trust responsibility to [Indian tribes] 

that includes the protection of the sovereignty of each tribal government.”4

 

As directed in the presidential executive order on “Consultation and 

Coordination with Indian Tribal Governments” dated November 6, 2000, the 

OCC recognizes tribal sovereignty and works with every federally recognized 

Indian tribe on a government-to-government basis. 

Legal and Practical Considerations

Financial institutions that engage in interstate commerce must comply with 

applicable federal and state banking laws, including chartering requirements. 

Given the nature of the United States financial system, all banks operating in 

this country are engaged in interstate commerce. Therefore, any Indian tribe 

that plans to create a depository institution must obtain a federal or state 

charter. In addition, each tribe must review its tribal law to confirm that it 

does not preclude the tribe from owning a depository institution. The 

following legal and practical considerations also require that an Indian tribe 

obtain either a federal or state charter to create a depository institution. 

Deposit Insurance

The success of any depository institution depends largely on its customers’ 

confidence in the institution’s ability to repay their deposits. Federal deposit 

insurance ensures customers that their funds are safe. Therefore, an 

institution offering federal deposit insurance can maintain a stable base of 

deposits, which is critical to funding the institution’s lending business and 

other activities. Under federal law,5

 deposit insurance is available only to 

financial institutions that have a federal or state charter. 

Legal Restrictions

Federal law places severe restrictions on depository institutions that do not 

have federal deposit insurance. For example, such uninsured entities: 

• Must agree to be examined by state banking regulators in order to take 

deposits (12 USC 378). 

under the Treaty of 1868 with the Sioux, ”among the arts of civilized life, which it was the very 

purpose of all these arrangements to introduce and naturalize among [the Indians], was the highest 

and best of all, that of self-government.” Earlier, in the seminal case Worcester v. Georgia, 31 U.S. (6 

Pet.) 515, 555-56 (1832), the Court had ruled that the Treaty of Holston ”recogniz[ed] the national 

character of the Cherokees, and their right of self-government.” 

4

25 USC 3601(2); see also 25 USC 450, 1451, 1601, 2501-2, 3701, and 4101. 

5

12 USC 1813, 1815; 12 USC 1781. 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

3 of a National Bank
• Must disclose to customers their lack of federal deposit insurance before 

taking deposits (12 USC 1831t(b)). 

• Generally may not receive deposits through the mail (12 USC 1831t(e)). 

Further, because of potential confusion over the regulated nature of a 

financial institution, federal criminal law prohibits use of the words 

“national,” “Federal,” “United States,” “reserve,” or “Deposit Insurance” in 

the names of institutions engaged in certain financial businesses (18 USC 

709). In addition, federal laws regarding disclosure of financial transactions 

(e.g., those requiring disclosure of income to the Internal Revenue Service or 

large cash transactions to the Treasury Department) apply to all businesses 

within the United States, even if the transactions occur in Indian country. 

Business Relationships

A financial institution’s success also results from the willingness of other 

institutions to join it in correspondent and other business relationships. For 

example, several payments systems for wire transfers and check clearing in 

the United States are organized and operated by federally and state-chartered 

insured depository institutions or the Board of Governors of the Federal 

Reserve System (FRB). Access to those systems generally is limited to 

institutions that are federally insured and examined regularly by federal or 

state regulators for safety and soundness. This ability to enter into reciprocal 

clearing and payment relationships gives federally or state-chartered banks a 

greater opportunity to provide necessary financial services to their 

communities. 

Getting Started

A tribal government that decides to charter or acquire a national bank should 

contact the OCC’s Licensing staff to obtain guidance and technical assistance 

before beginning the licensing process. (See Appendix F for a listing of the 

appropriate district office and Washington headquarters contacts.) 

This guide provides cross-references to the Comptroller’s Licensing Manual

(licensing manual), which sets out the licensing procedures. Those booklets, 

which include sample forms, may be obtained from the OCC’s 

Communications Division. They are also available on the OCC’s Web site at 

http://www.occ.treas.gov. Appendix G provides instructions on how to 

obtain the booklets. 

This guide also addresses issues raised in the licensing and supervision 

processes that have been common to previous tribal applicants. Indian tribes 

should consider them in the context of their own tribal laws and economic 

goals. The OCC recognizes that, as domestic dependent nations, tribes may 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 4 
have different perspectives and invites potential tribal applicants to offer new 

or alternative solutions to these issues. 

Finally, the OCC respects the important Native American traditions and 

cultures that may emerge in business relationships with tribes and tribal 

members. To the extent that those cultural issues affect the corporate 

application process, the OCC encourages tribal applicants to discuss them 

with the Licensing staff to work through any issues they may present. 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

5 of a National Bank
A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 6 
A Guide to Tribal Ownership Entry into the 

of a National Bank National Banking System

A tribe can enter the national banking system by: 

• Establishing a new national bank charter. 

• Acquiring a national bank through a merger transaction. 

• Acquiring the stock of an existing national bank. 

• Converting an existing institution to a national bank. 

A national bank may be owned directly by a tribe or group of tribes or 

through a bank holding company (BHC) that is owned by a tribe or group of 

tribes. 

New National Bank Charter

The OCC approves proposals to establish national banks that will foster 

healthy competition, operate in a safe and sound manner, and have a 

reasonable chance of success. In so doing, the OCC does not guarantee that 

a proposal to establish a national bank is without risk to the organizers or 

investors. Each applicant must publish a notice of application in a newspaper 

of general circulation in the community in which the proposed bank will be 

located. The public may submit comments during this notice period. (See 

the “Charters” booklet of the licensing manual for a complete discussion of 

the chartering process and the “Public Involvement” booklet for a discussion 

of the public’s role in this process.) 

 

Decision Criteria

In reaching its decision, the OCC considers whether the proposed bank: 

• Has organizers who are familiar with national banking laws and 

regulations. 

• Has competent management, including a board of directors, that has the 

ability and experience relevant to the type of services to be provided. 

• Has capitalization that is sufficient to support the projected volume and 

type of business. 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

7 of a National Bank
• Can reasonably be expected to achieve and maintain profitability. 

• Will be operated in a safe and sound manner. 

The OCC also considers a proposed bank’s plans for helping to meet the 

credit needs of its entire community, including low- and moderate-income 

neighborhoods, consistent with the safe and sound operation of the bank. 

Organizing Group

The organizing group must be comprised of five or more persons. Although a 

tribe may participate in organizing a bank, the organizers must be individuals 

(e.g., members of the tribe or business leaders in the community). Many, if 

not all, of the organizers normally serve as the bank’s initial board of 

directors. The president of the proposed bank, who is usually the chief 

executive officer (CEO), must be a board member. 

Generally, every national bank director must own stock of the bank and be a 

citizen of the United States throughout his or her term of service (12 USC 72). 

 In addition, every director must meet residency requirements (12 USC 72); 

however, the OCC has discretion to waive those requirements. (See the 

“Director Waivers” booklet of the licensing manual.) 

Importance of the CEO

Selection of a qualified CEO is one of the organizing group’s most important 

decisions affecting the success of the new bank. Together, the organizing 

group and its CEO must have the experience, competence, willingness, and 

ability to direct the proposed bank’s affairs actively in a safe, sound, and legal 

manner. 

The OCC considers the CEO as essential for a new bank’s success. The 

proposed CEO should: 

• Be involved actively in developing the proposed bank’s business plan 

and in implementing it successfully once the bank opens. 

• Have strong leadership skills and have managed a bank or similar 

financial institution successfully or have successful experience as a bank 

officer in areas relevant to the proposed bank’s marketing strategy and 

needs. 

• Possess skills that complement those of the directors and other proposed 

members of the executive officer team, including extensive experience 

in operations or administration. 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 8 
Capital Considerations

An organizing group must raise a sufficient amount of capital to pay all 

organization costs, compete effectively in the market area, and support 

planned operations adequately. The OCC’s chartering policy in 12 CFR 5.20 

states that a proposed bank must have capital sufficient to protect against the 

various risks inherent in the bank’s business plan. This initial capital is net of 

organizing expenses that will be charted to the bank’s capital after it begins 

operations. 

An organizing group, therefore, must raise a sufficient amount of capital to 

pay all organization costs, compete effectively in the market area, and support 

planned operations adequately. Initial capitalization must also be sufficient to 

maintain adequate capital levels, until the bank achieves profitable 

operations. A new bank’s business plan should identify capital adequate to 

address uncertainties in the marketplace and demonstrate a clear ability to 

raise additional capital, if needed. (See the Sources of Capital and Deposits 

section of this guide for a discussion of possible sources of capital.) 

The OCC does not set minimum capital amounts for charter proposal 

differences over projected bank operations, management, and local market 

conditions. The initial capital plan of a new bank is reviewed against its 

business plan to determine if the proposed capital will be sufficient to support 

the projected volume and type of business proposed by the organizing group. 

The OCC will require proposed banks with higher risk profiles to have higher 

capital reserves than those of proposed banks that present lower risk. The 

OCC expects projected capital for new banks to remain at or above the “well 

capitalized” level, as defined in 12 CFR 6.4(b)(1), for the first three years of 

operation. These are “minimum capital standards.” 

The Federal Deposit Insurance Corporation (FDIC) has requirements similar to 

those of the OCC for obtaining federal deposit insurance. The FDIC’s 

statement of policy6

 requires that initial capital should be sufficient to provide 

a Tier 1 capital to assets leverage ratio of no less than 8 percent throughout 

the first three years of operation. 

Stock must be subscribed from and issued to shareholders of national banks. 

National banks may not create classes of common stock with different or no 

voting rights. Federal banking law provides, without exception, that common 

shareholders are entitled to one vote per share held in all matters, except the 

election of directors. At that time, shareholders have cumulative voting 

rights. 

6

 See FDIC Statement of Policy on Applications for Deposit Insurance, 63 Fed. Reg. 44,756, August 

20, 1998, effective October 1, 1998. Also see www.fdic.gov/lawsregs/rules/5000-9.html. 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

9 of a National Bank
Common stock represents ownership of the bank. There is a direct 

correlation between the value of the common stock and the value of the bank 

with dividends to common shareholders tied to the earnings of the bank. The 

OCC generally discourages use of preferred stock in the initial capital 

structure of a new national bank because it is more costly than common 

stock, though its use is not prohibited. 

Preferred stock is more similar to a debt instrument in that it usually has a 

dividend rate either fixed at the time of issuance or based on a market rate of 

interest plus a credit spread and is not tied to the earnings of the bank. 

Dividends on preferred stock create a bank obligation that may prevent the 

bank from retaining earnings to fund future growth. Investors may be 

reluctant to purchase common stock of a bank with a significant amount of 

preferred stock. 

The OCC may determine that including a significant amount of preferred 

stock in a bank’s capital structure could lead to instability in the ownership of 

the bank or otherwise adversely affect the safety and soundness of the 

institution. Such a determination would justify disapproval of the charter 

application or revocation of a preliminary conditional approval already 

issued. 

The OCC generally is opposed to debt-based capitalization of a new bank. If 

any debt will be issued by an affiliate to capitalize the bank, the organizing 

group must demonstrate that debt service requirements can be met without 

reliance on cash flows of any kind from the bank. 

Community Development Banks

Prospective bank organizers may chose to charter a national bank with a 

community development focus (CD bank). A CD bank is a depository 

institution with a stated mission primarily to promote the public welfare, 

including the welfare of low- and moderate-income (LMI) communities or 

families, in which it is chartered to conduct business. A CD bank provides 

financial services that primarily benefit LMI persons, LMI areas, or other areas 

targeted for redevelopment by local, state, tribal, or federal government 

(including federal government enterprise communities and federal 

empowerment zones). CD bank applicants must meet the same statutory, 

regulatory, and procedural requirements as other nationally chartered banks. 

The OCC applies its standard charter policies and procedures that are set forth 

in 12 CFR 5 and the manual. 

A CD bank proposal typically has two unique processing features. First, a CD 

bank most likely will want to receive a “CD focus” designation from the 

OCC, so that other national banks may invest in it under the investment 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 10 
authority of 12 USC 24 (Eleventh) and 12 CFR 24 as well as under 12 CFR 

5.36. Although the OCC determines whether a bank charter should be 

granted, it also uses 12 CFR 24 criteria to decide if the CD designation 

request should be approved. That designation request is integrated into the 

chartering process.7

 Second, the OCC provides technical assistance (TA) to 

the organizers of a CD bank prior to the charter prefiling meeting. 

The Licensing Department oversees the chartering process and serves as the 

primary point of contact for the entire licensing process. The department 

assembles for each CD bank proposal a processing team that typically 

includes staff from licensing, legal, and community development. The 

processing team works closely throughout the charter process for a CD bank. 

 It may meet with organizers and provide information on issues and processes 

involved in the chartering process. (See Appendix D for additional 

information on chartering a CD bank.) 

Acquisition by Merger

A common way to acquire a bank is to merge or consolidate it with an 

“interim bank” — a non-operational bank created solely to facilitate the 

merger or consolidation. This method of acquisition is called a business 

combination and often has certain tax and accounting benefits over acquiring 

directly the stock of an existing bank. A business combination is subject to 

review by the primary federal regulator of the bank that remains after the 

transaction is completed (resulting bank) under the Bank Merger Act (BMA). 

Prior to filing, the acquirer should seek advice from its accounting experts. 

Use of an Interim Bank

The general procedures for establishing an “interim” bank and entering into a 

business combination are contained in the “Business Combinations” booklet 

of the licensing manual. Although the statutes for business combinations are 

different from those for a charter, the OCC conducts the same review it would 

normally do for a charter when the acquirer does not already own a bank. 

An Indian tribe, alternatively, could use an interim bank to acquire the assets 

and assume the liabilities of branches of a bank, rather than an entire bank. 

In that case, the OCC reviews the operations of the target branches, instead of 

those of the target bank, to assess the financial and managerial resources and 

future prospects of the resulting institution. 

7

For additional guidance on 12 CFR 24 or 12 CFR 5.36 requirements for national banks with a CD 

focus, see the OCC memo to prospective community development banks’ organizing groups dated 

October 3, 2001 (see Appendix D). 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

11 of a National Bank
Bank Merger Act Processing

Under the BMA, the applicant files its application with the primary federal 

regulator (responsible agency) of the resulting bank. The applicant also 

publishes notice of the proposed transaction no less than three times during a 

30-day public comment period. Upon receipt of the application, the 

responsible agency contacts the other federal bank regulatory agencies and 

the Department of Justice, which also may comment on the application 

during a 30-day review period. The responsible agency reviews the 

application and any comments it receives from the public and decides the 

transaction based on: 

• The effect of the transaction on competition. 

• The financial and managerial resources and future prospects of the 

combining institutions. 

• The institutions’ Community Reinvestment Act (CRA) records of 

performance in helping to meet the credit needs of the relevant 

communities. (See the Community Reinvestment Act section in this 

guide.) 

• The effect of the transaction on the convenience and needs of the 

community to be served and whether products and services will be 

reduced, including the closing of bank offices, following the transaction. 

The “convenience and needs” factor can be distinguished from the CRA 

factor in that the convenience and needs analysis is prospective, whereas 

the CRA factor requires the OCC to consider the applicants’ records of 

past performance. 

Acquiring the Stock of an Existing Bank

Parties who wish to acquire control of a national bank by obtaining its voting 

stock, rather than by chartering a new bank, must notify the OCC and submit 

certain information described in the “Change in Bank Control” booklet of the 

licensing manual. 

Notification is required by any person acquiring 25 percent or more of a class 

of voting securities of a national bank. If no one owns 25 percent of more of 

a class of voting securities, notification also is required by persons acquiring 

10 percent to 25 percent. Such persons are presumed to have acquired 

control unless this presumption is rebutted successfully. The percentage 

ownership thresholds can be reached by combining shares of persons acting 

in concert. 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 12 
The OCC must receive the notice at least 60 days prior to the acquisition. 

Although the OCC may extend the review period for up to 120 more days, it 

normally completes its review, including background investigations, during 

the initial 60-day review period. The notice is subject to a public notice and 

comment period. 

Decision Criteria

The Change in Bank Control Act (CBCA) establishes the criteria for deciding 

whether to disapprove the notice. The OCC may disapprove a change in 

control if it finds that: 

• The proposed acquisition of control would result in a monopoly or 

would further any monopoly or an attempt to monopolize the business 

of banking anywhere in the United States. 

• The effect of the proposed acquisition may lessen competition 

substantially, tend to create a monopoly, or in any other manner restrain 

trade, and the anticompetitive effects are not outweighed clearly by 

benefits to the convenience and needs of the community to be served. 

• The financial condition of any acquiring party might jeopardize the 

stability of the bank or prejudice the interests of the depositors. 

• The competence, experience, or integrity of any of the acquiring 

party(ies) or of the proposed management indicate that it would not be in 

the interests of the depositors and the public for such persons to control 

the bank. 

• The acquirer does not provide the OCC with all required information. 

• The proposal would result in an adverse effect on the deposit insurance 

funds. 

Tribes Acquiring Bank Stock

The officials of a tribal entity, such as a business committee or tribal council, 

that acquire national bank stock must comply with the CBCA notice and 

background information requirements. When a tribal official who participates 

in voting the bank’s stock is replaced by election, appointment, or otherwise, 

the OCC requires the new official to provide the prior notice and background 

information before he or she can participate in the affairs of the bank. 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

13 of a National Bank
Use of a Voting Trust or Agreement

Because of routine changes in tribal officials through elections, tribes could 

face continuing CBCA notice requirements. To reduce CBCA filing burden, 

some tribes have transferred voting control of the bank stock away from 

elected officials through a voting trust or agreement. For example, a tribe 

may establish a voting trust, in which the trustee will serve for a long period 

of time and may not be replaced by the tribe without cause. As long as the 

voting trust provides absolute voting control to such a trustee, the OCC would 

apply the CBCA requirements to the trustee, and not to the tribal officials who 

face regular elections.8

 

Alternatively, voting control also can be transferred through a voting 

agreement in which the tribe agrees to vote the bank stock according to the 

direction of someone not subject to regular replacement. For example, the 

tribe can agree to vote its stock in the same proportional manner as other 

stockholders. For as long as this voting agreement is in place, changes in 

tribal officials will not trigger the prior notice requirements of the CBCA. The 

“Change in Bank Control” booklet of the licensing manual provides greater 

detail on voting trusts and agreements. 

Use of a Bank Holding Company

A tribe that charters or acquires control of a national bank may consider 

holding the bank stock either directly or through a subordinate entity. If the 

tribe holds the stock through a subordinate entity, such as a corporation, that 

entity could be considered to be a bank holding company subject to 

regulation and examination by the FRB. A tribe proposing to own a national 

bank through a bank holding company would have to apply to the FRB for 

approval to organize the holding company. 

A bank holding company and its affiliates can engage only in activities closely 

related to banking. Therefore, the bank holding company could not hold or 

own certain governmental or commercial activities (e.g., a hospital or gaming 

enterprise). 

On several occasions, the FRB has determined that a tribe would not be 

considered a bank holding company.9

 Accordingly, a tribe that owns 

8

Tribes considering using a voting trust should consult with legal counsel or the appropriate Federal 

Reserve Bank regarding whether the voting trust would be considered a bank holding company 

subject to supervision and regulation under the Bank Holding Company Act. 

9

See Chickasaw Banc Holding Company, 88 Federal Reserve Bulletin 229 (2002); Native American 

Bancorporation Co., 87 Federal Reserve Bulletin 747 (2001); Mille Lacs Bancorporation, Inc., 82 

Federal Reserve Bulletin 336 (1996); Bay Bancorporation, 81 Federal Reserve Bulletin 791 (1995).

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 14 
nonbanking activities outside of a bank holding company would not be 

required to divest those activities if it acquired a bank. In reaching this 

conclusion, the FRB relied on the status of a tribe as a sovereign nation — and 

not a company — under federal law. 

The FRB also relied on several commitments made by the tribes. Those 

commitments were designed to: 

• Ensure that the FRB had sufficient access to information from the tribes 

and their affiliates to determine compliance with federal banking laws. 

• Address potential safety and soundness concerns that could arise if a 

tribe operates diverse nonbanking ventures (e.g., gaming facilities). 

The OCC has required similar commitments in previous cases. An example 

of language used to ensure examiner access to information and the ability of 

the federal banking regulators to bring administrative actions appears in a 

Sample Commitment Letter in Appendix B. Appendix C explains the 

commitments. (See also the Sovereign Immunity section of this guide.) 

The FRB and the OCC also have relied upon similar commitments made by 

tribes that collectively own a national bank in which no one tribe individually 

controls the bank or its parent bank holding company.10 

Conversion

Another alternative for entering the national banking system is to convert an 

institution with a different type of charter. Under applicable statutes and 

regulations, state banks, state savings banks, and other state banking 

institutions engaged in the business of receiving deposits, as well as federal 

savings associations, may be converted directly to national bank charters.11 

The conversion can occur either before or after the tribe acquires the bank. 

Conversions generally are not subject to a public notice and comment period. 

 In determining action on a conversion application, the OCC normally 

considers the institution’s: 

• Condition and management, including compliance with regulatory 

capital requirements. 

• Conformance with statutory criteria, including many of the same 

10Native American Bancorporation Co., 87 Federal Reserve Bulletin 747 (2001) and OCC 

Interpretative Letter #493 (September 28, 2001).

11Indirect conversions also could occur through merging an interim national bank with the statechartered entity or federal savings association. For a discussion of the use of interim banks to enter 

the national banking system, see the previous section on Acquisition by Merger. 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

15 of a National Bank
standards applicable to chartering a new national bank. 

• Adequacy of policies, practices, and procedures that parallel the OCC’s 

“Minimum Policies and Procedures.” (See the Appendix of the 

“Charters” booklet of the licensing manual for specific information.) 

• CRA record of performance. 

The OCC may deny a conversion application for any of the reasons listed 

under the Decisions section appearing later in this guide. In addition, the 

OCC may deny an application if the applicant attempts to use it to escape 

supervisory action by the current regulator. A detailed discussion of 

conversion transactions is contained in the “Conversions” booklet of the 

licensing manual. 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 16 
A Guide to Tribal Ownership

of a National Bank Application Process

The OCC acts on applications to establish or acquire national banks and on 

filings for mergers, branches, and other structural changes in accordance with 

the requirements in national banking laws and OCC regulations. 

 

Prefiling Discussions and Meetings

Before filing an application, the organizers or investors must appoint a 

spokesperson to contact the OCC’s Licensing staff in the district office that 

serves the area in which the bank will be located to discuss corporate 

proposals. (See Appendix F.) The spokesperson, serves as the primary liaison 

between the OCC and the group of organizers or investors. Prefiling 

communications may take the form of formal prefiling meetings or more 

informal discussions or conference calls. 

During this exploratory or prefiling period, the OCC provides technical 

assistance to tribes interested in seeking entry into the national banking 

system. This advisory role may include a one-time prefiling review of draft 

applications, but does not extend to preparation of applications. 

The OCC requires all independent groups seeking to charter a de novo bank 

to participate in a prefiling meeting with OCC staff. Accordingly, when the 

group is ready to proceed with filing an application, the group’s spokesperson 

contacts the OCC’s Licensing staff to schedule a prefiling meeting. Prior to 

the meeting, the organizers should review appropriate materials to become 

familiar with the policies and procedures associated with the charter process. 

The OCC expects all organizers of the proposed new national bank to attend 

the prefiling meeting. 

At the prefiling meeting, or in informal discussions, the Licensing staff reviews 

with the organizing group the OCC’s chartering policy and procedures, 

supervisory perspectives that may affect the proposal specifically, and the 

requirements for filing a charter application and organizing a national bank. 

(See the “Charters” booklet of the licensing manual.) 

For other types of filings, an applicant may request a prefiling meeting with 

OCC staff to review a proposed transaction and the applicable processing 

steps, or the OCC may require a prefiling meeting. Regardless of the type of 

application, when requested, OCC staff will conduct the prefiling meeting at 

a location proposed by the filer rather than at the OCC. 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

17 of a National Bank
Filing the Application

After completion of the prefiling phase, the group files its corporate 

application with the Licensing staff in the district office that serves the area in 

which the bank will be located. The OCC expects each filer to prepare 

accurately and completely each filing submitted to it. Each applicant certifies 

that neither its filing nor any supporting materials contain misrepresentations 

or omissions. 

In addition, each filer should: 

• Submit all necessary information about a proposed corporate filing to aid 

the OCC in reaching an informed decision quickly. 

• Determine compliance with all applicable statutes and regulations. 

• Seek advice, as appropriate, from banking and tribal attorneys. 

The OCC provides more detailed information about filing each type of 

corporate application in other booklets of the licensing manual. Those 

booklets also outline the related policies and procedures for each type of 

application. 

Filing Fees

The OCC publishes a corporate filing fee schedule at least annually in a 

bulletin entitled, “Notice of Comptroller of the Currency Fees.” The OCC 

mails the bulletin to all national banks. A copy of the current bulletin may be 

obtained from the OCC’s Communications Division by calling (202) 874-

4700 or by visiting the OCC’s Web site at http://www.occ.treas.gov. 

The appropriate filing fee, payable by check or other means to the 

“Comptroller of the Currency,” should accompany the application. 

Fee Waivers

The OCC generally does not refund filing fees. However, when justified by 

the OCC’s processing cost or in extenuating circumstances, the OCC may 

grant a request for a fee waiver, reduction, or refund (fee concession). In 

some cases, the OCC will reduce its fees to account for special circumstances 

or reduced processing requirements. For example, the OCC has reduced its 

CBCA processing fees for newly elected or appointed tribal officials who will 

exercise control over bank stock after the initial CBCA notice. Those fees are 

reduced because the review typically is limited to the new official(s) and does 

not cover the entire tribal council or business committee. 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 18 
The filer may request a fee concession in writing, with justification, to the 

licensing manager in the appropriate district office before or simultaneously 

with submission of its corporate filing. The OCC decides all requests 

individually. 

New Charters in Low- or Moderate-Income Areas

The OCC does not require a corporate filing fee for the charter of a new bank 

that will be located in an area that meets the following two requirements: 

• The area is a low- or moderate-income area as defined by 12 CFR 

25.12(l), (n)(1), and (n)(2), which could include an Indian reservation. 

• No other depository institution operates a branch or main office in that 

area. 

Background Investigations

The OCC requires each proposed organizer, director, principal shareholder, 

and executive officer to submit biographical and financial reports in 

connection with applications for de novo charters and certain other types of 

corporate applications. The OCC conducts background checks to assess a 

person’s competence, experience, integrity, and/or financial ability. The 

OCC will determine independently the accuracy and completeness of the 

information submitted for each person and must be satisfied that each person 

is qualified to serve in the proposed capacity. (See the Interagency 

Biographical and Financial Reports form in the “Background Investigations” 

booklet of the licensing manual.) 

Decisions 

The OCC evaluates the entire filing to determine whether the applicant may 

complete the transaction legally and operate the proposed activity in a safe 

and sound manner. Each filing is evaluated on its merits. 

The OCC may approve or conditionally approve any filing after reviewing the 

application and considering the relevant factors. The OCC may impose 

conditions if it determines that they are necessary or appropriate to ensure 

that approval is consistent with applicable statutes, regulations, and OCC 

policies. 

The OCC may deny a filing for reasons, including: 

• The existence of significant supervisory, CRA (if applicable), or 

compliance concerns. 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

19 of a National Bank
• Approval would be inconsistent with applicable law or regulations and 

OCC policy. 

• The applicant fails to provide in a timely manner information that the 

OCC requested to make an informed decision. 

Time Considerations

While the OCC has established standard processing times, many applications 

from tribes present special issues. Accordingly, processing times for such 

applications may exceed the standard time estimates. 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 20 
A Guide to Tribal Ownership Supervision and 

of a National Bank Oversight

Supervision of National Banks

The OCC supervises national banks through onsite examinations and off-site 

monitoring. (See the “Large Bank Supervision” and “Community Bank 

Supervision” booklets of the Comptroller’s Handbook.) Those activities help 

ascertain the condition of individual banks and the overall stability of the 

national banking system. The OCC determines the frequency of its onsite 

examinations (the supervisory cycle) based on the bank’s size, complexity, 

risk profile, and condition. Onsite examinations normally are conducted 

either annually or up to every 18 months (12 CFR 4.6). 

Examiners meet with bank management during the examination to obtain 

information or discuss issues. When the examination is complete, the 

examiners prepare a report and conduct a meeting with the bank’s board of 

directors to discuss the results. Directors review and sign the report of 

examination. 

An environment in which examiners and board members openly and honestly 

communicate benefits a bank. OCC examiners and professional staff have 

experience with a broad range of banking activities and can provide 

independent, objective information on safe and sound banking principles and 

compliance with laws and regulations. 

Board of Directors’ Oversight

A national bank, as other corporate organizations, has shareholders who elect 

a board of directors. A bank’s board of directors oversees the management of 

the bank’s activities. Directors must exercise reasonable care when guiding 

the bank’s affairs. 

Bank directors face unique challenges because banks differ from other 

corporations. Although banks, as other corporations, use their capital to 

support their activities, most of the funds banks put at risk belong to others, 

primarily depositors. Banks lend and invest customers’ deposits to earn a 

profit and a reasonable return to shareholders and to meet the credit needs of 

the community. Properly managing risk to serve those interests is a critical 

challenge faced by the board and bank management. 

As corporate board members, banks’ directors have duties to the banking 

corporations they serve. Those duties are known as the duties of diligence 

and loyalty. 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

21 of a National Bank
The duty of diligence means that directors must devote the time and attention 

necessary to enhance safe, sound, and legal operations of the bank. Directors 

must attend directors’ meetings, review meeting materials, and ask questions 

and seek explanations to understand the issues completely. They must use 

independent judgment and be objective when overseeing the bank’s affairs. 

The director’s decision-making process should involve careful consideration 

of reasonably available and relevant information. 

The duty of loyalty means that directors must never put their own interests 

above those of the bank they serve. The duty of loyalty requires directors to 

administer the affairs of the bank with candor, personal honesty, and integrity. 

 Relationships with the bank must always be at arms-length. In addition, 

directors may not take business opportunities away from the bank 

inappropriately. 

Directors and national banks are accountable, not only to their shareholders 

and depositors, but also to their regulators. The risks inherent in banking, the 

safety net provided by deposit insurance, and the importance of a safe and 

sound banking system to the nation’s economy make this oversight 

appropriate. 

The long-term health of a bank depends on a strong, independent, and 

attentive board. Although a board of directors does not guarantee the bank’s 

success, it must oversee bank operations to ensure that the bank conducts 

business in a safe and sound manner. The board must keep informed about 

the bank’s operating environment; hire and retain competent management; 

and ensure that the bank has a risk management structure and process 

suitable for the bank’s size and activities. The board also must oversee the 

bank’s business performance and ensure that the bank serves the 

community’s credit needs. Problems arising from failures in any of those 

areas represent the board’s failure to exercise properly its oversight 

responsibilities and can result in individual liability if a director has not acted 

as a reasonably prudent director would act in similar circumstances. 

More information about the role of a bank director is available in the OCC’s 

The Director’s Book: The Role of the National Bank Director (The Director’s 

Book). (See Appendix G for information about how to acquire this 

publication.) 

Enforcement Actions

The OCC, in the furtherance of its duty to supervise national banks, can 

respond in several ways to violations of laws, rules, or regulations or unsafe 

or unsound practices or conditions. Upon discovery of serious safety and 

soundness or compliance problems, the OCC will take corrective and 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 22 
remedial action. The “report of examination” identifies and communicates 

clearly the OCC’s assessment of a bank’s condition and describes its 

problems, areas of concern or weaknesses, and the primary cause of each. 

Once those problems have been communicated to a bank, its senior 

management and board of directors will be expected to take appropriate 

corrective measures. Those actions will be important in determining whether 

and what enforcement action the OCC should take. 

The OCC may take enforcement actions against the bank or against parties 

affiliated with banks. Most commonly, the OCC’s enforcement actions are 

brought against banks and their officers and directors. Actions against 

shareholders are rare, unless the shareholders otherwise are involved directly 

in bank management or in an illegal, unsafe or unsound activity with the 

bank. Enforcement actions may be informal or formal. (See The Director’s 

Book for a more complete discussion of enforcement actions available to the 

OCC.) 

Sovereign Immunity 

Under the federal-tribal relationship described previously in the Tribal 

Sovereignty section of this guide, Indian tribes retain their original sovereign 

powers, unless divested of those powers by the United States.12 Thus, Indian 

tribes possess sovereign immunity from lawsuits by states or private citizens 

in the absence of a tribal government waiver or congressional abrogation of 

tribal sovereign immunity.13 Indian tribes are “dependent” on the federal 

government, so tribal sovereign immunity does not bar suit by the United 

States against a tribe to enforce federal law.14

The OCC must be able to examine a national bank and its affiliates 

expeditiously to determine the legality and safety and soundness of 

transactions between them. Because of the nature of bank regulation and 

supervision, any delay in the OCC supervisory process resulting from a claim 

of sovereign immunity may interfere with the supervision of the bank and 

could hamper the OCC’s ability to use enforcement actions to deter unsafe or 

unsound banking practices. Accordingly, the OCC and other federal banking 

regulators have taken the position that tribes proposing to establish or acquire 

a bank must agree not to raise a claim of tribal sovereign immunity as a 

defense to any regulatory or enforcement action in any administrative or 

12Merrion v. Jicarilla Apache Tribe, 455 U.S. 130 (1982). 

13Kiowa Tribe v. Manufacturing Technologies, 118 S.Ct. 1700 (1998); Oklahoma Tax Comm’n v. 

Potawatomi Indian Tribe of Oklahoma, 498 U.S. 505 (1991); Santa Clara Pueblo v. Martinez, 436 

U.S. 49 (1978); Puyallup Tribe v. Department of Game, 433 U.S. 165 (1977); United States v. U.S. 

Fidelity & Guaranty Co., 309 U.S. 506 (1940). 

14Similarly, state sovereign immunity does not bar suit by the federal government against a state. 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

23 of a National Bank
judicial forum. (See Appendixes B and C.) 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 24 
A Guide to Tribal Ownership 

of a National Bank Operations

In meetings with OCC staff, tribal officials have expressed interest in: 

• Permissible banking activities. 

• Safety and soundness protections. 

• Sources of capital and deposits. 

• Branching. 

• Compliance issues. 

Permissible Banking Activities

Bank Powers

National banks are formed under, and derive their powers from, federal law. 

The National Bank Act lists specific activities in which national banks may 

engage. National banks may also engage in “all such incidental powers as 

shall be necessary to carry on the business of banking” (12 USC 24 (Seventh)). 

 The OCC and the courts base many of the activities performed by national 

banks on interpretations of this language over the years. Since those 

interpretations are evolving constantly, it is impossible to provide a complete 

list of all the activities that are permissible for national banks. However, 

some of the more common activities include: 

• Accepting deposits. 

• Making secured and unsecured loans for both personal and business 

purposes. 

• Making real estate loans. 

• Issuing credit cards. 

• Providing safe deposit and fiduciary services. 

• Selling or investing in government (including state, local, and tribal) 

bonds. 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

25 of a National Bank
• Selling or investing in permissible securities. 

• Selling insurance and annuities. 

The OCC’s legal staff in the districts and in Washington can provide more 

information about specific activities in which tribes may be interested. (See 

Appendix F for a list of contacts, the “Investment in Subsidiaries and Equity” 

booklet of the licensing manual, and “Activities Permissible for A National 

Bank” on the OCC’s Web site for more information.) 

Community Development Opportunities 

Federal law also encourages national banks to engage in CD lending and 

investment activities, which may be of particular interest to tribally owned 

banks. Banks can use these activities to: 

• Increase market penetration. 

• Help businesses, organizations, and persons make transitions into more 

traditional banking relationships. 

• Supplement the bank’s regular loans and investments. 

In addition, banks may receive positive consideration during their CRA 

evaluations for CD loans and investments if they meet the criteria under the 

CRA regulations. 

Banks deliver CD financial services in a variety of ways. A bank must 

consider carefully its resources and its goals when determining which 

organizational mechanisms to use to facilitate its CD financing. 

Lending Consortia

Perhaps the most significant trend in bank CD finance has been the 

extraordinary growth in the number and scope of multibank consortia. In 

large and small communities throughout the country, banks and other 

financial institutions are joining with public and private entities to form 

intermediary organizations focused on one or more community development 

objectives. 

Lender consortia have been formed for a variety of purposes. In addition to 

their own programs, banks often participate in one or more consortium 

arrangements that provide financing for low- and moderate-income housing, 

small business development, downtown and neighborhood commercial 

revitalization, or industrial expansion. 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 26 
Multibank consortia may be formal or informal. Their forms depend on their 

purpose and the extent to which other community resources and participants 

are available. The primary forms of multibank consortia include loan pools 

and multibank lending corporations. 

Public Welfare Investments

In addition to their other investment authority, national banks may make 

investments designed primarily to promote the public welfare, including that 

of LMI communities or families (such as by providing housing, services, or 

jobs). A national bank may make such investments directly or by purchasing 

interests in an entity primarily engaged in making such investments. (12 USC 

24 (Eleventh).) Under 12 CFR 24, national banks may make CD investments 

in entities that serve the public welfare. 

Using this authority, national banks may invest in community development 

corporations (CDCs) and community development projects (CD projects). 

Those investments must primarily benefit LMI persons, LMI areas, or other 

areas targeted for redevelopment by local, state, tribal, or federal government 

(including federal enterprise communities and federal empowerment zones) 

(12 CFR 24). For example, national banks have created or invested in CDCs 

and CD projects that: 

• Acquire, rehabilitate, construct, manage, market, and sell housing, 

commercial, and industrial projects. 

• Make equity investments in small businesses. 

• Participate as limited partners in joint ventures related to community 

development. 

• Provide or arrange additional debt financing for projects in which the 

CDC is involved. 

A national bank may invest up to five percent or, with prior OCC approval, 

up to 10 percent of its capital and surplus in investments designed primarily 

to promote the public welfare. 

Some national banks have established for-profit and/or nonprofit CDCs. 

Other national banks have invested in multibank or other multi-investor 

CDCs, existing neighborhood CDCs, limited partnerships for affordable 

housing, or consortium corporations, the activities of which meet the statutory 

and regulatory requirements. Multibank and multi-investor CDCs often are 

developed for larger, more complex CD projects. 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

27 of a National Bank
Small Business Investment Companies

National banks may also invest in small business investment companies 

(SBICs) (15 USC 682(b)). SBICs are venture capital firms licensed by the U.S. 

Small Business Administration. Typically, SBICs support small business 

expansion through a combination of longer-term debt, equity investments, 

and management counseling. SBICs also have certain tax advantages not 

available to banks. 

A SBIC can be organized in any state as either a corporation or a limited 

partnership. Most SBICs are owned by relatively small groups of local 

investors. However, some SBICs are corporations with publicly traded stock, 

and some are subsidiaries of corporations, including banks and bank holding 

companies. 

Bank ownership of a SBIC subsidiary permits banks to invest indirectly in 

small businesses in which they could not have invested otherwise, because of 

banking laws and regulations. In addition to the public welfare investment 

limits described earlier, a bank may invest up to five percent of its capital and 

surplus in SBICs. 

Other Types of CD Opportunities

National banks can explore several other types of CD lending and investing 

opportunities. Banks may purchase securities backed by interests in pools of 

CD loans (e.g., loans for affordable housing or small businesses). Banks also 

can purchase certain municipal or mortgage revenue bonds issued by state, 

municipal, and tribal authorities. Banks must conduct those activities 

consistent with the requirements and limitations of 12 USC 24 (Seventh) and 

the OCC’s implementing regulation (12 CFR 1). National banks should 

contact OCC’s Community Development Division at (202) 874-4930 for more 

information about those programs and OCC’s Bank Activities and Structure 

Division at (202) 874-5300 for information about legal requirements. 

Fiduciary Activities

Federal banking law authorizes national banks to engage in fiduciary 

activities (12 USC 92a). Examples of fiduciary activities include acting as 

trustee, executor, administrator, transfer agent, custodian under a uniform 

gifts to minors act, investment advisor (if the bank receives a fee for its 

investment advice), or any capacity in which the bank possesses investment 

discretion on behalf of another (12 CFR 9.2). 

National banks may offer fiduciary services to their customers upon receipt of 

OCC approval for such activities (12 CFR 5.26). (See the “Fiduciary Powers” 

booklet of the licensing manual.) The OCC generally permits a national bank 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 28 
to exercise fiduciary powers if it is operating in a satisfactory manner, the 

proposed activities comply with relevant statutes and regulations, and the 

bank retains qualified fiduciary management (12 CFR 9). National banks 

located in Indian country should consult with bank counsel to determine 

whether applicable law, as defined by 12 CFR 9.2 (b), permits specific 

fiduciary activities and investments. 

National banks interested in conducting fiduciary activities should contact the 

appropriate district office (see Appendix F) or the Licensing Department at 

(202) 874-5060. 

Safety and Soundness Protections 

Federal banking law includes certain restrictions on the business of banking 

to ensure the safety and soundness of the national banking system. For 

example, federal law limits: 

• Transactions between a bank and its “affiliates.” 

• Loans to “insiders.” 

• Direct bank involvement in gaming or lottery activities. 

Affiliate Transactions

Sections 23A and 23B of the Federal Reserve Act (FRA)15 are designed to 

protect a bank from loss in transactions with its affiliates. Section 23A defines 

“affiliate” to include, among other things, any “company” that controls a bank 

and any company that is under common control with the bank. Subsidiaries 

of banks generally are not considered to be affiliates of the bank. 

Section 23A of the FRA

Section 23A protects banks by: 

• Limiting “covered transactions” with any single affiliate to no more than 

10 percent of the bank’s capital and surplus, and aggregate transactions 

with all affiliates to no more than 20 percent of capital and surplus. 

Covered transactions include: 

— A bank’s extensions of credit to, or guarantees on behalf of, its 

affiliates or purchases of assets from its affiliates. 

1512 USC 371c and 371c-1. 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

29 of a National Bank
— Investments in securities issued by affiliates. 

— Other specified transactions exposing the bank to risk of abuse by its 

affiliates. 

• Requiring that all transactions between a bank and its affiliates be made 

on terms consistent with safe and sound banking practices. In particular, 

a bank may not purchase low-quality assets from the bank’s affiliates. 

• Requiring that all guarantees and extensions of credit to an affiliate be 

secured by a statutorily defined amount of collateral.16

Section 23B of the FRA

Section 23B requires a bank to engage in transactions with its nonbank 

affiliates only on terms and under circumstances that are substantially the 

same or at least as favorable to the bank as those prevailing at the time for 

comparable transactions with unaffiliated companies. This requirement 

generally means that transactions with nonbank affiliates must be conducted 

on an arm’s-length basis. Thus, for example, pricing must reflect fair market 

value. Section 23B applies this restriction to any covered transaction, as 

defined by section 23A, and to other specified transactions, such as a sale of 

securities/assets and the payment of money or the furnishing of services to a 

nonbank affiliate. 

Status of Tribes and Tribal Subunits as “Affiliates”

In considering the application of sections 23A and 23B to a tribally controlled 

bank, one must identify entities that are bank “affiliates.” Because Indian 

tribes and their political/governmental subdivisions enjoy a unique legal 

status, the FRB has determined that they are not “companies” for purposes of 

the BHCA. Therefore, a tribe’s status as an “affiliate” of the bank for purposes 

of sections 23A and 23B is unclear. Both the FRB and the OCC, however, 

routinely require tribes seeking to organize or acquire banks to commit that 

all tribal entities will be deemed to be “affiliates” of the bank for purposes of 

sections 23A and 23B. (See Appendixes B and C.) 

A tribal bank’s covered transactions with its affiliates (e.g., the tribe’s housing 

authority, library, hospital, gaming enterprise, hotel, restaurant, or 

construction or agricultural company) will be subject to the restrictions of 

sections 23A and 23B. As a result, the bank’s guarantees on behalf of, and 

loans to those entities, are subject to section 23A’s quantitative limits and 

16A full or partial exemption from these restrictions may be available for certain statutorily prescribed 

types of transactions. See, for example, section 23A(d). 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 30 
collateralization requirements. Similarly, if a tribal bank wishes to purchase 

loans or other assets from the tribe or a tribal entity, it must comply with: 

• Section 23A’s quantitative limits. 

• Section 23A’s prohibition against banks purchasing low-quality assets 

from affiliates. 

• Section 23B’s requirement that assets be purchased at fair market value. 

Asset purchases need not be collateralized, however. 

Loans to “Insiders”

The OCC and the FRB require a tribe and all of its subunits and businesses to 

agree to be treated as insiders of its tribally owned bank for purposes of the 

FRB’s Regulation O (12 CFR 215) and the OCC’s part 31 (12 CFR 31). This 

means that the bank must comply with the quantitative and qualitative limits 

of those regulations whenever it makes a loan or extension of credit to the 

tribe or its subunits or businesses, as well as when the bank lends to its 

insiders (i.e., officers, directors, and controlling shareholders and their related 

interests). 

Under those regulations, a bank (subject to a number of regulatory and 

statutory exceptions) may not make a loan to an insider in an amount that 

exceeds 15 percent of the bank’s capital and surplus. In addition, a bank 

cannot extend preferential loans to insiders. Additional restrictions and 

requirements apply to loans to executive officers and other types of insider 

loans under those regulations. 

Gaming

A tribe may own a national bank even if it also operates a gaming operation. 

However, several legal restrictions prevent direct involvement in lottery or 

gaming activity by national banks. For instance, national banks are forbidden 

from selling or redeeming lottery tickets or gambling chips, or permitting 

others to do so on their banking premises. In addition, direct public access 

from the bank to a casino is prohibited (12 USC 25a). However, a national 

bank can provide routine banking services to a casino or gaming enterprise, 

subject to the restrictions on transactions with affiliates and insiders as 

described previously. Further, a national bank can operate an Automated 

Teller Machine (ATM) on casino premises. 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

31 of a National Bank
Sources of Capital and Deposits

Most new banks, and many new bank holding companies, raise capital by 

selling common stock to the public. The OCC has no general prohibition 

against the inclusion of preferred stock in the initial capital structure of a new 

national bank. However, the OCC may determine that the inclusion of a 

significant amount of preferred stock in a bank’s capital structure could lead 

to instability in the ownership of the bank or otherwise adversely affect the 

safety and soundness of the institution. Such a determination would justify 

disapproval of the charter application or revocation of a preliminary approval 

already issued. 

Capital from Financial Institutions

As described in the New National Bank Charter section of this guide, when 

the OCC grants preliminary approval to a charter with a community 

development focus, federally insured financial institutions may make equity 

investments in a CD bank as a CD project.17 These investor banks may 

receive positive consideration under CRA for their investment. In addition to 

having an ownership stake in the institution, banks may serve as advisors; 

lend staff, including senior and executive management; contribute facilities, 

equipment, and expertise; and sit as directors, along with community leaders, 

on their governing boards. 

CDFI Fund

The Community Development Banking and Financial Institutions Act 

established the Community Development Financial Institutions (CDFI) Fund 

(CDFI Fund) as a wholly owned government corporation. The CDFI Fund’s 

responsibility is to facilitate the flow of capital and services to underserved 

communities and persons that have been unable to take advantage of 

traditional financial thoroughfares. It accomplishes this through the 

administration of funding and technical assistance programs, briefly described 

as follows. Additional information about these programs, including 

applications, is available by visiting the CDFI Fund’s Web site at 

http://www.cdfifund.gov or by phoning (202) 622-8662. 

CDFI Core Component

The Core Component is the CDFI Fund's main program under which CDFIs, 

or entities proposing to become CDFIs, may apply for financial and technical 

assistance. National banks with a community development focus may apply 

17However, any one national bank proposing to invest in a CD bank must limit its investment to 

avoid being considered a bank holding company under the Bank Holding Company Act. 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 32 
for equity capital and technical assistance from the CDFI Fund. The 

investments of the CDFI program are intended to provide much-needed 

capital to those institutions. 

Under the CDFI program, the fund provides assistance to selected applicants 

to enhance their ability to make loans and investments and provide services 

to benefit designated investment area(s) or, targeted population(s), or both (12 

CFR 1805.200). The statute specifically recognizes that Indian tribes may be 

targeted populations (12 USC 4702 (20)). The fund selects eligible awardees 

through a competitive application process. 

 

BEA Program Component

Another program administered by the CDFI Fund is the Bank Enterprise Act 

(BEA) Program. The BEA program is intended to encourage insured 

depository institutions to increase loans, services, and technical assistance 

within distressed communities and to make equity investments in CDFIs. The 

BEA program rewards participating insured depository institutions for 

increasing their activities in economically distressed communities and 

investing in CDFIs through an awards program. The selection of awardees is 

made through a competitive process, and awards are made only after 

successful completion of the specified activities. 

Native American CDFI Technical Assistance (NACTA) Component 

For greater access to capital on tribal lands, the CDFI Fund established a fund 

to provide technical assistance and training for Native American 

communities. The fund is intended to: increase access to capital in urban 

and rural Native American communities; create new CDFIs that serve these 

communities; and increase the capacity of existing CDFIs that currently serve 

Indian country. Awards are made through a competitive application process. 

New Markets Tax Credit 

Individual and corporate investors can make an equity investment in an 

eligible “community development entity” (CDE)18 and receive a New Markets 

Tax Credit worth more than 30 percent of the amount invested over the life of 

the credit, in present value terms. Eligible CDEs could include for-profit 

CDFIs, for-profit subsidiaries of CDCs, SBA-licensed new markets venture 

capital companies,19 and specialized small business investment companies.20

18 See definition of CDE at 66 Fed. Reg. 21,846 (May 1, 2001). 

19 See 13 CFR part 108 for a definition of new markets venture capital company. 

20 See 13 CFR 107.50 (“Section 301(d) Licensee”) for a definition of specialized small business 

investment company. 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

33 of a National Bank
Tribal Funds as Deposits

Tribal funds may be a significant source of deposits for a tribally owned bank. 

Deposit insurance can provide some protection for the funds. Another 

alternative is for the depository bank to collateralize the tribal deposits with 

government securities owned by the bank. In fact, a bond or other collateral 

must secure tribal trust funds (25 USC 151, 162a). Under the National Bank 

Act, national banks may secure any funds deposited by a federally recognized 

Indian tribe by government securities prescribed by the Secretary of the 

Treasury (12 USC 90). Collateralized deposits that exceed the federal deposit 

insurance limits would have priority over non-collateralized deposits in the 

event of bank failure. In establishing the interest rates and other terms of 

those deposits from affiliated tribal entities, the bank should consider the 

applicability of section 23B of the Federal Reserve Act (FRA) and its 

restrictions on preferential contracts between affiliates. (See the previous 

discussion in the section on Section 23B of the FRA.) 

Minority Banks 

The OCC’s “Policy Statement on Minority-Owned National Banks” (see 

Appendix E) recognizes the importance of minority-owned banks in 

addressing financial services needs in the minority and low-income 

communities they serve. It also affirms the OCC’s commitment to 

encouraging the success of these banks through the OCC advice and 

technical assistance to minority bank applicants interested in entering the 

national banking system. 

Operating minority-owned national banks also will be provided with 

supervisory support through regular communication and examination 

continuity. Additionally, the OCC maintains a list of minority-owned national 

banks on National Banknet to promote a dialogue with peer banks and 

potential investors and the use of the Comparative Analysis Reporting system 

that helps the bank identify its relative strengths and weaknesses. Tribally 

owned national banks qualify as minority-owned national banks. 

Minority and women-owned banks, including tribally owned banks, may 

benefit from special programs. One program is the Minority Bank Deposit 

Program (MBDP), coordinated by the Financial Management Service (FMS) of 

the Department of Treasury. This federal government initiative fosters the 

establishment, preservation, and strengthening of minority business 

enterprise. It is a voluntary program to encourage federal agencies, state and 

local governments, and the private sector to use MBDP participants as 

depositaries and financial agents. Potential deposits include: 

• Agency deposits of public money. 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 34 
• Cash advances to federal contractors and grantees. 

• Certain independent deposits (e.g., postal service deposits and 

certificates of deposit, certain Department of Agriculture funds and funds 

that the Bureau of Indian Affairs invests on behalf of Indian tribes and 

Alaskan native villages). 

An eligible financial institution must apply to become a participant in the 

MBDP and receive certification from the FMS. (See Appendix H.) Additional 

information about the MBDP can be found online at http://www.fms.treas. 

gov/mbdp.

In addition to participation in the MBDP, minority and women-owned 

institutions may benefit from their status because the CRA encourages other 

banks and thrifts to engage in certain other activities with minority and 

women-owned institutions.21 Those activities include: 

• Donating, selling, or renting a branch location to a minority or womenowned depository institution at below market terms. 

• Undertaking capital investments, loan participation, and other ventures 

in cooperation with minority or women-owned depository institutions, 

provided that those activities help meet the credit needs of local 

communities in which such institutions are chartered.

In addition, the OCC and other bank and thrift regulators have given as an 

example of a qualified investment for CRA purposes, an investment, grant, 

deposit or share in or to a minority- or women-owned financial institution that 

primarily lend or facilitate lending in low- and moderate-income areas or to 

low- and moderate-income individuals in order to promote community 

development.22 If the minority-owned national bank’s activities will not 

directly benefit the investor bank’s CRA assessment area, the investor bank 

may still receive CRA consideration for an investment in the minority-owned 

bank if the investor bank has adequately addressed the needs of its 

assessment area and the activities of the minority-owned national bank 

benefit areas or individuals located somewhere within a broader statewide or 

regional area that includes the investor bank’s assessment area(s).23

2112 USC 2903(b) and 2907. 

22Federal Financial Institutions Examination Council, “Community Reinvestment Act; Interagency 

Questions and Answers Regarding Community Reinvestment,” 66 Fed. Reg. 36,620, 36,629 (July 12, 

2001) (§§ __.12(s) & 563e.12(r) – 4) (hereinafter “Interagency Questions and Answers”). 

23 Interagency Questions and Answers, 66 Fed. Reg. at 36,626-27 (§§ __.12(i) & 563e.12(h) – 5). 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

35 of a National Bank
Branching

National banks, upon formation, must have a main office for the conduct of 

business with the public. However, they are not limited to conducting their 

business only from that location. A consideration for many tribes is 

increasing the accessibility of banking services to their members, who may 

have to travel great distances to do their banking. Establishing branches or 

alternatives to branches, such as ATMs and banking by telephone or 

computer, may help tribally owned national banks better serve their 

customers. Some national banks operating in Indian country have established 

mobile branches to reach remote areas of Indian reservations. The OCC will 

consider innovative proposals that would make banking more accessible in 

Indian communities. 

 

Federal Law

If a national bank seeks to establish or acquire one or more branches to 

receive deposits, pay withdrawals, or make loans to customers in person, it 

must obtain approval from the OCC, which applies standards established in 

federal law. Those standards, in turn, are based on standards set forth in state 

law (12 USC 36). 

For branching on Indian reservations, the OCC, applying federal law, 

historically has looked to the branching statutes of the state in which the 

Indian reservation is located to determine the authority of a bank to branch on 

an Indian reservation. The branching standards applied by the OCC under 

federal law vary depending on whether the branch to be established or 

acquired is located in the same state as the main office or other branches of 

the national bank. 

Intrastate Branching

Federal law provides that a national bank has the same rights to branch in a 

state in which it is located as the state gives to a bank that it chartered. For 

example, if a state bank may branch anywhere and establish or acquire an 

unlimited number of branches within that state, a national bank would have 

the same expansive rights. If a state places branching limitations on a bank 

that it charters (e.g., to have only two branches or to have branches only 

within 25 miles of the main office), a national bank located in that state also 

would be subject to those branching limitations. 

Interstate Branching

If a national bank with its main office in a particular state or territory seeks to 

branch in a different state (i.e., interstate branching), it can be accomplished 

by: 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 36 
• Establishing a new branch. 

• Acquiring an existing bank. 

• Acquiring an existing branch from an existing bank. 

Most states have some restrictions on interstate branching. Federal law 

applies different standards to each situation. (See the “Branches and 

Relocations” and “Business Combinations” booklets of the licensing manual 

for detailed discussions about establishing and acquiring branches.) 

Mobile Branches

A mobile branch is a staffed facility, such as a van or trailer operated by a 

national bank that travels to various locations to transact business with bank 

customers that normally might be conducted at a more traditional brick and 

mortar branch. Those activities can include accepting deposits, paying 

withdrawals, and disbursing loan proceeds. 

Generally, mobile branches can operate in two ways. First, they may stop at 

public places and provide branching services to any customer or prospective 

customer who stops at the facility. This type of facility may offer additional 

services, such as the opening of deposit and loan accounts. Alternatively, a 

mobile branch may operate as a messenger service that travels to the location 

of specific customers (e.g., a customer’s home or office) to pick up deposits or 

pay withdrawals. In both situations, because the facility is a branch, it is 

subject to the provisions governing national bank branching that are 

discussed previously, including the requirement for OCC approval. 

In addition, some national banks hire a third party messenger service to pick 

up deposits and pay withdrawals at the homes or offices of specific 

customers. The consideration of whether a messenger service constitutes a 

branch is evaluated based on the factors set forth in OCC regulations (12 CFR 

7.1012). If the messenger service is not considered to be a branch, it is not 

subject to branching limitations and approval by the OCC. 

Alternatives to Branching

Assuming that a bank cannot, for legal or operational reasons, enter a 

particular locality through branching, a national bank may establish an office 

that engages in more limited activities and is not considered to be a branch. 

As a result, it is not subject to geographic restrictions or OCC approval. It 

may: 

• Engage in loan origination. These are called loan production offices 

(LPOs). A national bank may engage in almost any activity involved in 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

37 of a National Bank
lending at an LPO, except disbursement of loan proceeds to borrowers. 

• Loan proceeds must be disbursed through another mechanism, such as 

by: 

— Check through the mail. 

— Disbursal through a third-party escrow agent. 

— Crediting a deposit account of the borrower. 

Other methods of disbursal that do not trigger branching concerns also 

may be available. 

• Engage in deposit production. These are called deposit production 

offices (DPOs). At a DPO, a national bank may open deposit accounts 

and engage in other activities related to the deposit account function, but 

may not take deposits from a depositor or pay withdrawals to a 

customer. Deposits and withdrawals must be made through other 

mechanisms, such as by mail or ATM machines. 

• Establish an ATM or other form of unstaffed automated facility that 

customers may use to make deposits or receive withdrawals or loan 

proceeds. Automated facilities may be equipped with a telephone or 

televideo device that allows contact with bank personnel. 

Since an LPO, DPO, or unstaffed automated facilities, such as ATMs, are not 

considered to be branches, any combination of these facilities at one location 

does not create a branch.24 

Compliance Issues

All national banks, including tribally owned national banks, are subject to a 

number of statutes that are administered or enforced by the OCC. (See 

Appendix G for a list of related booklets that are included in the OCC’s 

Comptroller’s Handbook.) In addition to banking laws, national banks may 

be subject to various other federal, state, or tribal laws and regulations, 

including securities, insurance, fiduciary, consumer protection, and disclosure 

laws and regulations. For example, state or tribal contract law will apply to 

many transactions between a bank and its customers. 

Because tribes interested in entering the national banking system have 

24 See 12 CFR 7.1003-1005 (LPOs), 12 CFR 7.4004 (DPOs), 12 CFR 7.4003 (unstaffed automated 

facilities), and 12 CFR 7.4005 (combinations) for more information. 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 38 
questioned how certain statutes would be applied to tribally owned banks, 

this section includes a short discussion on: 

• Fair lending. 

• Community reinvestment. 

• Securities. 

• Bank secrecy and anti-money laundering. 

Fair Lending Statutes

The federal fair lending statutes are the Equal Credit Opportunity Act (ECOA) 

and the Fair Housing Act (FH Act). The ECOA prohibits discrimination in any 

part of a credit transaction. The ECOA applies to any extension of credit, 

including extensions of credit to persons, small businesses, corporations, 

partnerships, and trusts. The FH Act applies to residential real-estate related 

transactions. Both of these acts prohibit discrimination based on race, color, 

religion, sex, or national origin. The ECOA also prohibits discrimination 

based on age, marital status, receipt of public assistance, or the exercise of a 

right under the Consumer Protection Act. The FH Act also prohibits 

discrimination based on handicap or familial status. 

Generally, discrimination in a credit transaction against persons because they 

are (or are not) Native Americans violates the ECOA and, if the transaction is 

related to residential real estate, violates the FH Act. The ECOA, however, 

provides a limited exception to its general prohibition against discrimination 

when, to meet special social needs, a bank offers a special purpose credit 

program that conforms with the requirements in the FRB’s Regulation B (12 

CFR 202.8). The Department of Housing and Urban Development has 

indicated that a special purpose credit program meeting the requirements of 

Regulation B will also be allowed under the FH Act. 

Community Reinvestment Act

Financial institutions are encouraged under the CRA to help meet the credit 

needs of their entire communities, consistent with the safe and sound 

operations of such institutions. Federal regulators rate banks and thrifts on 

how well they meet those credit needs. The regulator assigns a rating of 

“outstanding,” “satisfactory,” “needs to improve,” or “substantial 

noncompliance” based on the bank’s CRA performance. 

The OCC takes into account a bank’s record of helping to meet community 

credit needs in consideration of corporate applications for: 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

39 of a National Bank
• The establishment of a domestic branch. 

• The relocation of the main office or a branch. 

• The merger of, or consolidation with, or the acquisition of assets or 

assumption of liabilities of an insured depository institution under the 

BMA. 

• The conversion of an insured depository institution to a national bank 

charter. 

The OCC’s CRA regulation (12 CFR 25) establishes the framework and criteria 

by which the OCC will assess an institution’s record of helping to meet the 

credit needs of its community. The CRA regulations provide different 

performance standards for assessing banks of different sizes and types. Large 

retail banks are evaluated based on their performance under three tests: a 

lending test, an investment test, and a service test. Wholesale and limited 

purpose banks are assessed under a community development test. Small 

institutions generally must meet the criteria of a streamlined small bank test. 

However, any bank can elect to be evaluated based on a strategic plan, 

developed with community input and approved by the OCC. Regardless of 

the performance test under which a national bank falls, examiners consider 

the bank’s lending, qualified investments, and services. 

The CRA regulation requires each bank to delineate at least one assessment 

area. A retail bank’s assessment area(s) generally must consist of one or more 

metropolitan statistical areas (MSAs) or one or more contiguous political 

subdivisions, such as counties, cities, or towns. It must include the 

geographies25 in which the bank has its main office, branches, and deposittaking ATMs, as well as the surrounding geographies in which the bank has 

originated or purchased a substantial portion of its loans.26 The federal 

financial institution supervisory agencies, including the OCC, have 

interpreted the term “political subdivision” to include Indian reservations.27 A 

bank may adjust the boundaries of its assessment area(s) to include only the 

portion of a political subdivision that it reasonably can be expected to serve. 

Each bank’s assessment area(s): 

25”Geography” is defined in the CRA regulation to mean a census tract or block numbering area 

delineated by the U.S. Bureau of the Census in the most recent decennial census. 12 CFR 25.12(l). 

2612 CFR 25.41(c). 

27Interagency Questions and Answers, 66 Fed. Reg. 36,620, 36,640-41 (July 12, 2001) (§ __.41(c)(1)-

1). 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 40 
• Must consist only of whole geographies. 

• May not reflect illegal discrimination or redlining. 

• May not arbitrarily exclude low- or moderate-income geographies, taking 

into account the bank’s size and financial condition. 

• May not extend substantially beyond a consolidated metropolitan 

statistical area boundary or beyond a state boundary, unless the 

assessment area is located in a multistate metropolitan statistical area.28 

If a bank designates an Indian reservation as an assessment area, it should be 

aware that the reservation boundaries may not be consistent with those of the 

census tracts or block numbering areas (geographies) in the area. In that case, 

the bank must ensure that its assessment area consists only of whole 

geographies by adding any portions of the geographies that lie outside the 

Indian reservation to the delineated assessment area.29

A tribe that owns a bank located in a city outside of the reservation should 

also consider CRA assessment area requirements. The tribe, in this situation, 

should be aware that the bank’s assessment area(s) must include the MSA or 

other political subdivision in which the bank’s main office is located, its 

branches, and its deposit-taking ATMs. 

(For more detailed information about compliance with consumer protection, 

fair lending,30 and community reinvestment laws, see the pertinent booklets 

on consumer compliance in the Comptroller’s Handbook. Appendix G 

explains how to obtain the booklets.) 

Securities Laws

Offerings

Under the federal securities laws, the OCC reviews securities offering 

materials prepared by national banks. National banks seeking to sell or offer 

their securities must comply with both the applicable federal securities laws, 

including anti-fraud provisions, and OCC regulations. National banks must 

comply with those provisions when capitalizing a newly chartered bank, or 

when raising additional capital for their businesses and growth (12 CFR 16). 

2812 CFR 25.41(d) and (e). 

29Interagency Questions and Answers, 66 Fed. Reg. at 36,641 (§ __.41(c)(1)-1). 

30See also Policy Statement on Discrimination in Lending, 59 Fed. Reg. 18,266 (April 15, 1994). 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

41 of a National Bank
National bank securities offerings may be exempt from the registration 

requirements of the federal securities laws and the OCC’s part 16. Such 

exemptions apply, for example, to nonpublic offerings and to small issues 

under the SEC’s Regulation A. National banks should review 12 CFR 16.5 

and relevant provisions of the federal securities laws to ensure that they 

structure those offerings to meet the requirements for an exemption from 

registration. 

A national bank offering or selling its own securities in a particular state also 

may be subject to individual state laws governing the registration and sale of 

securities within the state (known popularly as “blue sky laws”). Tribally 

owned national banks should consult with bank counsel to determine 

whether they are subject to blue sky laws in a particular jurisdiction before

selling securities. 

Proxy Statements

The OCC reviews and clears registered banks’ proxy or information 

statements before distribution to shareholders. A “registered” bank refers to a 

bank with assets of more than $1 million and with a class of stock owned by 

500 or more persons. The OCC reviews proxy statements for material, 

substantive factual errors or omissions. Registered national banks must file 

proxy materials with the OCC when conducting/engaging in the following 

activities: 

• A merger/consolidation when the resulting bank is a national bank. 

• An election of bank directors. 

• An annual or special shareholder meeting. 

The OCC has incorporated by reference SEC regulations governing proxy 

solicitations and content at 12 CFR 11. Those regulations detail the 

information that banks must include in their proxy materials. 

Bank Secrecy Act and Anti-Money Laundering Provisions 

The Bank Secrecy Act (BSA) and its implementing regulations require 

financial institutions to file certain currency and monetary instrument reports 

and to maintain certain records for possible use in criminal, tax, and 

regulatory proceedings (31 USC 5311 et seq., 31 CFR 103, 12 CFR 21.21). 

Congress enacted the BSA to attempt to prevent financial institutions from 

being used as intermediaries for the movement of criminally derived funds to 

conceal the true source, ownership, or use of the funds, i.e., money 

laundering. Although attempts to launder money through a legitimate 

financial institution can emanate from many different sources, certain kinds of 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 42 
businesses, transactions, or geographic locations may lend themselves more 

readily to potential criminal activity than others. 

All national banks must establish and maintain procedures reasonably 

designed to ensure and monitor their compliance with the BSA and its 

implementing regulations. This requires national banks to establish a 

compliance program that includes, at a minimum, adequate BSA policies and 

procedures, designation of a compliance officer, and BSA training and audits. 

In addition, national banks should be aware of various criminal statutes 

prohibiting money laundering and structuring of deposits to evade the BSA 

reporting requirements. (See 18 USC 1956, 1957 and 31 USC 5324.) 

Banks must ensure that they have reasonable policies and procedures to 

verify the identity of people seeking to open an account at the bank as well as 

policies and procedures reasonably designed to detect suspicious activity. 

Each bank must file a Suspicious Activity Report (SAR) whenever it identifies: 

• A known or suspected violation of law. 

• A suspicious transaction that: 

— Has no business or apparent lawful purpose; 

— Is not the sort of transaction in which a particular customer 

normally would be expected to engage; and

— Has no reasonable explanation for the transaction. 

• A suspicious transaction that involves more than $5,000 in potential 

money laundering. 

• A suspicious transaction that is an apparent attempt to evade the 

provisions of the BSA. 

The SAR reporting requirements are provided in 12 CFR 21.11. 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

43 of a National Bank
A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 44 
A Guide to Tribal Ownership 

of a National Bank Appendix A

Financial Institution Charters and Regulators 

Type of Charter Primary Regulator(s)

National Bank Office of the Comptroller of the Currency 

State Member Bank1 State Bank Regulator and Federal Reserve Board 

(FRB) 

State Non-Member Bank; State Savings 

Bank 

State Bank Regulator and Federal Deposit 

Insurance Corporation (FDIC) 

Federal Savings Association; Federal 

Savings Bank 

Office of Thrift Supervision (OTS) 

State Savings Association State Bank Regulator and OTS 

Bank Holding Company FRB2

Savings Association Holding Company OTS3

Federal Credit Union National Credit Union Administration (NCUA) 

State Credit Union State Regulator and, where applicable by state 

law, NCUA4

1 State banks can become members of the Federal Reserve System. National banks must be member 

banks. 

2

Depending on the state, bank and savings association holding companies also may be regulated by 

the state banking regulator and/or the state agency responsible for regulating corporate practices (e.g., 

Secretary of State). 

3 See footnote 2. 

4

Most states require state credit unions to be insured by the National Credit Union Administration, 

whose regulations governing insurance, therefore, would apply to such states’ credit unions. 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

45 of a National Bank
Roles of the Financial Regulators

• Contact the Office of the Comptroller of the Currency (OCC) for 

information about a national bank charter. To determine the appropriate 

office, see Appendix F for addresses and phone numbers. In addition, 

the OCC’s Comptroller’s Licensing Manual is available on the OCC’s 

Web site (http://www.occ.treas.gov) in a searchable and downloadable 

format. 

• Contact the Office of Thrift Supervision (OTS) for information about 

chartering a federal savings association or savings association holding 

company. To determine the appropriate regional office, see the OTS’s 

Web site at http://ots.treas.gov or contact: 

OTS 

1700 G Street, NW 

Washington, DC 20552 

(202) 906-6000 

• Contact the appropriate regional office of the Federal Deposit Insurance 

Corporation (FDIC) for information about federal deposit insurance for 

banks and savings associations. To determine the appropriate regional 

office, see the FDIC’s Web site at http://www.fdic.gov or contact: 

FDIC 

550 17th Street, N.W. 

Washington, DC 20429 

(800) 276-6003 / (202) 416-6940 

• Contact the appropriate Federal Reserve Bank for information about 

establishing a bank holding company or becoming a Fed member bank. 

To determine the appropriate office, see the Fed’s Web site at 

http://www.federalreserve.gov or contact: 

Board of Governors of the Federal Reserve System 

20th and Constitution Avenue, N.W. 

Washington, DC 20551 

(202) 452-3000 

• Contact the appropriate regional office of the National Credit Union 

Administration (NCUA) for information about chartering a federal credit 

union or obtaining deposit insurance. To determine the appropriate 

office, see NCUA’s Web site at http://www.ncua.gov or contact: 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 46 
NCUA 

1775 Duke Street 

Alexandria, Virginia 22314-3428 

(703) 518-6330 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

47 of a National Bank
A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 48 
A Guide to Tribal Ownership 

of a National Bank Appendix B

Sample Commitment Letter

Date 

Licensing Manager 

Appropriate District Office 

Street Address 

City, State, ZIP Code 

Re: Letter of Commitments for National Bank, City, State 

Dear Licensing Manager: 

Enclosed please find commitments pertaining to our application for a change 

in bank control of a national bank, city, state, pursuant to the Change in Bank 

Control Act (12 USC 1817(j)). Attached to these commitments are all 

requisite attachments, including all necessary Tribal resolutions and letters of 

counsel. 

Definitions: 

Tribe means, individually and collectively, [full name of Tribe] and any 

council, committee, division, office, commission, department, board, agency, 

authority, facility, instrumentality of [name of Tribe], or any other subordinate 

organization. Attached to these commitments is attachment A, which sets 

forth, as represented by the Tribe on this date, the name and each business 

activity of and/or other function performed by each such subordinate 

organization of the Tribe, and the relation of each such subordinate 

organization to, the Tribe, and which by this reference is incorporated. 

Affiliate of the Tribe means, individually and collectively, any company that 

from time-to-time is controlled (as defined in the Board’s Regulation O, 12 

CFR 215.2(c)) by the Tribe, acting alone or in concert with one or more other 

persons (as defined in the Board’s Regulation Y, 12 CFR 225.2(k)), but 

excluding any company identified and listed as a subordinate organization of 

the Tribe in attachment A or in a revised form of attachment A submitted to 

the Board pursuant to the following paragraph. Attached to these 

commitments is attachment B, which sets forth, as represented by the Tribe 

on this date, the name, address and business activity of each affiliate of the 

Tribe, and the equity interest of the Tribe, as of this date, and which by this 

reference is incorporated. 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

49 of a National Bank
Bank means, individually and collectively, [bank being chartered, acquired, 

or controlled], and every other bank (as defined in section 2(c) of the Bank 

Holding Company Act), including any successor to the bank. “Bank” includes 

each company that from time-to-time is a subsidiary of the bank. 

Banking law means: 

• All federal, tribal, and state statutes, rules, and regulations that the Office 

of the Comptroller of the Currency (OCC), the Board of Governors of the 

Federal Reserve System (Board), the Federal Deposit Insurance 

Corporation (FDIC), the U.S. Department of Justice (DOJ), the U.S. 

Department of the Treasury (DOT), or any other federal banking agency 

or department (individually, a “federal banking authority” and, 

collectively, the “federal banking authorities”) administers or for which 

such federal banking authority has rulemaking or enforcement authority, 

including without limitation, all provisions of Title 12, U.S. Code, as 

from time-to-time may be applicable to the bank, any institution-affiliated 

party (IAP) (as defined in sections 3(u) and 8(b)(3) of the Federal Deposit 

Insurance Act (FDIA)) thereof, the Tribe, or any affiliate of the Tribe. 

• All federal criminal law violations that arise: 

— From the applicability of any provision of a banking law. 

— Under section 1001 of Title 18 of the U.S. Code as it relates to 

information, statements, omissions, writings, or reports to a federal 

banking authority. 

— Any other provision of Title 18 of the U.S. Code applicable to the 

ownership, control, operation or activities of a bank, bank holding 

company, or subsidiary thereof, or to the activities of any IAP for 

such bank, bank holding company or subsidiary. 

— The Bank Secrecy Act, or the Currency and Foreign Transactions 

Reporting Act. 

• Any order or written agreement issued by any federal banking authority 

or an administrative law judge acting under authority delegated by any 

federal banking authority or federal court of competent jurisdiction 

pursuant to a banking law against or with bank, the Tribe, any affiliate of 

the Tribe, or any IAP. 

Company means any corporation, partnership, business trust, association, or 

similar organization, including, but not limited to, those formed under Tribal 

statute. 

Commitments

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 50 
1. The Tribe agrees to waive and to cause each present and future affiliate 

of the Tribe to waive, any claim that a Tribal court has jurisdiction over, 

and the Tribe agrees not to assert sovereign immunity as a defense to, 

any matter, issue, dispute, investigation, action, subpoena, examination, 

or proceeding by any federal banking authority that arises as a result of 

Tribe’s ownership interest of the bank. In all dealings of the Tribe or any 

affiliate of the Tribe with the bank, the Tribe will be deemed to be an 

IAP of the bank. 

Before consummation of the proposed acquisition of additional shares of 

the bank, the Tribe shall submit to the OCC: 

• A properly executed and authenticated certificate of official action 

(including the relevant resolution) of the appropriate governing 

body of the Tribe, authorizing and directing the signatory 

designated by such entity to execute the commitments on its behalf, 

and by so doing to bind such entity to each provision of the 

commitments, including the waiver of any jurisdictional claim in 

any tribal court as provided in this commitment, to which the 

official seal or stamp of the Tribe, as the case may be, is affixed. 

• One or more reasoned opinion of counsel, in a form satisfactory to 

the OCC, that the Tribe is authorized under all of its organizational 

and other governing documents (e.g., tribal constitution, bylaws, 

articles of incorporation, partnership agreements) to make, and the 

legal sufficiency of, the waiver of any jurisdictional claim in any 

tribal court, as provided in the commitment. 

2. The Tribe agrees to provide, and agrees to cause any affiliate of the Tribe 

to provide, to the extent possible, all information, regardless of whether 

such information is located within or without the Tribe’s territory (tribal 

territory), requested for any investigation, action, or proceeding by any 

federal banking authority relating to: 

• Enforcement or possible enforcement of any banking law for any 

person or entity subject to it which arise from or relate to 

transactions of the bank. 

• The ownership or control of the Tribe by the bank. 

• The operations or activities of the bank, or any IAP, under the 

banking law, including any potential violation of law or regulation, 

any unsafe or unsound practice, or breach of fiduciary duty by the 

bank, or any IAP. 

• The compliance of the Tribe and/or any affiliate with the provisions 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

51 of a National Bank
of these commitments. 

3. The Tribe agrees to provide and to cause any affiliate of the Tribe to 

provide, to the extent possible, the OCC with access to, to permit the 

OCC to examine, and to provide, as requested, the OCC with copies of 

all books and records, and any other information of or concerning the 

Tribe and/or each affiliate of the Tribe regardless of whether such books, 

records, and other information is located within or without tribal 

territory, to the extent necessary to enable the OCC to examine fully the 

details of any transaction or series of transactions of the bank with the 

Tribe or any affiliate of the Tribe, directly or indirectly. 

4. In all dealings of the Tribe or any affiliate of the Tribe with the bank, the 

Tribe, and each affiliate of the Tribe and all insiders (as defined in the 

Board’s Resolution, 12 CFR 215.2(h)), will be deemed to be insiders for 

purposes of the Board’s Regulation O, 12 CFR Part 215, and the bank, 

and all insiders thereof, will comply with all requirements set out under 

the Board’s Regulation O. In all such dealings, the Tribe and each 

affiliate of the Tribe will be deemed to be affiliates of the bank for 

purposes of sections 23A and 23B of the Federal Reserve Act, and the 

Tribe, each affiliate of the Tribe, and bank will comply with the 

requirements of sections 23A and 23B of the Federal Reserve Act 

applicable to affiliate of banks. The bank will not, directly or indirectly, 

make any extension of credit to the Tribe or to any affiliate of the Tribe, 

including the issuance of a commercial or standby letter of credit or 

guarantee for the benefit of the Tribe or any affiliate of the Tribe, in an 

amount exceeding the applicable limits of, or in a manner inconsistent 

with, the requirements regarding extensions of credit subject to sections 

12 USC 375a, 375b, 1817(k), and 1972 and implementing regulations 

set forth at 12 CFR parts 31 and 215. For purposes of this commitment, 

any transaction, including any extension of credit, with a third party shall 

be deemed to be a transaction with the Tribe or an affiliate of the Tribe 

to the extent that the proceeds of the transaction are used for the benefit 

of, or are transferred to the Tribe or an affiliate of the Tribe. 

5. The Tribe agrees to submit to the OCC revised attachment A and/or B to 

reflect any change in the information contained in attachment A and/or 

B, and a statement of the reasons for such change, within 30 days after 

any such change and annually, or upon the request of OCC staff. Should 

an entity become a subordinate organization or an affiliate of the Tribe 

and remain as such before the Tribe submits a revised notice as 

previously described, any such event shall be reported to the OCC 

within 30 days of any change. All commitments shall apply in full to 

any entity that becomes a subordinate organization or an affiliate of the 

Tribe after this date, immediately upon such entity satisfying the 

definitions of such terms in Part 1 hereof, as if such entity were a 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 52 
subordinate organization or an affiliate of the Tribe, as the case may be, 

on this date. All such notices shall be submitted to the OCC together 

with one or more reasoned opinions of counsel that the subordinate 

organization of the Tribe or the affiliate of the Tribe, as the case may be, 

is authorized under all of its organizational and other governing 

documents (e.g., tribal constitution, bylaws, articles of incorporation, 

partnership agreement) to make, and the legal sufficiency of, each of the 

commitments including the waiver of any jurisdiction of any tribal court, 

as provided in commitment one. 

Attached, and in which this reference is incorporated, is a properly executed 

and authenticated certificate of a tribal resolution authorizing the signatory to 

execute the commitments. 

Full Name of Tribe 

(Signature of Tribal Chief or other tribal official with authority to sign on 

behalf of the Tribe) 

Printed or typed name of Tribal Chief or other tribal official 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

53 of a National Bank
A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 54 
A Guide to Tribal Ownership 

of a National Bank Appendix C

Explanatory Information about Commitments

Commitment One

This commitment assures the OCC that the Tribe will be subject to the federal 

banking laws and that enforcement of those laws will be administered by the 

federal court system. The commitment also assures the OCC that the Tribe 

has the authority under its own laws to enter into these commitments and has 

done so consistent with those laws. 

Commitment Two

This commitment assures the OCC of ready access to information, such as 

loan documentation, shareholder lists, or transaction data, that the agency 

might require during an examination or investigation of the bank or parties 

affiliated with the bank. 

Commitment Three 

This commitment is required for reasons similar to those for requiring 

commitment two. Commitment three, however, references specifically books 

and records as they are often the subject of examinations, investigations, and 

other supervisory or enforcement proceedings. 

Commitment Four

This commitment clarifies the applicability to the Tribe and its affiliates of 

statutes and regulations concerning loans to insiders and transactions with 

affiliates. These statutes and regulations will be applied to Tribes in a manner 

no different than they are applied to organizations, such as partnerships, 

corporations, banks, and bank holding companies, or to the affiliates of any of 

these organizations. 

Commitment Five 

This commitment outlines the process by which the Tribe will keep the OCC 

informed of changes in its organization’s structure or its affiliation with other 

entities. The commitment also ensures the OCC that any changes in the 

organizational structure of the Tribe will not impair the applicability or 

enforceability of the commitments to the Tribe, its subordinate organizations, 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

55 of a National Bank
or its affiliates. Finally, the commitments assure the OCC that the actions 

taken by representatives for the Tribe have been properly executed, 

authenticated, and signed. 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 56 
A Guide to Tribal Ownership 

of a National Bank Appendix D

 

O

Comptroller of the Currency 

Administrator of National Banks 

Washington, DC 20219 

October 3, 2001 

To: Prospective Community Development Bank Organizing Groups 

From: Julie L. Williams, First Senior Deputy Comptroller and Chief 

 Counsel 

Subject: Community Development (CD) Banks 

The Comptroller of the Currency (OCC) receives numerous inquiries and 

proposals from individuals and groups expressing interest in establishing a 

CD bank to conduct new business or converting existing operations into a CD 

bank. The purpose of this memorandum is to outline the criteria the OCC 

uses in granting a CD bank charter, explain the assistance OCC may provide 

to organizers of CD banks, and state the factors the OCC considers to be 

critical to the success of any de novo CD bank. 

What Is a CD Bank? 

A CD bank is a depository institution with a stated mission primarily to 

benefit the underserved communities in which it is chartered to conduct 

business. A CD bank pursues this specialized mission by providing financial 

services to low- and moderate-income (LMI) individuals or communities or 

benefiting other areas targeted for redevelopment by local, state, tribal, or 

federal government. 

The OCC grants a special CD designation to banks that intend primarily to 

engage in these CD activities. The bank’s articles of association must indicate 

the express intent primarily to lend, invest, and provide services in the 

underserved communities in which it is chartered to conduct business. The 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

57 of a National Bank
OCC designates a bank as a CD bank after a review of the charter application 

(de novo CD bank) or business plan (conversion to a CD bank). CD banks 

must meet the same safety and soundness, statutory, regulatory, business 

planning, and procedural requirements as all other national banks. 

Applying for a CD Bank Charter 

For organizers of de novo CD banks, the guidelines for applying for a national 

bank charter are outlined in the following OCC publications, which are 

available on the OCC’s Web site and from the OCC’s district licensing offices 

(locations and telephone numbers are also available in the “Licensing 

Applications” section of the OCC’s Web site at www.occ.treas.gov): 

• A Guide to the National Banking System

• Comptroller’s Licensing Manual in booklets dealing with:

- Charters (de novo and conversions) 

- Corporate Organization 

- General Policies and Procedures 

- Background Investigations 

- Public Involvement 

• A Guide to Tribal Ownership of a National Bank

In addition to the required submissions outlined in these publications, CD 

banks must provide to the OCC a proposal describing how and why the bank 

is eligible for and seeking the CD designation with specific information 

documenting: 

• How the bank’s activities will primarily benefit LMI individuals, LMI areas, 

or other areas targeted for redevelopment by local, state, tribal, or the 

federal government, and 

• The nature of the nonbank community involvement. 

How Can National Banks Invest in CD Banks?

A national bank may make an investment in a CD bank either under the 

statute and regulation pertaining to community development corporations 

(CDCs), CD projects, and other public welfare investments (12 USC 24 

(Eleventh) and 12 CFR Part 24), or under its broad authority to engage in the 

business of banking and activities incidental thereto (12 USC 24 (Seventh)). A 

bank may also receive credit under the Community Reinvestment Act (CRA) 

for investing in a CD bank. 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 58 
A national bank may make an investment pursuant to the provisions of 12 

USC 24 (Eleventh), provided that the CD bank’s loans, investments, and 

services primarily benefit LMI individuals, LMI areas, or other areas targeted 

for redevelopment by state, local, tribal, or the federal government by 

providing or supporting one or more of the items listed below: 

• Affordable housing, community services, or permanent jobs for LMI 

individuals 

• Equity or debt financing for small businesses 

• Area revitalization or stabilization 

• Other activities, services, or facilities that primarily promote the public 

welfare 

National banks seeking to make an investment in a CD bank under this 

authority should follow the procedures outlined in 12 CFR Part 24 

(information is available on the Community Affairs page of OCC’s Web site 

under “Publications and Resource Materials”). It should be noted that, 

typically, a national bank’s total investment under the Part 24 authority is 

limited to 5 percent of its capital and unimpaired surplus, although it may go 

as high as 10 percent, with OCC approval. 

Alternatively, a national bank may make a noncontrolling investment in a CD 

bank following the provisions of 12 USC 24 (Seventh), provided that the 

following provisions of 12 CFR 5.36 are met: 

• The activities of the CD bank in which the investment is made must be 

limited to activities that are part of, or incidental to, the business of 

banking (or otherwise authorized for a national bank). 

• The investing bank must be able to prevent the CD bank from engaging in 

activities that do not meet the foregoing standard, or be able to withdraw 

its investment. 

• The investment in the CD bank is convenient and useful to the investing 

bank in carrying out its business and not a mere passive investment 

unrelated to the bank’s banking business. 

• The investing bank’s loss exposure in the CD bank must be limited, as a 

legal and accounting matter, and the bank must not have open-ended 

liability for the obligations of the enterprise. 

Regardless of which investment authority is used, an investing bank that 

would have a significant ownership interest in a CD bank should consult the 

Federal Reserve to determine whether its investment would cause the 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

59 of a National Bank
investing bank to be deemed a bank holding company under the Bank 

Holding Company Act.

Can National Banks Purchase Subordinated Debt of CD Banks? 

National banks may invest in subordinated debt of a CD bank. Such 

investment may be eligible as Tier 2 capital for the CD bank and thus can 

enhance a CD bank’s ability to supplement its capital base. However, it 

should be noted that the inclusion of term subordinated debt in Tier 2 capital 

is limited to 50 percent of the CD bank’s Tier 1 capital (see appendix A of 12 

CFR Part 3). 

How Can State-Chartered Banks and Bank Holding Companies Invest in CD 

Banks? 

State-chartered banks may be able to invest in CD banks pursuant to the 

Federal Reserve Board’s Regulation H (for state member banks) or the FDIC’s 

rules set forth at 12 CFR Part 362 (for state nonmember banks). Bank holding 

companies also may be able to make investments in CD banks following the 

provisions of the Federal Reserve Board’s Regulation Y. The Federal Deposit 

Insurance Corporation (FDIC) can provide more information about 12 CFR 

Part 362. The Federal Reserve Board or the Federal Reserve Banks (FRB) can 

provide more information about Regulations H and Y. 

Technical Assistance Available to CD Bank Organizers 

The OCC provides technical assistance upon request to the organizers of de 

novo CD banks, during the charter exploratory, planning, and pre-filing 

period. An OCC team of licensing, supervision, legal, and community affairs 

staff is available to meet with organizers to provide information and feedback 

on issues related to a de novo bank’s proposed business plan and CD focus. 

The OCC encourages prospective applicants to contact the OCC’s district 

licensing staff that serves the area in which the bank will be located to discuss 

corporate proposals. 

After these initial discussions, groups that have explored all charter and 

community development aspects of their application are encouraged to 

submit a draft application to the OCC prior to the submission of their formal 

application. The OCC considers it important that the initial draft be as 

complete as possible. 

For a listing of phone numbers and more detailed information on the specifics 

of the application requirements and timeframes, please visit the “Licensing 

Applications” page of the OCC’s Web site. 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 60 
Key Factors to Consider When Organizing a CD Bank 

It is the OCC’s policy to approve proposals to establish national banks that 

will operate in a safe and sound manner and have a reasonable chance of 

success. The OCC’s decision whether or not to grant a new charter 

application depends on an assessment of the organizing group’s 

qualifications, choice of management and directors, and the strength of its 

business plan, including capitalization, contingency planning, and financial 

projections. 

CD banks face unique challenges in accomplishing the dual objectives of 

being profitable institutions operated in a safe and sound manner and 

fulfilling their mission to focus on activities that promote the public welfare. 

Based on the OCC’s experience working with CD banks that have been 

chartered and are now in business, the agency has identified the following 

areas deserving special attention by entities seeking to establish or convert to 

a CD bank. 

Contact with Community Organizations 

It is important that, early in the process of organizing or converting to a CD 

bank, organizers meet with local community organizations to engage them in 

a dialogue on CD needs in the geographic area in which the bank will be 

operating. This will help determine local community credit needs, which 

must be demonstrated as part of any de novo bank charter application or 

existing bank’s conversion to a CD focus. The OCC would view positively an 

organizing group that has strong ties in the community where it wishes to 

operate the bank. 

Diversified Asset Base and Income Stream 

Organizers must consider how a de novo institution will operate in a safe and 

sound manner, given its CD focus. Often, this means the bank's plans should 

serve both a broader market as well as its primary CD-focus market in order 

to lay a broad foundation for its future operations. Diversified asset and 

liability portfolios, product selection, funding sources, and target markets help 

make a bank less vulnerable to a downturn in any one market that could 

significantly affect its income or liquidity. 

In the early stages, organizers of CD banks likely will need to develop a 

business plan that addresses not only the underserved communities that are 

its special focus but also more traditional, full service retail banking activities. 

These services may encompass a wider geographical area than a CD bank’s 

targeted communities, particularly in the early years of operation. During this 

“ramping-up” period, this mix of business can help a CD bank to grow into a 

healthy and profitable institution while still meeting its overall mission of 

serving targeted areas. An exclusive focus on underserved markets in a CD 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

61 of a National Bank
bank’s early years simply may not generate enough business to enable the de 

novo institution to become viable and may subject it to a higher risk profile 

than desirable. The ramping-up period will vary depending upon the bank’s 

business plan, as well as economic and market conditions, and may last for 

several years. 

Capital Adequacy 

The OCC’s chartering policy in 12 CFR 5.20 states that a proposed bank must 

have capital sufficient to protect against the various risks inherent in the 

bank’s business plan. This initial capital raised is net of organizing expenses 

that will be charged to the bank’s capital after it begins operations. An 

organizing group must therefore raise a sufficient amount of capital to pay all 

organization costs, compete effectively in the market area, and support 

planned operations adequately. Additionally, initial capitalization must be 

sufficient to maintain adequate capital levels until the bank achieves 

profitable operations. A de novo CD bank’s business plan should also 

identify sufficient capital to address uncertainties in the marketplace and 

should demonstrate a clear ability to raise additional capital, if needed. 

The OCC has not formally established a minimum capital level for de novo

banks. The initial capital plan of a CD bank is reviewed against the bank’s 

business plan to determine if the proposed capital will be sufficient to support 

the projected volume and type of business the organizing group has 

proposed. The OCC, as the primary supervisor of national banks, will require 

proposed banks, including CD banks, with higher risk profiles to have higher 

capital reserves than proposed banks that present lower risk. For example, 

recent CD bank charter approvals have presented capital plans in the range of 

$6.2 million to $7.5 million with various applications incorporating different 

risk factors. The FDIC requires that, as a condition of granting deposit 

insurance, de novo banks maintain a Tier 1 capital-to-assets ratio of not less 

than 8 percent through the first three years of operation. (See FDIC Statement 

of Policy on Applications for Deposit Insurance at 

www.fdic.gov/lawsregs/rules/5000-9.html.)

Financial Assistance from the Community Development Financial Institutions 

(CDFI) Fund 

The Treasury Department’s CDFI Fund can provide additional sources of 

financial assistance for CD banks under the two programs described as 

follows. However, organizers of CD banks should understand key provisions 

of these programs, specifically, how they may limit flexibility or otherwise 

affect the bank. Information on these programs may be obtained from the 

Treasury Department Web site located at www.treas.gov/cdfi. 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 62 
CDFI Core Component Program: This program builds the financial capacity 

of CDFIs by providing equity investments, grants, loans, or deposits to 

enhance the capital base of CDFIs. In addition, under the Core Component 

Program, technical assistance grants are provided to CDFIs to build their 

capacity to address the CD needs of their target markets. 

Bank Enterprise Act (BEA) Awards: The BEA program provides monetary 

incentives for banks and thrifts to expand their investments in CDFIs or to 

increase their lending, investment, and service activities in distressed 

communities. BEA monies are awarded on a competitive basis to institutions 

that apply for the funds and meet agreed-upon performance goals. 

Bank Management/Board of Directors 

The OCC requires each organizer to have a history of responsibility, personal 

honesty, and integrity. While personal wealth is not a requirement for a bank 

organizer or director, poor management of personal financial affairs will have 

a negative impact on the OCC's decision. Additional information on these 

topics can be found in the OCC’s booklet on “Background Investigations” in 

the “Corporate Policies” section of the Comptroller’s Licensing Manual and 

on the OCC’s Web site. 

The management team of a CD bank should demonstrate the experience, 

competence, and willingness to operate a CD-focused institution. Organizers 

should recognize that the selection of a qualified CEO is one of the most 

important decisions they will make. The risks associated with a CD bank 

require that the proposed CEO be actively involved in developing the 

business plan, have strong leadership skills, and be an experienced banking 

executive. The CEO should have skills that complement those of the 

directors and other proposed members of the executive officer team. Also, 

the unique characteristics of a CD bank business plan and the specific needs 

of its customers often require the management team to be comprised of 

individuals who understand CD and have worked with the LMI community. 

Likewise, CD bank directors should have a balance of banking experience 

and knowledge of local community credit needs in order to keep the 

institution focused on becoming profitable while fulfilling its mission. It is 

vitally important that proposed directors of de novo CD banks fully 

understand and be committed to the institution’s proposed business plan. 

Given the great importance of selecting proper management and directors, 

the OCC suggests early discussions with its staff for guidance regarding best 

practices in the selection process. Many problems may be avoided when 

care is exercised in this process. 

The proposed management team must, either individually or collectively, 

possess extensive knowledge and experience with the highly specialized 

lending products and lines of business typically proposed by CD banks (e.g., 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

63 of a National Bank
Small Business Administration and Federal Housing Administration 

programs). An organizing group should match carefully the skills of the 

management team to the specialized lending products and services that the 

CD bank will offer. 

General information about the role of directors can be obtained in The 

Director’s Book: The Role of a National Bank Director (available on the 

“Publications” page of OCC’s Web site). 

Partnerships with Other Banks 

Other financial institutions that invest in a CD bank may be operating in the 

same market and have considerable experience and talent to offer in an 

advisory role to that CD bank. Investor institutions are able to assist CD banks 

in a number of ways, including 

• Providing an “officer-on-loan” for temporary training assistance 

• Consulting and training on operations, and 

• Establishing two-way referral/correspondent relationships on loan 

business. 

The OCC encourages CD banks to learn as much as they can from investor 

banks that have developed CD banking expertise in similar markets and lines 

of business. 

However, the OCC has often seen bank investors conclude their relationships 

with a CD bank after providing initial capital, perhaps because of perceived 

prohibitions under the Depository Institutions Management Interlocks Act 

(DIMIA) (12 USC 3201 et seq.) which generally prohibits management 

officials from serving on the board of directors of an unaffiliated bank. While 

these regulations should be researched based on the specific circumstances, 

there are some exceptions that may be available. These exceptions allow 

management officials of an established bank to serve on the board of an 

unaffiliated CD bank that provides services in an LMI area, is minority- or 

women-owned, or is newly chartered. In cases where a management official 

of a national bank seeks to serve on the board of an unaffiliated CD bank, the 

bank may request the OCC to grant a waiver from the DIMIA restrictions. 

Such requests must be made in writing to the OCC’s licensing staff and, 

where appropriate, are normally granted for three years for established banks 

and two years for de novo banks. 

There is also a “small market share” exemption to the DIMIA management 

interlock restrictions where the two “interlocking” banks together hold less 

than 20 percent of the deposits in their community or relevant metropolitan 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 64 
statistical area. Banks need not seek OCC approval for this exemption but 

they must maintain records to support their qualification for this exemption. 

Representatives of banks also may serve on an advisory board or as an honorary 

director of a CD bank, provided that the CD bank’s total assets are less than 

$100 million. If a CD bank’s assets exceed this level, then the interlock 

provisions (and exceptions) described above would apply. 

A bank investor in a CD bank that seeks to place one of its management 

officials on the board of a CD bank should also consult the Board of 

Governors of the Federal Reserve System or the Federal Reserve Banks 

concerning certain prohibitions under the FRB’s Bank Holding Company Act 

rules and interpretations governing control of banks. 

Funding and Liquidity 

Some CD banks have found that lending and investing needs in their target 

communities exceed available core deposits in these areas. Consequently, 

some CD banks have turned to philanthropic and corporate investors located 

outside of their service areas to make deposits in the bank. There may be 

higher costs associated with reliance on these types of funding sources (see 

the “Liquidity” booklet of the Comptroller’s Handbook which is available on 

the “Publications” page of the OCC’s Web site). CD banks relying on these 

types of funds should be prepared to document to their examiners the sources 

of these funds and the degree to which these funds demonstrate credit and 

rate sensitivity. CD banks should have contingency plans to replace these 

funding sources if the deposits are withdrawn. 

CD Banks’ CRA Evaluation

CD banks are evaluated under the same CRA criteria as all other community 

banks. Holding a CD charter is not a guarantee of an “Outstanding” CRA 

rating. Organizers, management, and directors should recognize that, due to 

the unique risks associated with a CD bank’s niche market, the institution 

may need to pursue its CD mission by gradually ramping up its CD activities 

in order to concentrate on the fundamentals of safety and soundness, prudent 

growth, and profitability during its early years. Thus, a CD bank’s CRA 

performance may not be as strong in its early years as it will become as its 

business and marketing plan develops. 

Communications with the OCC 

Responsibility for the direction and management of a CD bank rests with the 

bank’s board of directors and senior management team. The OCC’s national 

bank examiners (NBEs) and district community affairs officers (DCAOs) will 

not participate in setting policies or directing the bank. 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

65 of a National Bank
However, given CD banks’ unique challenge to be profitable institutions, 

operate in a safe and sound manner, and fulfill their CD mission, the OCC 

encourages CD banks to maintain an ongoing dialogue with their NBEs and 

DCAOs. As part of the OCC’s supervisory process and through quarterly 

reviews of bank performance, the OCC will work with CD banks to identify 

risks to the bank and suggest methods of approaching potential problems. As 

part of the supervisory process, the OCC will provide information on 

compliance, risk management, and operational issues facing the bank. 

Experts are also available in each district to provide guidance on subjects 

such as credit and asset management, consumer compliance, capital markets, 

bank information systems, legal issues, and economic conditions. 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 66 
A Guide to Tribal Ownership 

of a National Bank Appendix E

 

O

Comptroller of the Currency 

Administrator of National Banks 

Washington, DC 20219 

Office of the Comptroller of the Currency 

Policy Statement on Minority-Owned National Banks 

Recognizing the important role that minority-owned banks play in addressing 

financial services needs in the minority and low-income communities they 

serve, the Office of the Comptroller of the Currency (OCC) affirms its 

commitment to encouraging the success of these banks. Consistent with the 

goals of Section 308 of the Financial Institutions Reform, Recovery, and 

Enforcement Act of 1989 (FIRREA), which include preserving existing 

minority depository institutions and promoting the creation of new minority 

depository institutions, this statement outlines OCC policies and initiatives 

that further the ability of minority banks to prosper and meet the needs of 

their communities. These policies complement the OCC’s overall mission of 

ensuring a safe, sound, and competitive banking system. 

Definition of Minority-Owned Banks 

OCC’s definition of minority-owned bank is consistent with that established 

by the Treasury Department for eligibility in the Minority Bank Deposit 

Program and includes minority-owned or controlled banks as well as banks 

owned, controlled, and operated by women. 

Identification of Minority-Owned Banks 

OCC will annually identify minority-owned national banks that participate in 

the Treasury Department’s Minority Bank Deposit Program. OCC will 

maintain a list of minority-owned national banks and make it available on 

National Banknet and the OCC’s Web site to entities interested in 

establishing business relationships with minority-owned institutions. 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

67 of a National Bank
Formation of Minority-Owned Banks 

The OCC provides advice and technical assistance to minority bank 

applicants interested in entering the national banking system. A national 

bank whose mission focuses on low- and moderate-income individuals or 

areas or government revitalization areas may be eligible for designation as a 

community development focus bank which would facilitate investments by 

other depository institutions. The OCC has produced materials geared to 

minority bank organizers, which facilitate the development of national bank 

applications. The OCC also provides assistance to organizers of minority 

institutions through pre-filing meetings and comments on draft applications. 

Requests for such assistance should be directed to the licensing manager in 

the OCC’s district office that serves the area in which the bank will be 

headquartered. 

Capital for Minority-Owned Banks 

Investments in minority-owned banks are allowable investments pursuant to 

12 USC 24(Eleventh) and 12 CFR Part 24 (“Part 24”), depending on the nature 

of the minority institution’s mission and business operations, and may also be 

eligible for positive consideration under the Community Reinvestment Act. 

Receiving a community development focus designation, or otherwise 

engaging in activities authorized by Part 24, may further enhance access to 

capital for a minority-owned national bank by helping to establish its 

eligibility for funding from the Community Development Financial Institutions 

Fund of the Treasury Department. 

OCC’s Community Affairs Department can provide technical assistance to 

minority-owned institutions interested in structuring community development 

investments under Part 24. In addition, the Community Affairs Department 

can assist an established minority-owned bank in seeking designation as a 

community development focus bank. 

Examination Support for Minority-Owned Banks 

As part of its supervisory process and through quarterly reviews of bank 

performance, OCC examiners communicate regularly with minority bankers 

to identify risks to the bank and suggest methods of approaching any potential 

problems. As part of the supervisory process, OCC examiners also will 

provide information on compliance, risk management, and operational issues 

facing the bank. Experts also are available in each district to provide 

guidance on subjects such as credit and asset management, consumer 

compliance, capital markets, bank information systems, legal issues, and 

economic conditions. 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 68 
The OCC will provide examination continuity for minority-owned national 

banks through the assignment of a portfolio manager who will have 

familiarity with the bank. Assignments of examiners to minority-owned banks 

will take into account the expertise and background needed to properly 

evaluate the products and services offered by those institutions and the 

markets and environments in which they operate.

Information, Education and Outreach for Minority-Owned Banks 

Minority-owned national banks will be invited to attend outreach meetings 

throughout the country to discuss supervisory and industry issues with OCC 

personnel. In addition, the OCC will sponsor roundtable discussions or 

conferences for CEOs and senior managers of minority-owned national banks 

to highlight “best practices” and issues of particular relevance to minorityowned institutions. When feasible, OCC staff also will participate in other 

seminars, conferences and workshops directed to minority-owned institution 

audiences. 

The OCC will promote the use of the Comparative Analysis Reporting system 

on National Banknet by minority-owned national banks. A minority-owned 

national bank can use this system to develop peer group analyses that help 

the bank to identify its relative strengths and weaknesses by comparing its 

performance to other specified banks or groups of banks. The system 

includes publicly available call report data on all Federal Deposit Insurance 

Corporation (FDIC)-insured banks. 

Supervisory Cases 

When supervisory cases entail resolving a minority-owned national bank, the 

OCC will work with the FDIC and will provide the necessary support to 

enable the FDIC to identify potential minority investors. The OCC 

encourages the preservation of the minority character of institutions in cases 

involving mergers or acquisitions. 

 /s/______________

John D. Hawke, Jr. 

Comptroller of the Currency 

March 28, 2001

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

69 of a National Bank
A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 70 
A Guide to Tribal Ownership 

of a National Bank Appendix F

OCC Contacts 

General Information 

Office of the Comptroller of the Currency 

250 E Street, S.W. 

Washington, DC 20219-0001 

Telephone (202) 874-5000

Web site http://www.occ.treas.gov

Headquarters Divisions of Interest to Tribes Forming National Banks 

Asset Management

Telephone (202) 874-4447 

Fax Number (202) 874-9390 

Has responsibility for the development and coordination of supervisory 

policies for national banks’ asset management activities, including traditional 

fiduciary activities, investment advisory services, and the retail sale of 

nondeposit products.

Bank Activities and Structure

Telephone (202) 874-5300 

Fax Number (202) 874-5322 

Has responsibility for legal issues relating to banking organizations and 

structures and various banking activities. 

Licensing

Telephone (202) 874-5060 

Fax Number (202) 874-5293 

Web site bos@occ.treas.gov 

Processes licensing applications from all national bank subsidiaries of certain 

holding companies assigned to the Washington, DC licensing unit, and 

applications involving novel, complex, or precedent-setting issues. Also has 

responsibility for oversight of district Licensing staff and development and 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

71 of a National Bank
implementation of licensing policies. 

Banking Relations

Telephone (202) 874-4990 

Fax Number (202) 874-5305 

Builds and maintains bridges with financial services industry stakeholders, 

primarily commercial banks and their representatives, for a constructive 

exchange of information integral to OCC policy creation and implementation. 

Communications

Telephone (202) 874-4700 

Subscriptions (202) 874-4960 

Fax Number (202) 874-5263 

Provides publications support and information services for the agency, 

including responding to inquiries from the public about the agency’s mission 

and activities, operating and overseeing the Public Information Room, which 

offers access to OCC public documents, and processing all initial requests 

filed under the Freedom of Information and Privacy Acts. 

Compliance 

Telephone (202) 874-4428 

Fax Number (202) 874-5221 

Has responsibility for compliance and CRA examinations as well as 

community and consumer policy issues, including designation of limited 

purpose banks under 12 CFR 25. 

Community Affairs 

Telephone (202) 874-5556 

Fax Number (202) 874-4652 

Has responsibility for community development policy issues, including filings 

under 12 CFR 24, and national level initiatives encouraging investment, 

lending, and services to low- and moderate-income persons and communities 

and small businesses. Also has responsibility for the OCC’s outreach and 

external relations with consumer and community organizations, as well as 

national and regional civil rights and minority-based organizations, 

particularly those concerned with access to financial services. 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 72 
Community and Consumer Law 

Telephone (202) 874-5750 

Fax Number (202) 874-5322 

Has responsibility for community and consumer legal issues, including 

community reinvestment and community development (CD) matters. 

Ombudsman

Comptroller of the Currency 

301 McKinney Street, Suite 3725 

Houston, Texas 77010-3034 

Telephone (713) 336-4350 

Fax Number (713) 336-4351 

Has responsibility for overseeing the national bank appeals process and the 

customer assistance group. 

Securities and Corporate Practices

Telephone (202) 874-5210 

Fax Number (202) 874-5279 

Has responsibility for securities, derivatives, capital markets, fiduciary, and 

insurance legal issues, as well as corporate governance and shareholder 

rights. 

OCC District Offices

Northeastern 

Licensing Manager 

1114 Avenue of the Americas, Suite 3900 

New York, New York 10036-7780 

Telephone (212) 790-4055 

Fax Number (212) 790-4058 

Supervises most national banks headquartered in Connecticut, Delaware, 

District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New 

Jersey, New York, Pennsylvania, Puerto Rico, Rhode Island, Vermont, and the 

Virgin Islands. 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

73 of a National Bank
Southeastern

Licensing Manager 

Marquis One Tower, Suite 600 

245 Peachtree Center Ave., N.E. 

Atlanta, Georgia 30303-1223 

Telephone (404) 588-4525 

Fax Number (404) 588-4544 

Supervises most national banks headquartered in Alabama, Florida, Georgia, 

Mississippi, North Carolina, South Carolina, Tennessee, Virginia, and West 

Virginia. 

Central

Licensing Manager 

One Financial Place, Suite 2700 

440 South LaSalle Street 

Chicago, Illinois 60605-1073 

Telephone (312) 360-8851 

Fax Number (312) 435-0951 

Supervises most national banks headquartered in Illinois, Indiana, Kentucky, 

Michigan, Ohio, and Wisconsin. 

Midwestern

Licensing Manager 

2345 Grand Boulevard, Suite 700 

Kansas City, Missouri 64108-2637 

Telephone (816) 556-1860 

Fax Number (816) 556-1892 

Supervises most national banks headquartered in Iowa, Kansas, Minnesota, 

Missouri, Nebraska, North Dakota, and South Dakota. 

Southwestern

Licensing Manager 

500 North Akard Street, Suite 1600 

Dallas, Texas 75201-3342 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 74 
Telephone (214) 720-7052 

Fax Number (214) 720-7068 

Supervises most national banks headquartered in Arkansas, Louisiana, 

Oklahoma, and Texas. 

Western

Licensing Manager 

50 Fremont Street, Suite 3900 

San Francisco, California 94105-2292 

Telephone (415) 545-5916 

Fax Number (415) 442-5315 

Supervises most national banks headquartered in Alaska, Arizona, California, 

Colorado, Guam, Hawaii, Idaho, Montana, Nevada, New Mexico, Northern 

Mariana Islands, Oregon, Washington, Wyoming, and Utah. 

District Community Affairs Officers (DCAOs) 

Washington Office

District Community Affairs Director 

Telephone (202) 874-4851 

Fax Number (202) 874-5566 

Has responsibility for facilitating partnerships; providing technical assistance 

for banks and their community partners; and encouraging investment, 

lending, and services to low- and moderate-income persons and small 

businesses. The DCAOs provide training and advice to national banks, 

communities, and bank examiners on best practices, options for satisfying 

CRA responsibilities, and how to expand access to credit and capital. 

DCAOs

Northeastern District

John Farrell (617) 424-4994 fax (617) 424-4992 

Denise Kirk-Murray (212) 790-4054 fax (212) 790-4098 

Southeastern District

Karol Klim (404) 588-4515 fax (404) 588-4532 

Nancy Gresham-Jones (404) 588-4515 fax (404) 588-4532 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

75 of a National Bank
Central District

Paul Ginger (312) 360-8876 fax (312) 435-0951 

Midwestern District

Annette Lepique (816) 556-1832 fax (816) 556-1892 

Southwestern District

David Lewis (214) 720-7027 fax (214) 720-7017 

David Miller (214) 720-7067 fax (214) 720-7017 

Western District

Julia Brown (415) 545-5956 fax (415) 545-5974 

Susan Howard (818) 240-9192 fax (818) 240-9690 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 76 
A Guide to Tribal Ownership 

of a National Bank Appendix G

OCC Publications

OCC publications that you may find useful are listed in this Appendix. To 

request an order form and list of publications, contact the OCC’s 

Communications Division at (202) 874-4700 or visit the OCC’s Web site at 

http://www.occ.treas.gov. 

Comptroller’s Licensing Manual (all booklets listed) 

Introduction 

General Policies and Procedures 

Background Investigations 

Corporate Organization 

Public Involvement 

Charters 

Conversions 

Federal Branches and Agencies 

Branches and Relocations 

Business Combinations 

Failure Acquisitions 

Fiduciary Powers 

Investment in Subsidiaries and Equities 

Branch Closings 

Capital and Dividends 

Change in Bank Control 

Changes in Directors and Senior Executive Officers 

Changes of Corporate Title and Address 

Comments to Other Agencies 

Director Waivers 

Investment in Bank Premises 

Management Interlocks 

Subordinated Debt 

Termination of National Bank Status 

Companion Publications 

The Internet and the National Bank Charter 

A Guide to the National Banking System 

A Guide to Tribal Ownership of a National Bank 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

77 of a National Bank
Comptroller’s Handbook 

Supervision booklets (selected booklets listed) 

Bank Supervision Process 

Community Bank Supervision 

Insider Activities 

Internal and External Audits 

Internal Control 

Large Bank Supervision 

Litigation and Other Legal Matters 

Management Information Systems 

Compliance booklets (selected booklets listed) 

Bank Secrecy Act/Anti-Money Laundering 

Community Bank Consumer Compliance 

Community Reinvestment Act Examination Procedures 

Compliance Management System 

Fair Lending Examination Procedures 

Overview [of Compliance booklets] 

Asset Management booklets

Asset Management 

Community Bank Fiduciary Activities Supervision 

Conflicts of Interest 

Custody Services 

Investment Management Services 

Other OCC Publications

“Activities Permissible for A National Bank” on the OCC’s Web site, which is 

updated periodically. 

A Guide to Mortgage Lending in Indian Country, Comptroller of the 

Currency, July 1997. 

“Banking in Indian Country – Challenges and Opportunities,” Community 

Developments, Fall 2001. 

Community Development (CD) Banks, October 2001 Memorandum to 

Prospective Community Development Bank Organizing Groups. (See 

Appendix D.) 

Community Development Finance: Tools and Techniques for National Banks, 

Comptroller of the Currency, December 1996. 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 78 
“Community Development Financial Institutions and CD Banks – Natural 

Partners for Traditional Lenders,” Community Developments, Summer 2002. 

CDFI and CD Bank Web Resource Directory available at 

http://www.occ.treas.gov/cdd/cdresourcedir.htm. 

The Director’s Book: The Role of the National Bank Director, Comptroller of 

the Currency, March 1997. 

Native American Banking Resource Directory available at 

http://ww.occ.treas.gov/cdd/nativeam.htm. 

Policy Statement on Minority-Owned National Banks, March 2001. (See 

Appendix E). 

Providing Financial Services to Native Americans in Indian Country,

Comptroller of the Currency, July 1997. 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

79 of a National Bank
A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 80 
A Guide to Tribal Ownership 

of a National Bank Appendix H

Resource Contacts

Office of Tribal Justice

Department of Justice 

Room 5634 Main Justice Building 

950 Pennsylvania Avenue, N.W. 

Washington, DC 20530-0001 

(202) 514-8812 

Web site: http://www.usdoj.gov/otj/index.html 

Federal Programs

Federal Housing Finance Board

Affordable Housing and Community Investment Programs 

1777 F Street, N.W. 

Washington, DC 20006 

(202) 408-2537 

Web site: http://www.fhfb.gov 

Department of Agriculture

Rural Development

1400 Independence Avenue, S.W. 

Washington, DC 20250 

(202) 720-4323 

Web site: http://www.rurdev.usda.gov 

Department of Commerce 

Economic Development Administration

14th Street and Constitution Avenue, N.W., Room 7804 

Washington, DC 20230 

(202) 482-5081 

Web site: http://www.doc.gov/eda 

Department of Housing and Urban Development

451 Seventh Street, S.W. 

Washington, DC 20410 

(202) 708-1420 

Web site: http://www.hud.gov 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

81 of a National Bank
Department of the Interior 

Bureau of Indian Affairs 

1849 C Street N.W. 

Washington, DC 20240 

(202) 208-5116 

Web site: http://www.doi.gov/bureau-indian-affairs.html 

Department of Treasury 

Community Development Financial Institutions Fund

601 Thirteenth Street, N.W., Suite 200 South 

Washington, DC 20005 

(202) 622-8662

Web site: http://www.cdfifund.gov 

Department of Treasury 

Financial Management Service

Cash Management Policy and Planning 

401 - 14th Street, S.W., Room 420 

Washington, DC 20227 

(202) 874-6590

Web site: http://www.treas.gov/fms/cashmanagement/index.html 

Department of Treasury 

Financial Crimes Enforcement Network (FINCEN) 

2070 Chain Bridge Road 

Vienna, Virginia 22181 

(703) 905-3591

Web site: http://www.treas.gov/fincen 

Internal Revenue Service 

Federal Low Income Housing Tax Credits

11601 Roosevelt Blvd. 

(ATTN: DP8235-607) 

Philadelphia, Pennsylvania 19255 

(215) 516-4113 

Web site: http://www.irs.gov 

Small Business Administration

Information Office, Office of Advocacy 

409 Third Street, S.W. 

Washington, DC 20416 

(202) 205-6531 

Web site: http://www.sba.gov 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 82 
Department of Veterans Affairs

Veterans Benefits Administration 

810 Vermont Avenue, N.W. 

Washington, DC 20420 

(202) 273-7481 

Web site: http://www.vba.va.gov 

National Housing Intermediaries 

Corporation for Supportive Housing 

50 Broadway, 17th Floor 

New York, NewYork 10004 

(212) 986-2966 

Web site: http://www.csh.org

The Enterprise Foundation 

American City Building 

10227 Wincopin Circle, Suite 500 

Columbia, Maryland 21044-3400 

(410) 964-1230 

Web site: http://www.enterprisefoundation.org 

Family Housing Fund 

801 Nicollet Mall, Suite 1840 

Minneapolis, Minnesota 55402 

(612) 375-9644 

Web site: http://www.fhfund.org 

Housing Assistance Council

1025 Vermont Avenue, N.W. 

Washington, DC 20005 

(202) 842-8600 

Web site: http://www.ruralhome.org 

Local Initiatives Support Corporation

1825 K Street, N.W., Suite 1100 

Washington, DC 20006 

(202) 785-2908 

Web site: http://www.liscnet.org 

National Association of Affordable Housing Lenders 

2121 K Street, NW, Suite 700 

Washington, DC 20037 

(202) 293-9850 

Web site: http://www.ffhsj.com/fairlending/naahl.htm 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

83 of a National Bank
Neighborhood Reinvestment Corporation

1325 G Street, N.W., Suite 800 

Washington, DC 20005 

(202) 220-2300 

Web site: http://www.nw.org/network/home.asp 

Secondary Market Resources

Fannie Mae

3900 Wisconsin Avenue, N.W. 

Washington, DC 20016 

(202) 752-7000 

Web site: http://www.fanniemae.com 

Federal Agricultural Mortgage Corporation (Farmer Mac)

1133 21st Street, N.W., Suite 600 

Washington, DC 20036 

(800) 879-3276 

Web site: http://www.farmermac.com/plane/frames.htm 

Federal Home Loan Mortgage Corporation (Freddie Mac)

8200 Jones Branch Drive 

McLean, Virginia 22102 

(703) 903-4000 

Web site: http://www.freddiemac.com 

Government National Mortgage Association (Ginnie Mae)

Department of Housing and Urban Development 

451 Seventh Street, S.W. 

Washington, DC 20410 

(202) 708-0926 

Web site: http://www.ginniemae.gov 

Federal Financial Regulators — Community Affairs Contacts

Office of the Comptroller of the Currency 

Anna Alvarez Boyd, Deputy Comptroller, Community Affairs 

250 E Street, S.W. 

Washington, DC 20219-0001 

(202) 874-5864 

Web site: http://www.occ.treas.gov 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 84 
Board of Governors, Federal Reserve System

Sandra Braunstein, Assistant Director and Community Affairs Officer 

20th and Constitution Avenue, N.W. 

Washington, DC 20551 

(202) 452-3378 

Web site: http://www.bog.frb.fed.us 

Federal Deposit Insurance Corporation 

George French, Deputy Director for Supervision and Consumer Protection 

550 17th Street, N.W. 

Washington, DC 20429 

(202) 898-3929 

Web site: http://www.fdic.gov 

Federal Housing Finance Board

Stephen Hudak, Director of Communications 

1777 F Street, N.W. 

Washington, DC 20006 

(202) 408-2807 

Web site: http://www.fhfb.gov 

National Credit Union Administration

Anthony LaCreta, Director, Office of Community Development Credit Unions 

1775 Duke Street 

Alexandria, Virginia 22314-3428 

(703) 518-6610 

Web site: http://www.ncua.gov 

Office of Thrift Supervision

U.S. Department of Treasury 

Sonja White, National Community Affairs Liaison 

1700 G Street, N.W. 

Washington, DC 20552 

(202) 906-7857 

Web site: http://www.ots.gov 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

85 of a National Bank
A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 86 
A Guide to Tribal Ownership 

of a National Bank Glossary

Glossary of Terms

Acting in concert means knowingly participating in a joint activity or parallel 

action toward a common goal of acquiring control, whether or not pursuant 

to an express agreement. It also can mean combining voting or other interests 

for a common purpose in any contract, understanding, relationship, 

agreement, or other arrangement whether or not written. 

An applicant is a person or entity that submits a notice or application to the 

OCC. 

An application is a submission requesting prior OCC approval to engage in 

various corporate activities or transactions (also see notice definition). 

A community development corporation (CDC) is a corporation established 

by one or more insured financial institutions, or by insured financial 

institutions and other investors, to make one or more investments that meet 

the public welfare investment requirements of 12 CFR 24.2(c). 

A certified community development entity is an organization that is certified 

by the CDFI Fund as being eligible to receive tax credits under the New 

Markets Tax Credits program. 

A community development financial institution (CDFI) is a financial 

institution that specializes in serving underserved communities and the 

people who live there. CDFIs include community development banks, credit 

unions, loan funds, microenterprise loan funds, venture capital funds, and 

multibank CDCs. 

A community development project (CD Project) is a project to make an 

investment that meets the public welfare investment requirements of 12 CFR 

24.2(d). 

A corporate filing or filing is either an application or a notice. 

The Community Reinvestment Act regulations establish the framework and 

criteria by which the federal financial regulators assess a financial institution’s 

record of helping to meet the credit needs of the financial institution’s 

community (12 CFR 25). 

A depository institution is a financial institution that accepts deposits. 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

87 of a National Bank
A filer is a person, group of persons, national bank, state-chartered bank, 

thrift, other financial institution, or any other entity that submits a corporate 

filing to the OCC. 

Holding company means any company that controls or proposes to control a 

national bank regardless of whether it is a bank holding company under 12 

USC 1841(a)(1). 

An incomplete filing is not fully responsive to each item of information 

included in a sample notice or application or lacks adequate information, 

when considered together with other available information, for the OCC to 

make its decision. 

An Indian or Native American, for most governmental and jurisdictional 

purposes, is a person (a) of Indian descent and (b) an enrolled member of a 

federally recognized Indian tribe. Those terms are used interchangeably in 

this guide. 

Indian country is defined by Congress as land inside the boundaries of Indian 

reservations, communities made up mainly of Indians, and Indian trust and 

restricted land.1

An Indian tribe is a “domestic dependent nation”2

 with governmental 

authority over its members and its territory. It has a unique legal and 

government-to-government relationship with the United States that is reflected 

in the United States Constitution, treaties, statutes, and court decisions. 

Under federal law, the Secretary of the Interior maintains a list of Indian tribes 

that are recognized by the United States as governments.3

An insider is a proposed organizer, director, principal shareholder, or 

executive officer of a proposed or existing national bank and includes any 

related interest of such a person. 

An insider contract is any financial or other business, voting, or ownership 

agreement, arrangement, or transaction, direct or indirect, oral or written, 

between any insider and the proposed bank. 

An institution-affiliated party (IAP)4

 may include: 

1

18 USC 1151. 

2

Cherokee Nation v. Georgia, 30 U.S. (5 Pet.) 1, 17 (1831). 

3

”Indian Entities Recognized and Eligible to Receive Services from the United States Bureau of Indian 

Affairs,” 67 Fed. Reg. 46,328 (July 12, 2002). 

4

12 USC 1813(u). 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 88 
• A director, officer, employee, or controlling shareholder of an insured 

depository institution. 

• A person who has filed or is required to file a change in bank control 

notice under 12 USC 1817(j). 

• Any shareholder, consultant, joint venture partner, or other person, 

who participates in the conduct of the affairs of an insured depository 

institution. 

• Any independent contractor who knowingly or recklessly participates 

in any violation of a law or regulation, any breach of fiduciary duty, or 

any unsafe or unsound practice, which caused or is likely to cause 

more than a minimal financial loss to, or a significant adverse effect on, 

the insured depository institution. 

An interim bank is a non-operational bank chartered solely to merge or 

consolidate into another bank owned by the same party. 

A loan pool is formed when two or more financial institutions simultaneously 

agree to commit a fixed dollar amount of loans or loan participations for a 

particular community development purpose or geographical target area. 

Often, each individual institution originates loans by using borrower 

eligibility criteria and loan rates, terms, and conditions agreed to by all bank 

participants. In some cases, one institution serves as the lender of record and 

other banks agree to purchase participations in each loan made under the 

program. In other instances, borrowers seeking financing from the pool will 

be referred to lenders on a revolving basis, so that each bank takes a turn 

originating loans. Often, local development agencies receive the loan 

requests and may provide loan packaging assistance. 

For the Minority Bank Deposit Program (MBDP), the term minority control

applies when minority persons own or control more than 50 percent of the 

outstanding voting stock of a financial institution. 

A minority depository institution is a depository institution with more than 

50 percent of the ownership or control held by one or more minority 

individuals, and more than 50 percent of the net profit or loss of which 

accrues to minority individuals. The term “minority” means any Black 

American, Native American, Hispanic American, or Asian American (12 USC 

1823(f)(12)(B)). 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

89 of a National Bank
Money laundering is the movement of criminally derived funds to conceal 

the true source, ownership, or use of the funds. 

A multibank lending corporation is a corporate structure that originates 

community development loans on behalf of members or stockholders. 

Although many variations in structure exist, participating financial institutions 

typically may provide: 

• Direct loans to businesses or projects in which the loans are prepackaged by the corporation. 

• Revolving lines of credit to the corporation that are drawn down as 

loans made by the corporation. 

• Purchase of participations in loans originated by the corporation. 

Usually, professional staff manages these entities with bankers serving on the 

board of directors and on the loan review committee. 

A notice is a submission notifying the OCC that a filer: (1) intends to engage 

in certain corporate activities or transactions; or, (2) has begun certain 

corporate activities or transactions (see also application definition). 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 90 
A Guide to Tribal Ownership 

of a National Bank References

Anti-Money Laundering Provisions 

Laws 18 USC 1956, 1957 

31 USC 5311 et seq. 

Regulation 31 CFR 103 

Appeals Process

Regulation 12 CFR 5.13(f) 

OCC Issuance OCC 96-18

Bank Enterprise Act 

Law 12 USC 1834a 

Regulation 12 CFR 1806

Bank Holding Company Act

Law 12 USC 1841 et seq. 

Bank Merger Act

Law 12 USC 1828(c) 

Regulation 12 CFR 5.33 

Bank Secrecy Act

Law 31 USC 5311 et seq. 

Regulations 31 CFR 103 

 12 CFR 21.21 

Branches

Law 12 USC 36 

Regulation 12 CFR 5.30 

Change in Bank Control Act

Law 12 USC 1817(j) 

Regulation 12 CFR 5.50 

Community Development Financial Institutions

Law 12 USC 4701 et seq. 

Regulation 12 CFR 1805 

Community Development Investments

Law 12 USC 24(11) 

Regulation 12 CFR 24 

Comptroller’s Licensing Manual A Guide to Tribal Ownership 

91 of a National Bank
Community Reinvestment Act

Law 12 USC 2901 et seq. 

Regulation 12 CFR 25 

Corporate Decisions

Laws 12 USC 93a, 1818(b), 

1831o(e)(4) 

Regulation 12 CFR 5.13 

Corporate Definitions

Regulation 12 CFR 5.3 

Equal Credit Opportunity Act

Law 15 USC 1691 et seq. 

Regulation 12 CFR 202 

Fair Housing Act

Law 42 USC 3601 et seq. 

Regulation 24 CFR 100 

Federal Deposit Insurance Act

Law 12 USC 1811 et seq. 

Federal Reserve Act

Law 12 USC 221 et seq. 

Filing Fees

Regulation 12 CFR 5.5 

Hearings and Other Meetings

Regulation 12 CFR 5.11 

Interstate Branching

Law 12 USC 36 

Regulation 12 CFR 5.30 

Loans to Insiders

Regulations 12 CFR 31, 215 

Misrepresentations or Omissions

Law 18 USC 1001 

National Bank Act

Law 12 USC 1 et seq. 

A Guide to Tribal Ownership Comptroller’s Licensing Manual 

of a National Bank 92 
Comptroller’s Licensing Manual A Guide to Tribal Ownership 

93 of a National Bank

Public Comment

Regulation 12 CFR 5.10 

Public File Availability

Regulation 12 CFR 5.9 

Publication Requirement

Regulation 12 CFR 5.8 

Restrictions on Transactions with Affiliates

Laws 12 USC 371c (Section 23A), 

371c-1 (Section 23B) 

Regulation 12 CFR 31, various provisions 

in 12 CFR part 250 

Securities

Regulations 12 CFR 11, 16 

Small Business Investment Companies (SBICs)

Law 15 USC 681 et seq. 

Tribal Relationships 

Presidential memorandum dated April 29, 1994, for the heads of 

executive departments and agencies, “Government-to-Government 

Relations with Native American Tribal Governments,” 59 Fed. Reg. 

22,951 (May 4, 1994). 

Executive Order No. 13175 on ”Consultation and Coordination with 

Indian Tribal Governments,” 65 Fed. Reg. 67,249 (November 9, 2000).