OCC Adopts New Regulatory Framework For OREO Activities

The OCC adopted a final rule that will (i) streamline regulations for national banks and (ii) update the regulatory framework for federal savings associations on "other real estate owned" ("OREO") activities. The final rule will become effective on December 1, 2019.

As previously described, OREO activities by federal savings associations are guided by capital regulations and handbooks issued by the Office of Thrift Supervision ("OTS"). Pursuant to the final rule, the OCC will:

• revise the definition of "debts previously contracted" real estate to "refer to leased real estate";

• modify the definition of "former banking premises" to include a reference to OCC Rule 7.1000(a)(2), which allows national banks and federal savings associations to own real estate for use in their own banking activities;