Traditionally, the Office of the Comptroller of the Currency (OCC) did not require a national bank seeking to engage in non-depository, trust-only activities (a “trust-only bank”) to obtain Federal Deposit Insurance Corporation (FDIC) insurance as a prerequisite to granting it a charter. Recently, however, the OCC changed its position; today, a trust-only bank must obtain FDIC insurance in order to be granted a charter. This change in policy, which is designed to ensure that the OCC is not forced to act as receiver for a failed trust-only bank, impacts the available options for entities that seek to charter a trust-only bank, particularly due to its interplay with provisions of the Dodd-Frank Act.
The rationale underlying the OCC’s change in policy is grounded in the responsibilities that would fall to the OCC if a trust-only bank without FDIC insurance failed. In such a situation, the OCC would be forced to act as receiver of the failed trust-only bank. But the position of the Comptroller of the Currency sworn into office in 2012, Thomas J. Curry, is that the OCC is not structured to act as a receiver. By requiring FDIC insurance for trust-only banks, the OCC ensured that it will not be forced to act as a receiver. That role will fall to the FDIC, an organization that is better structured to serve as receiver of failed banks.