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OCC Bank Fiduciary Powers

A national bank may exercise fiduciary powers in any state without obtaining a state money transmitter license (subject to the limits established by 12 U.S.C. § 92a and 12 C.F.R. part 9), the Office of the Comptroller of the Currency (OCC) said in an interpretive letter (No. 1167) posted in late May.  

The letter comes in response to a request for clarification as to whether a bank, whose fiduciary powers are derived from and governed by the National Bank Act and OCC regulations, is required to obtain a state money transmitter license or exemption in order to exercise its fiduciary capacity. 

The OCC noted that while a national bank’s fiduciary capacities are determined by reference to state law, 12 U.S.C. § 92a “imposes no geographic limits on where a national bank with fiduciary powers may act in a fiduciary capacity.” In fact, OCC regulations expressly permit a national bank authorized to act in a fiduciary capacity to do so in any state. 

In addition, according to the OCC, 12 U.S.C. § 92a “does not limit where a national bank may market its fiduciary activities, where its fiduciary customers may be located, or where the property being administered may be located.” 

According to the letter, the OCC concluded that:

  1. A national bank may conduct federally authorized judiciary activities in any state, even if aspects of its activities fall within the state’s definition of money transmission and the bank is not licensed by the state as a money transmitter;
  2. state laws purporting to impose licensing requirements on a national bank’s exercise of fiduciary powers are preempted; and 
  3. satisfaction of an exemption from those requirements is not required. 

The letter, however, notes: “This conclusion is based on the facts and circumstances as represented in the Request Letter. Different facts and circumstances or consideration of different laws and regulations could result in a different conclusion.”

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