§ 7.3001. Sharing national bank or Federal association space and employees.

611 words·~3 min read·/us/cfr/t12/s§ 7.3001·

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(a)Sharing space. A national bank or Federal savings association may:

(1)Consistent with § 7.1024, lease excess space on national bank or Federal savings association premises to one or more other businesses (including other financial institutions);

(2)Share space jointly held with one or more other businesses; or

(3)Offer its services in space owned by or leased to other businesses.

(b)Sharing employees. When sharing space with other businesses as described in paragraph

(a)of this section, a national bank or Federal savings association may provide, under one or more written agreements between the national bank or Federal savings association, the other businesses, and their employees, that:

(1)A national bank or Federal savings association employee may act as agent for the other business; or

(2)An employee of the other business may act as agent for the national bank or Federal savings association.

(c)Supervisory conditions. When a national bank or Federal savings association engages in arrangements of the types listed in paragraphs

(a)and

(b)of this section, the national bank or Federal savings association must ensure that:

(1)The other business is conspicuously, accurately, and separately identified;

(2)Shared employees clearly and fully disclose the nature of their agency relationship to customers of the national bank or Federal savings association and of the other businesses so that customers will know the identity of the national bank, Federal savings association, or other business that is providing the product or service;

(3)The arrangement does not constitute a joint venture or partnership with the other business under applicable State law;

(4)All aspects of the relationship between the national bank or Federal savings association and the other business are conducted at arm's length, unless a special arrangement is warranted because the other business is a subsidiary of the national bank or Federal savings association;

(5)Security issues arising from the activities of the other business on the premises are addressed;

(6)The activities of the other business do not adversely affect the safety and soundness of the national bank or Federal savings association;

(7)The shared employees or the entity for which they perform services are duly licensed or meet qualification requirements of applicable statutes and regulations pertaining to agents or employees of such other business; and

(8)The assets and records of the parties are segregated.

(d)Other legal requirements. When entering into arrangements of the types described in paragraphs

(a)and

(b)of this section, and in conducting operations pursuant to those arrangements, a national bank or Federal savings association must ensure that each arrangement complies with all applicable laws and regulations. If the arrangement involves an affiliate or a shareholder, director, officer or employee of the national bank or Federal savings association:

(1)The national bank or Federal savings association must ensure compliance with all applicable statutory and regulatory provisions governing national bank or Federal savings association transactions with these persons or entities;

(2)The parties must comply with all applicable fiduciary duties; and

(3)The parties, if they are in competition with each other, must consider limitations, if any, imposed by applicable antitrust laws.

(e)Transition. If, on May 18, 2015, a Federal savings association shares space or employees with another business under an agreement that complies with the legal requirements that were in effect prior to May 18, 2015, but which would violate any provision of this section, the Federal savings association may continue sharing under the existing agreement but it may not amend, renew, or extend the agreement without prior approval of the appropriate OCC supervisory office. [80 FR 28471, May 18, 2015, as amended at 85 FR 83737, Dec. 22, 2020]

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§ 7.3001

Sharing national bank or Federal association space and employees.

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