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Interpretations and Actions: September 2005

Vol. 18, No. 9

Interpretive Letters

Letter No. Topic
1037 Letter concludes that trust company may use cash-settled derivatives linked to S&P 500 Index to hedge the market risk associated with the fees it charges customers as part of its investment advisory activities, provided the trust company establishes to the satisfaction of its supervisory office, an appropriate risk management and compliance process. 08/09/2005
1038 A national bank (Bank), under contract with the General Services Administration, provides purchasing, travel, and fleet charge cards to government agencies and employees as a payment tool for official government purchases and travel expenses. This letter responds to a request from the Bank for an opinion the appropriate capital treatment for unused portions of lines of credit (unused lines) on cards issued to Federal employees. Liability for all charges and fees incurred on government credit cards rests solely with the cardholder; the government bears no secondary liability. In the letter, we conclude that the OCC will use its reservation of authority in 12 C.F.R. ยง 3.4 to assign a zero percent conversion factor to the unused lines. This reflects our conclusion that a zero percent conversion factor more appropriately reflects the credit risk to the Bank associated with the lines. 08/16/2005
1039 Letter concludes that the Bank may engage in customer-drive, perfectly matched, cash-settled derivative transactions provided the Bank's examiner-in-charge is satisfied that the Bank has adequate risk management and measurement systems and controls to conduct the activities on a safe and sound basis. 09/13/2005
1040 Letter states that the Bank, with the approval of its examiner-in-charge, may engage in customer-driven, physically settled emissions derivative transactions and may enter into physical transactions in emission allowances to hedge its risk exposures to the emissions derivative transactions. 09/15/2005

Corporate Decisions

Letter No. Topic
2005-12 Application by Wells Fargo Bank, National Association, Sioux Falls, South Dakota, to purchase the assets and assume the liabilities of four Randall County, Texas branches of PlainsCapital Bank, Houston, Texas. (Control Number 2005 ML 02 0001), 08/25/2005

Approvals with Conditions Enforceable under 12 U.S.C. 1818

Letter No. Topic
700 Application to charter a new national bank with the title of "Noble Bank & Trust, N.A.", Anniston, Alabama. (Control Number 2005 SO 01 0008), 08/02/2005
701 Application to convert Alabama Banker's Bank, Birmingham, Alabama to a national bank with the title of "Alabama Banker's Bank, National Association". (Control Number 2005 SO 01 0015), 08/04/2005
702 Application to establish a new national bank with the title of "Oakstar Bank, National Association", Springfield, Missouri. (Control Number 2005 WE 01 004), 08/24/2005
703 Proposal by Treasury Bank, National Association, Alexandria, Virginia, to make a material non-cash contribution to capital surplus. (Control Number 2005 WE 12 0227), 08/29/2005

Final Enforcement Actions

Enclosed is a copy of the OCC's news release number 2005-91, announcing the availability of enforcement actions. Copies of the final actions are available by writing to the OCC, Public Information Room, Mail Stop 1-5, Washington, D.C. 20219. When ordering, specify the appropriate enforcement action number.

Community Reinvestment Act (CRA) Performance Evaluations

Enclosed is a list of CRA performance evaluations that became public during the period of August 15, 2005 through September 14.

PLEASE NOTE: Interpretive Letters and No-Objection Letters reflect the views of the Comptroller's legal staff. Corporate Decisions, CRA Decisions and Conditional Approvals are from the office of Licensing. The Community Development Investment Letters are from the office of Community Affairs. The list of CRA Ratings is from the Communications Division. For copies of the CRA evaluations, you may either contact the bank directly, or you may write to the Office of the Comptroller of the Currency (OCC) in any of three ways: by mail to the OCC, Attn: Public Information Room, Mail Stop 1-5, Washington, D.C. 20219; by fax to (202) 874-4448; or by e-mail to You may also write to the OCC for copies of enforcement actions and charters with standard conditions.

Members of the news media are encouraged to cite the letter number when reporting or summarizing documents from this package. This helps us to process single requests based upon your citation in a timelier manner.

The Office of the Comptroller of the Currency publishes INTERPRETATIONS AND ACTIONS monthly. Subscriptions are available at a rate of $175 per year by writing to the Comptroller of the Currency, ATTN: Accounts Receivable, Mail Stop 4-8, 250 E Street, S.W., Washington, DC 20219. Prepayment is requested. Suggestions, comments or questions may be sent to Jacqueline J. England, Comptroller of the Currency, Communications Division, Mail Stop 3-2, Washington, DC 20219.