The proposal covers metal, including alloy, primarily suited to industrial or commercial uses, such as copper cathodes and aluminum T-bars. If finalized, the proposal would supersede a prior OCC determination permitting national banks to trade copper cathodes, according to an OCC news release.
“The proposed rule describes certain instances in which buying and selling industrial or commercial metal is permitted because it is not dealing or investing,” the OCC wrote in its Notice of Proposed Rulemaking. “For example, national banks and FSAs may acquire metal through foreclosures on loans and then sell the metal to mitigate loan losses.”
The proposed rule carries out an OCC recommendation included in its report to Congress and the Financial Stability Oversight Council under section 620 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The section required federal banking agencies to conduct a study of the activities and investments that banking entities may engage in under state and federal law and to consider the associated risks and how banking entities mitigate those risks, according to the release.
In its rulemaking notice, OCC wrote it expects the rule will have minimal or no impact on community banks because they generally do not deal or invest in industrial or commercial metals.
Comments on the proposal are due 60 days from date of publication in the Federal Register.
To learn more about the proposed rule, read http://www.occ.gov/news-issuances/news-releases/2016/nr-occ-2016-108a.pdf.