The OCC issued a final rule (the “Final Rule”) that extends its lending limits rule’s temporary exception for credit exposures arising from a derivative transaction or securities financing transaction from January 1, 2013 to July 1, 2013.
Section 610 of the Dodd-Frank Act revised the statutory definition of loans and extensions of credit for purposes of the OCC’s lending limits to include certain credit exposures arising from derivative transactions, repurchase agreements, reverse repurchase agreements, securities lending transactions and securities borrowing transactions. The OCC issued an interim final rule (the “Interim Rule”) on June 21, 2012 to amend the OCC’s lending limits regulation, 12 C.F.R. Part 32, and implement Section 610 of the Dodd-Frank Act. The OCC’s Interim Rule was described in the June 26, 2012 Financial Services Alert. The Interim Rule included a temporary exception from the lending limit rule until January 1, 2013 for extensions of credit arising from derivative transactions or securities financing transactions. The Final Rule extends this temporary exception to July 1, 2013 to allow banks more time to develop internal models and to comply with the modified lending limits requirements.