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Dreher Tomkies LLP
Attorneys at Law
2750 Huntington Center
41 South High Street
Columbus, Ohio 43215
Telephone: 614-628-8000
Fax: 614-628-1600

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The Office of the Comptroller of the Currency (“OCC”) has instituted a new conditional preliminary approval mechanism for an application to establish a new national bank (a so-called “shelf charter”). This type of conditional preliminary approval is designed to facilitate new equity investments in troubled depository institutions and participation in Federal Deposit Insurance Corporation (“FDIC”) auctions for troubled and failing financial institutions by allowing persons not currently affiliated with a bank to “pre-qualify” for bank ownership and so qualify to bid on troubled and failing institutions.

Normal charter approval requires a specific business plan. A shelf charter, however, can be obtained based upon a simplified business plan, and shelf charter approval can remain “inactive” for up to 18 months. In granting shelf charters, the OCC will evaluate the qualifications of the proposed management team and the sources and amount of capital to be made available in the ordinary course and will accept a streamlined business plan setting forth the parameters of the proposed operations and the obligations of the organizing group. A more detailed plan must be submitted when (and if) the investor group selects a specific institution target for acquisition.

The availability of the shelf charter significantly expands the potential pool of eligible buyers available to participate in the bidding process for troubled financial institutions.

Please do not hesitate to contact us for assistance or advice on obtaining a shelf charter.

  • Michael Tomkies