§ 159.4What activities are preapproved for service corporations?
This section sets forth the activities that have been preapproved for service corporations. Section 159.3(e)(2) of this part sets forth the procedures for engaging in a broader scope of activities on a case-by-case basis. You should read these two sections together to determine whether you must file a notice with the OCC under § 159.11 of this part, or whether you must file an application under part 116 of this chapter and receive prior written OCC approval for your service corporation to engage in a particular activity. The notice or application should be filed with the appropriate OCC licensing office. To the extent permitted by § 159.3(e)(2) of this part, a service corporation may engage in the following activities:
(a) Any activity that all Federal savings associations may conduct directly, except taking deposits.
(b) Business and professional services. The following services are preapproved for service corporations only when they are limited to financial documents or financial clients or are generally finance-related:
(1) Accounting or internal audit;
(2) Advertising, marketing research and other marketing;
(6) Data processing;
(7) Data storage facilities operation and related services;
(8) Office supplies, furniture, and equipment purchasing and distribution;
(9) Personnel benefit program development or administration;
(10) Printing and selling forms that require Magnetic Ink Character Recognition (MICR) encoding;
(11) Relocation of personnel;
(12) Research studies and surveys;
(13) Software development and systems integration; and
(14) Remote service unit operation, leasing, ownership or establishment.
(c) Credit-related activities.
(2) Acquiring and leasing personal property;
(4) Collection agency;
(5) Credit analysis;
(6) Check or credit card guaranty and verification;
(7) Escrow agent or trustee (under deeds of trust, including executing and deliverance of conveyances, reconveyances and transfers of title); and
(8) Loan inspection.
(d) Consumer services.
(1) Financial advice or consulting;
(2) Foreign currency exchange;
(3) Home ownership counseling;
(4) Income tax return preparation;
(5) Postal services;
(6) Stored value instrument sales;
(7) Welfare benefit distribution;
(8) Check printing and related services; and
(9) Remote service unit operation, leasing, ownership, or establishment.
(e) Real estate related services.
(1) Acquiring real estate for prompt development or subdivision, for construction of improvements, for resale or leasing to others for such construction, or for use as manufactured home sites, in accordance with a prudent program of property development;
(2) Acquiring improved real estate or manufactured homes to be held for rental or resale, for remodeling, renovating, or demolishing and rebuilding for sale or rental, or to be used for offices and related facilities of a stockholder of the service corporation;
(f) Securities activities, liquidity management, and coins.
(1) Execution of transactions in securities on an agency or riskless principal basis solely upon the order and for the account of customers or the provision of investment advice. The service corporation must register with the Securities and Exchange Commission and state securities regulators, as required by applicable Federal and state law and regulations;
(2) Liquidity management;
(3) Issuing notes, bonds, debentures, or other obligations or securities;
(4) Purchase or sale of coins issued by the U.S. Treasury.
(g)Investments. (1) Tax-exempt bonds used to finance residential real property for family units;
(2) Tax-exempt obligations of public housing agencies used to finance housing projects with rental assistance subsidies;
(3) Small business investment companies and new markets venture capital companies licensed by the U.S. Small Business Administration;
(4) Rural business investment companies; and
(5) Investing in savings accounts of an investing thrift.
(h) Community development and charitable activities:
(1) Investments in governmentally insured, guaranteed, subsidized or otherwise sponsored programs for housing, small farms, or businesses that are local in character;
(2) Investments designed primarily to promote the public welfare, including the welfare of low- and moderate-income communities or families (such as providing housing, services, or jobs);
(3) Investments in low-income housing tax credit and new markets tax credit projects and entities authorized by statute (e.g., community development financial institutions) to promote community, inner city, and community development purposes; and
(4) Establishing a corporation that is recognized by the Internal Revenue Service as organized for charitable purposes under 26 U.S.C. 501(c)(3) of the Internal Revenue Code and making a reasonable contribution to capitalize it, provided that the corporation engages exclusively in activities designed to promote the well-being of communities in which the owners of the service corporation operate.
(i) Activities conducted on behalf of a customer on an other than “as principal” basis.
(j) Activities reasonably incident to those listed in paragraphs (a) through (i) of this section if the service corporation engages in those activities.
Title 12 published on 2014-01-01
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