On June 20, the Office of the Comptroller of the Currency (“OCC”) issued interim final rules (including both the interim final rule and the preamble, the “Lending Limit Release”) to implement Section 610 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). Section 610 expands the statutory definition of “loans and extensions of credit” in the lending limit provisions of the National Bank Act [1] and Home Owners’ Loan Act [2] to include the credit exposure from repurchase and reverse repurchase transactions and securities lending and borrowing transactions (collectively, “securities financing transactions”) and derivative transactions. [3] The Lending Limit Release sets out the procedures and methodologies for calculating the credit exposure for these newly covered transactions. The Lending Limit Release also establishes a single set of lending limit rules applicable to both national banks and federal and state-chartered savings associations. The lending limit rules are effective July 21, 2012, with an exemption until January 1, 2013 for credit exposures from derivatives and securities financing transactions.

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