National Bank Director Waivers

COMPTROLLER’S LICENSING MANUAL

NATIONAL BANK
DIRECTOR
WAIVERS
DECEMBER 2021

Introduction
This booklet of the Comptroller’s Licensing Manual provides guidance concerning the
licensing procedures of the Office of the Comptroller of the Currency (OCC) relating to
citizenship and residency requirements for a national bank. The requirements referred to in
this guidance document reflect provisions in existing statutes and regulations. The relevant
statutes and regulations are listed at the end of this booklet or referenced as applicable
throughout the document.1
This booklet summarizes the OCC’s citizenship and residency requirements for members of a
national bank’s board of directors, and the criteria and process for requesting waivers of
these requirements for an individual or group of individuals. This booklet is not applicable to
federal savings associations (FSA), 2 including covered savings associations (CSA), because
directors of FSAs are not subject to citizenship or residency requirements.
Interested parties also should review 12 USC 72, “Qualifications,” before submitting a
request for a citizenship and/or residency waiver. Honorary and advisory directors are not
required to be U.S. citizens or to meet residency requirements. 3
This booklet should be used together with other related booklets of the Comptroller’s
Licensing Manual. Users should refer to the “Background Investigations” booklet for
additional instructions and procedures.
For information about filing licensing applications or notices, refer to the “General Policies
and Procedures” booklet of the Comptroller’s Licensing Manual.

This booklet also may include procedures that banks must follow in connection with the filing of applications
and notices with the OCC. Such procedures are not substantive rules that establish decision criteria. Rather, they
are steps a bank must take to allow the OCC to assess whether a bank has met the substantive requirements for
the application or notice in existing statutes and regulations. Consistent with the Administrative Procedure Act,
the OCC may issue guidance concerning licensing that contains binding procedural steps a bank must take to
allow the OCC to assess a bank’s application or notice. See 5 USC 553(b)(A).
1

A CSA retains its FSA charter and continues to be treated as an FSA for purposes of governance, including
incorporation, bylaws, board of directors, shareholders, mutual members, and distribution of dividends. See 12
USC 1464a(d)(1); 12 CFR 101.4(a)(2)(i); OCC Bulletin 2019-31, “Covered Savings Associations
Implementation: Covered Savings Associations,” and attached “Frequently Asked Questions,” question 5; 84
Fed. Reg. 23991 (May 24, 2019).

2

A national bank may appoint honorary or advisory members of a board of directors to act in advisory
capacities without voting power or power of final decision in matters concerning the business of the bank. Any
listing of honorary or advisory directors must distinguish between them and the bank’s board of directors or
indicate their advisory status. Refer to 12 CFR 7.2004.
3

Comptroller’s Licensing Manual

1

National Bank Director Waivers

Key Policies
Citizenship Waivers
Each national bank director must be a citizen of the United States throughout their term of
service. 4 The OCC, however, may waive this requirement for a minority of the total number
of directors of any national bank. The OCC grants citizenship waivers on an individual basis,
and a waiver is valid until the individual no longer serves on the board or the OCC revokes
the waiver. 5 The bank should submit a citizenship waiver request to the OCC before
appointing a noncitizen as a director. If the OCC has granted a citizenship waiver and the
composition of the bank’s board subsequently changes so that more than a minority of the
directors are noncitizens, the bank must restructure its board to bring it back into compliance.
The OCC normally conducts background checks using biographical information provided for
each proposed director who is not a U.S. citizen to obtain information on the competence,
experience, and integrity of each person named in the waiver request. The background
checks also independently verify the accuracy and completeness of the information
submitted. The specific policies and procedures required in performing background checks
are given in the “Background Investigations” booklet of the Comptroller’s Licensing
Manual.

Residency Waivers
A majority of a national bank’s directors must reside in the state where the bank is located
(that is, the state(s) in which the bank has its main office or branches) or within 100 miles of
its main office for at least one year immediately preceding each director’s election and during
their continuance in office.6 The OCC has discretion to waive these residency requirements.
The OCC may grant a waiver on an individual basis or for any number of director positions.
The waiver is valid until the OCC revokes the waiver, or, if granted on an individual basis,
the individual no longer serves on the board.7
When the composition of the bank’s board changes because of resignations, an increase in
the number of directors, or the relocation or replacement of one or more directors, and if a
majority of the resulting board of directors does not meet the residency requirements, then
the bank needs to request a residency waiver from the OCC or further restructure its board.
The bank should request a residency waiver before the proposed change. If the change results
from an unexpected resignation, however, the bank should request the residency waiver from
the OCC as soon as possible after the event.
4

Refer to 12 USC 72.

5

Refer to 12 CFR 5.43(c)(2) and 12 CFR 5.43(d).

6

Refer to 12 USC 72.

7

Refer to 12 CFR 5.43(c)(1) and 12 CFR 5.43(d).

Comptroller’s Licensing Manual

2

National Bank Director Waivers

The bank may request a multiple residency waiver in which the OCC waives the residency
requirement for a majority or all the board of directors. Certain banks may find that a
multiple residency waiver promotes the safety and soundness of their operations without
introducing the inefficient maintenance of an expanded board to meet statutory requirements
or imposing the regulatory burden of applying for residency waivers each time a director is
changed or added to the board.
If the OCC approves a multiple residency waiver for a majority or all of the directors, the
bank may continue to appoint directors who do not meet the residency requirement without
applying for individual residency waivers, as long as appointments do not result in a greater
proportion or number, as applicable, of nonresident directors than noted in the original
approval received by the bank.8 Under this residency waiver, the bank must review the
qualifications of the nominated directors to ensure compliance with the requirements of 12
USC 72 regarding citizenship and stock ownership.
If the bank is not well managed, or not well capitalized, OCC licensing staff perform
background checks for residency waivers. 9 In addition, the OCC may in certain other
instances determine that background checks are required for residency waivers.

Other Considerations
Applicants may contact the OCC to clarify any questions or concerns before filing a waiver
request. Requests to waive a portion or all the background investigations in connection with a
citizenship or residency waiver request are reviewed on a case-by-case basis.
Citizenship and residency waivers are not mutually exclusive. There are situations when both
waivers are required for the same individual to address the applicable legal requirements.
The president of a national bank, or the person performing the functions of the president,
regardless of title, is required to be on the bank’s board consistent with 12 USC 76. 10
Citizenship and residency waiver requests for the president of a national bank are reviewed
on a case-by-case basis, and the OCC considers the impact of granting such a waiver on the
safe and sound operation of the bank.
The OCC may revoke a residency or citizenship waiver that it had previously approved.
Before revocation, the OCC will provide written notice to the national bank and affected
director(s) of its intention to revoke a residency or citizenship waiver and the basis for its
intention. The bank and affected director(s) may respond in writing to the OCC within 10
calendar days, unless the OCC determines that a shorter period is appropriate in light of
If a bank has received a multiple residency waiver for the bank’s entire board, individual residency waivers
are not required for new nonresident director appointments.

8

If a bank is required to submit prior notice of changes in directors or senior executive officers pursuant to 12
CFR 5.51, licensing staff typically is able to rely on the background check conducted as part of that process.

9

10

Refer to 12 CFR 7.2012.

Comptroller’s Licensing Manual

3

National Bank Director Waivers

relevant circumstances. The OCC will consider the written responses of the bank and
affected director(s), if any, prior to deciding whether to revoke a residency or citizenship
waiver.
A director or national bank, or both, may seek review by appealing the OCC’s decision to
revoke a residency or citizenship waiver to the Comptroller, or an authorized delegate, within
15 days of the receipt of the OCC’s written decision to revoke. The director or national bank,
or both, may appeal on the grounds that the reasons for revocation are contrary to fact or
arbitrary and capricious. The appellant must submit all documents and written arguments that
the appellant wishes to be considered in support of the appeal.
The OCC’s decision to revoke a residency or citizenship waiver is effective: (i) If the director
or national bank, or both, appeals, upon the director's receipt of the decision of the
Comptroller, an authorized delegate, or the appellate official, to uphold the initial decision to
revoke the residency or citizenship waiver; or (ii) If neither the director nor national bank
appeals, upon the expiration of the period to appeal.

Application Process
Citizenship Waivers
A bank’s request for a waiver of the U.S. citizenship requirement must be filed with the
appropriate OCC licensing office (see Citizenship Waiver Request).
The waiver request must
•
•
•
•

include a discussion of the proposed director’s specific qualifications and experience, and
how the proposed director will carry out their duties effectively to ensure that the bank is
meeting its services, business plan goals, or market services.
provide biographical information for the proposed director using the Interagency
Biographical and Financial Report form. The financial information section of this form is
typically not required.
provide the number of both U.S. and non-U.S. citizen directors, including the proposed
director.
certify that the filing is authorized and the information in the application has been
examined carefully and is true, correct, and complete as of the date of submission.

The OCC reviews the request to determine that
•
•
•

all required information is provided.
a waiver would not violate applicable laws, regulations, and rulings.
the experience and ability of the proposed non-U.S. citizen director
− are relevant to the bank and the type of services it provides.
− would support, through reputation and integrity, the safety and soundness of the bank.

Comptroller’s Licensing Manual

4

National Bank Director Waivers

The OCC usually decides requests for citizenship waivers within 30 days from the receipt
date. The request generally is denied if the OCC discovers material misrepresentations or
omissions by the proposed director.

Residency Waivers
A bank’s request for a waiver of the residency requirement must be filed with the appropriate
OCC Licensing office (see Residency Waiver Request). The waiver request must
•

•

•
•

include a discussion of the proposed director’s specific qualifications and experience,
how the proposed director will carry out their duties effectively to ensure that the bank is
meeting its operating goals, and how the waiver will support the safe and sound operation
of the bank.
indicate the number of directors who, if the request is approved, have resided in the
state(s), territory, or district where the bank has its main office or branches, or within 100
miles of the bank’s main office, for at least one year immediately preceding their election
and will continue to so reside, and the number of directors who will not meet these
requirements.
provide biographical information on the proposed director using the Interagency
Biographical and Financial Report form. The financial information section of this form is
typically not required.
certify that the filing is authorized and the information in the application has been
examined carefully and is true, correct, and complete as of the date of submission.

The OCC reviews the request to determine that
•
•
•
•

all required information is provided.
a waiver would not violate applicable laws, regulations, or rulings.
the experience and ability of the proposed director are relevant to the bank and the type of
services it intends to provide.
approval of the residency waiver will support the safety and soundness of the bank.

The OCC usually decides requests for residency waivers within 30 days from the receipt
date. The request generally is denied if the OCC discovers material misrepresentations or
omissions by the proposed director.

Comptroller’s Licensing Manual

5

National Bank Director Waivers

References
Law
Regulation

Comptroller’s Licensing Manual

12 USC 72, 76, and 93a
12 CFR 5.43 and 7.2012

6

National Bank Director Waivers

Table of Updates Since Publication
Date of Last Publication: April 2017
Reason

Affected pages

Revisions made to reflect updates to 12 CFR 5.

Various

Comptroller’s Licensing Manual

7

National Bank Director Waivers