Branch Closings Booklet

Office of the
Comptroller of the Currency
Washington, DC 20219

COMPTROLLER’S LICENSING MANUAL

Branch Closings

June 2017

Contents
Introduction ............................................................................................................................. 1
Key Policies .............................................................................................................................. 2
Branch Closing Notice Requirements................................................................................... 2
Applicability of Branch Closing Requirements .................................................................... 4
Requirements Applicable to Interstate National Banks ........................................................ 6
Branch Closure Policy .......................................................................................................... 7
Community Reinvestment Act.............................................................................................. 7
Summary of Requirements .................................................................................................... 8
Procedures ............................................................................................................................. 10
Filing Branch Closing Notices ............................................................................................ 10
Glossary ................................................................................................................................. 11
References .............................................................................................................................. 13

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Introduction
This Comptroller’s Licensing Manual booklet, “Branch Closings,” contains a discussion of
key policies and requirements for filings and customer notices pertaining to closings of
national bank and federal savings association (FSA) branches. In this booklet, national banks
and FSAs are collectively referred to as banks, unless otherwise noted. The booklet includes
a glossary of terms and a reference section.
Section 42 of the Federal Deposit Insurance Act (section 42), 12 USC 1831r-1, requires
insured depository institutions to submit advance notice of any proposed branch closing to
the institution’s primary federal regulator. Advance notification to the Office of the
Comptroller of the Currency (OCC) and bank customers must follow specific timing and
content requirements. The OCC is the primary regulator of national banks and FSAs. Section
42 requires insured banks to notify customers of a proposed closing by mail and by posting
notice at the branch location to be closed. Section 42 contains additional notice requirements
and provisions concerning an interstate bank proposing to close a branch in a low- or
moderate-income area. The section 42 interstate bank notice requirements and provisions do
not apply to an FSA. Section 42 also requires that insured banks adopt policies for branch
closings.
Section 42 does not provide authority for the primary regulator to prohibit the closing of a
branch. The notice requirement under section 42 assists the OCC in assessing a bank’s record
of opening and closing branches. The OCC reviews this record in conjunction with its
examination for compliance with section 42 and in assessing performance under the
Community Reinvestment Act (CRA).
The OCC, the Board of Governors of the Federal Reserve System, and the Federal Deposit
Insurance Corporation (FDIC) adopted a “Joint Policy Statement on Branch Closing Notices
and Policies” (Joint Policy Statement) in June 1999 1 to provide guidance regarding the
requirements of the branch closing statute.

1

64 FR 34944, June 29, 1999.

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Key Policies
Branch Closing Notice Requirements
Notice to the OCC
A bank that plans to close a branch office must notify the OCC. OCC notification is
generally a two-step process. The first step is a 90-day advance notice sent to the appropriate
OCC licensing office. The second step is a final branch closing notice sent to the appropriate
OCC licensing office indicating the effective closing date.

Advance Closing Notice
A 90-day advance branch closing notice must be filed with the OCC in the following cases:
•
•

•

A branch closes in the normal course of business.
A branch closes as a result of a merger or other form of acquisition, such as a purchase
and assumption, and no exception applies. While either bank may provide the required
notice to customers, if the branch closes before consummation of the merger, the selling
bank generally notifies its regulator. If the branch closes after consummation of the
merger, the purchaser typically notifies its regulator.
A branch relocates 2 outside of its immediate neighborhood.

An advance branch closing notice is not required when a branch is sold to another institution
and the branch will continue to operate at the same location under the new owner.
A bank’s 90-day advance notice to the OCC should include all of the information contained
in the sample Advance Branch Closing Notice. This information includes the following
items:
•
•
•
•
•

Identification of the branch to be closed (popular name, address, county, and OCCassigned branch number).
The proposed closing date.
A detailed statement of the reasons for closing the branch.
Statistical or other information that supports the reasons for closing the branch consistent
with the bank’s written policies on branch closings.
Confirmation that the required advance notice to customers has been or will be made.

In addition, the bank should include a copy of the 90-day advance notice that has been or will
be provided to customers.

2

Relocation of a branch may require a separate application to the OCC. Refer to 12 CFR 5.30 (national banks)
and 5.31 (FSAs). Refer to the Comptroller’s Licensing Manual booklet, “Branches and Relocations.”

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Final Branch Closing Notice to the OCC
Immediately after the branch closes, the bank must submit a Final Branch Closing Notice to
the appropriate OCC licensing office. The final notice should
•
•
•

list the branch popular name, address, county, and OCC-assigned branch number.
specify the date of the closing.
for branches subject to the advance notice of branch closing requirements, include a
statement that the bank provided the statutory 90-day advance notice of branch closing to
its customers.

A final branch closing notice to the OCC is not required when the branch relocates outside of
the immediate neighborhood and will continue to operate at a new location, but a 90-day
advance notice of the closing is required. While a final branch closing notice is not required,
the bank should notify the OCC of the effective relocation date.
A bank should notify the OCC of the effective date of the sale when the bank sells a branch
to an institution not regulated by the OCC. The notice of the effective date of the sale permits
the OCC to update its records of the selling institution’s branches.

Notice to Customers
Unless an exception to the notice of branch closing requirements applies, a bank must
provide affected customers notice by mail at least 90 days before the proposed branch
closing. The notice may be included in the account statement mailing or sent in a separate
mailing. In addition, the bank shall post the notice to branch customers in a conspicuous
manner on the premises of the branch proposed to be closed at least 30 days before the
proposed closing. In the case of a mobile branch or messenger service branch, the notice
must be posted in a conspicuous place on the unit or vehicle. The notice shall remain posted
on the branch premises until the branch closes.
The mailed notice to customers should contain
•
•
•

the location of the branch proposed to be closed.
the proposed date of closing.
information on where customers may obtain banking services following the closing date,
or a telephone number or website address for customers to contact to determine alternate
location(s) of services.

A bank is expected to develop a reasonable method of allocating customers to specific
branches, such as a location where a deposit or loan account was opened or through use. The
OCC recognizes, however, that a reasonable method of allocation may result in certain
facilities that technically constitute branches not being assigned customers. In such cases, a
notice to the OCC that the branch will close and a posting of the notice on the branch
premises suffices. The OCC does not require that a bank change its record-keeping system to
make a reasonable determination of who is a customer of a branch.
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If customers are assigned to a mobile branch or messenger service branch (collectively,
mobile branch), normal customer notification requirements apply. If no customers are
assigned to the mobile branch, then posting a notice on the mobile branch suffices.

Applicability of Branch Closing Requirements
Section 42 applies to the closing of a branch by an insured depository institution. The Joint
Policy Statement defines a branch as a traditional brick-and-mortar branch, or any similar
banking facility other than a main office, at which deposits are received, checks paid, or
money lent.

Facilities Not Covered
Closings of the following non-branch facilities are not covered by branch closing notice
requirements:
•
•
•
•
•
•
•
•
•
•
•

Automated teller machines (ATM)
Main or home offices
Temporary branches 3
Remote service facilities
Night depositories
Trust offices
Loan or deposit production offices
Administrative offices
Data-processing offices
Electronic facilities
FSA agency offices

Certain Relocations and Consolidations Not Covered
The branch closing provisions of section 42 do not apply when
•

3

one or more branches relocate, within the immediate neighborhood of the branch, and
this action does not substantially affect the nature of the business or the customers
served. 4 Consolidations of branches are considered relocations for the purposes of
section 42 if the branches are located within the same neighborhood and the nature of the
business or customer served is not affected.

National banks should refer to 12 CFR 5.30(d)(6).

4

The Joint Policy Statement provides that “relocations generally will be found to occur only when short
distances are involved.” “Short distance” is defined in 12 CFR 5.3(l) as (1) within a 1,000-foot radius of the
current location of the branch if it is located within the principal city of a metropolitan statistical area (MSA);
(2) within a one-mile radius of the current location of the branch if the branch is not located within a principal
city, but is within an MSA; or (3) within a two-mile radius of the branch if it is not located in an MSA.

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•
•

a branch closes in connection with an emergency acquisition or any assistance provided
by the FDIC. 5
a bank acquires a branch of a failed institution per agreement with the FDIC and transfers
the branch back to the FDIC pursuant to the terms of the agreement within 180 days of
the acquisition.

Interruption of Services
Branch closing requirements do not apply when a bank ceases operations at a branch due to
events beyond the bank’s control, if the bank intends to restore branching services at the
same location in a timely manner. Events beyond the bank’s control generally include natural
catastrophes, such as a fire or flood. If the bank decides not to reopen the branch following
the incident, the bank must provide customer and regulatory notice as soon as possible after
the decision is made not to reopen the branch. A bank is not required to notify the OCC of a
closing caused by a temporary interruption of service, but it would normally be sound
practice to do so. Under certain circumstances, such as during emergencies, a bank may
establish branches under expedited procedures. For further information on emergency
branches, contact the appropriate OCC licensing office or refer to the “Branches and
Relocations” booklet of the Comptroller’s Licensing Manual.

Reduction of Services
A bank may alter the operations conducted at a branch without being subject to the branch
closing requirements, provided that the facility remains a branch. For example, the branch’s
hours of operation may be reduced, certain functions or services previously provided at that
location may be eliminated, or a national bank branch may be downgraded to a night
depository. Nevertheless, a bank should consider providing appropriate advance notice of
service changes to customers as a good business practice even when statutory branch closing
requirements are not applicable.

Mobile Branch/Messenger Service Operations
A mobile branch or messenger service branch is subject to the branch closing notice
requirements if
•
•

5

it will cease conducting branching transactions in the geographic area for which it was
approved, or
changes in services constitute a branch downgrade subject to branch closing requirements
(e.g., a staffed mobile branch is replaced by a mobile remote service unit).

Refer to 12 USC 1821(n) and 1823(c), (f), and (k).

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Termination of Lease
A bank with a leased branch location may be informed by the location’s owner that the lease
will be terminated or not renewed. The loss of a lease arrangement does not exempt the bank
from the branch closing notice requirements. The OCC does not waive or shorten the
requirements. To provide the bank with sufficient time to comply with the 90-day notice
provision of 12 USC 1831r-1, lease agreements should incorporate adequate safeguards, such
as a 120-day advance notice provision for termination or nonrenewal.

Requirements Applicable to Interstate National Banks
For branch closing purposes, a national bank with branches in more than one state is an
interstate bank. 6 Additional notice requirements apply to an interstate national bank
proposing to close a branch located in a low- or moderate-income area. 7 In addition to the
standard notice requirements, the notice to customers and the notice placed on the branch
premises must also contain
•
•

the mailing address of the appropriate OCC licensing office.
a statement indicating that comments on the branch closing may be mailed to that office.

The Joint Policy Statement recommends the notice state that the OCC does not have the
authority to approve or prevent the branch closing.

Meetings
When an interstate national bank proposes to close a branch in a low- or moderate-income
area, the law provides a process for convening a meeting. In accordance with
12 USC 1831r-1 and the Joint Policy Statement, the OCC convenes a meeting if all of the
following criteria are met:
•
•
•

The OCC receives a written request relating to the closing of the branch from a person in
the area where the branch is located.
The request includes a statement of specific reasons for the request, including a
discussion of the closing’s adverse effect on the availability of banking services in the
area affected by the branch closing.
The OCC concludes that the request is not frivolous.

When all these criteria are met, the OCC consults with community leaders in the area
affected by the closing and convenes a meeting of OCC representatives; representatives of
other interested depository institution regulatory agencies; community leaders in the affected
area; and other such individuals, organizations, and depository institutions as the agency

6

Refer to 12 USC 1831r-1(d)(4)(A).

7

Refer to the glossary of this booklet.

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deems appropriate. The meeting’s purpose is to explore the feasibility of obtaining adequate
alternate services for the affected area following the closing of the branch.

Federal Savings Associations
The section 42 additional notice and process requirements for interstate banks closing
branches in low- or moderate-income areas do not apply to an FSA. FSAs must follow the
standard customer and regulatory notice requirements.

Branch Closing Policy
Banks with one or more branches must adopt written policies for branch closings. The Joint
Policy Statement provides guidance for banks developing branch closing policies and
recommends that policies meet the size and needs of the bank. During the normal supervisory
process, the OCC determines whether a bank has adopted a branch closing policy.

Community Reinvestment Act
In its evaluation of a bank’s performance under the CRA and the assignment of CRA ratings,
the OCC
•
•
•

reviews a bank’s record of opening and closing offices.
evaluates the effect of those openings and closings on the affected communities.
considers comments received on branch closings.

The OCC considers CRA performance when acting on applications by a bank to merge with
another institution, establish a new branch, or relocate a branch or a main or home office.

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Summary of Requirements
Tables 1 and 2 illustrate the specific branch closing notice requirements to the OCC for
various closings. In addition to any branch closing notice requirement, a relocation of a
branch may also require an additional or separate application or notice.
Table 1: Notice Requirements for National Banks

National banks

Advance branch
closing notice

Brick-and-mortar branch closing

Yes

Yes

Branch downgrade to ATM

Yes

Yes

No

Yes

Mobile branch closing

Yes

Yes

Messenger service closing

Yes

Yes

Intermittent branch

Yes

Yes

Branch consolidation

No

Yes

Short-distance relocation

No

No

Yes

No

Relocation or closing of a main officea

No

No

Trust office closing

No

No

Closing of a temporary branch

No

Yes

ATM closing

No

No

Emergency acquisitions/FDIC assistanceb

No

Yes

Loan production/deposit production office
closing

No

No

Remote service unit closing

No

No

Branch is sold to an institution not supervised
by the OCC, but the branch continues to
operate at the same location

No

Yes

Night depository closing

Relocation (not short distance)

a

Final branch
closing notice

Refer to 12 CFR 5.40 for application or notice requirements.

b

Applies only to branches transferred back to the FDIC pursuant to a failed bank acquisition agreement if closed within the
180-day “put-back” period. Branch closings after the “put-back” period must follow branch closing procedures.

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Table 2: Notice Requirements for FSAs

FSAs

Advance branch
closing notice

Brick-and-mortar branch closing

Yes

Yes

Branch downgrade to ATM

Yes

Yes

No

No

Mobile branch closing

Yes

Yes

Branch consolidation

No

Yes

Short-distance relocation

No

No

Yes

No

Relocation or closing of a home officea

No

No

Closing of a temporary branch

No

Yes

ATM closing

No

No

Agency office closing

No

No

Emergency acquisitions/FDIC assistanceb

No

Yes

Remote service unit closing

No

No

Branch is sold to an institution not supervised
by the OCC, but the branch continues to
operate at the same location

No

Yes

Night depository closing

Relocation (not short distance)

a

Final branch
closing notice

Refer to 12 CFR 5.40 for application or notice requirements.

b

Applies only to branches transferred back to the FDIC pursuant to a failed bank acquisition agreement if closed within the
180-day “put back” period. Branch closings after the “put-back” period must follow branch closing requirements.

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Procedures
Filing Branch Closing Notices
1. Refer as needed to this booklet and the “General Policies and Procedures” booklet of the
Comptroller’s Licensing Manual for guidance on filing required branch closing notices.
2. Send an advance branch closing notice that contains the required information to the
appropriate OCC licensing office at least 90 days before the closing date (see the sample
Advance Branch Closing Notice).
3. Notify customers of the proposed branch closing date by mailing notices containing the
required information at least 90 days before the closing date (see the sample Customer
Notice of Branch Closing). In addition, a copy of the notice sent to customers must be
sent to the appropriate OCC licensing office.
4. Post a notice of the branch closing conspicuously on the premises of the branch to be
closed at least 30 days before the closing date (see the sample Customer Notice of Branch
Closing).
5. Send a final branch closing notice to the appropriate OCC licensing office immediately
after the branch closes, as appropriate (see the sample Final Branch Closing Notice).

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Glossary
Advance branch closing notice: A bank’s written notice to the OCC and the bank’s
customers, at least 90 days in advance of a branch closing, required by 12 USC 1831r-1.
With limited exceptions, this notice is required of each insured institution when it intends to
close a branch.
Agency office: An FSA office established or maintained to conduct any of the following
activities:
•
•
•
•

Servicing, originating, or approving loans and contracts.
Managing or selling real estate owned by the FSA.
Conducting fiduciary activities or ancillary activities.
Other activities approved by the OCC for an agency office, except for payments on
savings accounts.

Agency offices of FSAs are not branches.
Branch: For the purposes of applying 12 USC 1831r-1, a traditional brick-and-mortar branch
or any similar facility, other than the bank’s main or home office, at which deposits are
received, checks paid, or money lent. Main or home offices, remote service units, ATMs,
loan or deposit production offices, and temporary branches are not branches for purposes of
12 USC 1831r-1 and do not require the advance branch closing notice.
Branch consolidation: Generally occurs when one or more branches close, and the
customers of the closed branch are served by other existing branches of the bank. For the
purposes of determining whether an advance branch closing notice is given, a branch
consolidation is defined as a combination of branches located within the same neighborhood
that does not affect substantially the nature of the business or customers served. Branch
consolidations occurring where the affected branches are located within the short-distance
definition in 12 CFR 5.3(l) do not require advance branch closing notices.
Branch downgrade: Reduction in the services provided at a branch that results in the
location no longer being a branch. This situation includes, for example, conversion of a fullservice branch to a remote service unit. Branch closing procedures apply because branch
services are no longer provided at the location.
Final branch closing notice: A bank submission to the OCC that communicates a branch
closing date.
Low- or moderate-income area: As provided in 12 USC 1831r-1, a census tract for which
the median family income is either (1) less than 80 percent of the median family income for
the metropolitan statistical area (MSA) in which the census tract is located; or (2) for a
census tract not located in an MSA, less than 80 percent of the median family income for the

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state in which the census tract is located, as determined without taking into account family
income in MSAs in that state.
Mobile branch: A facility, other than a messenger service, that does not have a single,
permanent site and includes a vehicle that travels to public locations for the conduct of
branching transactions.
Night depository: A secure drop box or unit where bank customers may place cash or
checks for bank personnel to retrieve and deposit later. The night depository may be attached
to or integrated with an office of the bank, such as the main office or a branch.
Principal city: As defined in 12 CFR 5.3(k), the city or cities identified as a “principal city”
in the relevant MSA in which the relocating office is located. 8
Short-distance relocation: A relocation of a branch or main office within (1) a 1,000-foot
radius of the site if the branch or main office is located within a principal city of an MSA; (2)
a one-mile radius of the site if located within an MSA but not within a principal city; or (3) a
two-mile radius of the site if not located within an MSA.

8

The Office of Management and Budget’s lists of metropolitan statistical areas and principal cities can be found
at Metropolitan and Micropolitan.

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References
In this section, “NB” denotes that the referenced law, regulation, or issuance applies to
national banks, and “FSA” denotes the reference applies to federal savings associations.
Branches
Law
Regulation
Branch Closings
Law

12 USC 36 (NB), 12 USC 1464(m), 1464(r) (FSA)
12 CFR 5.30 (NB), 12 CFR 5.31 (FSA)

12 USC 1831r-1 (NB and FSA)

Community Reinvestment Act of 1977
Law
12 USC 2901 et seq. (NB and FSA)
Regulation
12 CFR 25 (NB), 12 CFR 195 (FSA)

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