Articles of Association, Charter, and Bylaw Amendments Booklet

COMPTROLLER’S LICENSING MANUAL

ARTICLES OF
ASSOCIATION,
CHARTER, AND
BYLAW AMENDMENTS
FEBRUARY 2022

Contents
Introduction..................................................................................................................... 1
Key Policies...................................................................................................................... 2
Notice/Application Process .............................................................................................. 3
National Banks .............................................................................................................. 3
Articles of Association Amendments .......................................................................... 3
Bylaw Amendments................................................................................................... 4
Federal Savings Associations ......................................................................................... 4
Information Filed With the OCC................................................................................. 4
Charter Amendments.................................................................................................. 5
Preapproved Charter or Charter Amendments.............................................................. 6
Charter Amendment Application................................................................................. 6
Charter Amendment Notice........................................................................................ 7
Bylaw Amendments................................................................................................... 8
Preapproved Bylaws or Bylaw Amendments............................................................... 8
Bylaw Amendment Application.................................................................................. 8
Optional Bylaw Amendments..................................................................................... 9
Covered Savings Associations...................................................................................... 10
Specific Requirements ................................................................................................... 10
National Banks ............................................................................................................ 10
Corporate Governance Provisions............................................................................. 10
Anti-Takeover Provisions......................................................................................... 11
Federal Savings Associations ....................................................................................... 11
Corporate Governance Election and Notice Procedures.............................................. 11
Anti-Takeover Provisions......................................................................................... 12
Annual Meeting and Fiscal Year End Closing Date: Bylaw Considerations................ 13
Existing Federal Savings Associations ...................................................................... 13
Appendix: Legal Requirements ..................................................................................... 14
Glossary......................................................................................................................... 18
References...................................................................................................................... 20
Table of Updates Since Publication ............................................................................... 23

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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) for applications
and notices relating to articles of association, charter, and bylaw amendments. The decision
criteria and other 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

When a national bank or federal savings association (FSA) (collectively, banks) is chartered,
or a financial institution converts to a national bank or FSA from another form of charter, the
shareholders or members of the institution approve the national bank’s articles of association
or the FSA’s charter. These documents establish the basic framework for the bank’s
corporate existence and outline the general legal parameters the bank must follow, which
may vary from bank to bank but must always be in conformance with applicable law. The
OCC reviews these corporate documents when processing the charter or conversion
application.
A bank’s board of directors approves the bank’s bylaws, which define certain corporate
governance procedures the bank will follow. For mutual FSAs and stock FSAs, members and
shareholders, respectively, may also approve or amend bylaws. Covered savings associations
(CSA) must comply with the rules applicable to FSAs.
This booklet of the Comptroller’s Licensing Manual provides the OCC’s policies and
procedures regarding articles of association amendments for national banks, charter
amendments for FSAs, and bylaw amendments for both national banks and FSAs.
Refer to other booklets of the Comptroller’s Licensing Manual, as applicable:
•
•
•
•
•

“Branches and Relocations” (regarding main office or home office relocations)
“Changes of Corporate Title and Address”
“Charters”
“Conversions to Federal Charter”
“General Policies and Procedures” (for a discussion of general filing instructions)

This booklet also may include procedures that banks must follow in connection with filing applications and
notices for articles of association, charter, and bylaw amendments. Such procedures are not substantive rules
that establish decision criteria. Rather, they are steps a bank must take in connection with the filing of an
application or notice to allow the OCC to assess whether a bank has met the substantive requirements for the
articles of association, charter, and bylaw amendment 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. Refer to 5 USC
553(b)(A).

1

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Key Policies
A national bank may amend its articles of association consistent with 12 USC 21a, as
outlined in the “Notice/Application Process” section of this booklet.2 The bank may add
additional articles or amendments to the articles of association provided they are not contrary
to law. Amendments to a bank’s articles of association must be filed with the OCC.
Generally, a national bank does not need to seek OCC review or approval for bylaw
amendments, and a bank’s bylaw amendments need not be filed with the OCC. The bank
should ensure that bylaw amendments are legal and consistent with the bank’s articles of
association, as well as with applicable laws and regulations.
An FSA’s charter or bylaws may be amended pursuant to the requirements of
12 CFR 5.21 and 5.22.3 In addition to providing the standards governing charters and bylaws,
12 CFR 5.21 and 5.22 specify the applicable filing requirements and include the permissible
language for the charter and bylaws of mutual and stock FSAs, respectively.

A national bank initially adopts the articles of association at the time of organization. Refer to 12 USC 21 and
12 CFR 5.20(e)(1)(iii)(A).

2

3

An FSA initially adopts the charter and bylaws at the time of organization. Refer to 12 CFR 5.20(e)(1)(iii)(A).

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Notice/Application Process
National Banks
Articles of Association Amendments
A national bank may amend its articles of association if approved by shareholders owning a
majority of the voting shares of the bank, unless a higher percentage is required. 4 A proposed
amendment requiring shareholder approval may be obtained at a duly called shareholders’
meeting. The bank must give shareholders at least 10 days’ prior notice of a meeting by firstclass mail, unless shareholders have waived the right to notice. 5
Amendments to the capital stock section of the articles of association authorizing one or
more classes of preferred stock must be approved by a majority of a bank’s shareholders.6 In
the case of a shareholder vote to approve such amendments, the bank must give shareholders
at least five days’ notice of the shareholder meeting by registered or certified mail. 7
However, two-thirds of the shareholders must approve amendments to the capital stock
article to either increase or decrease the authorized number of common shares of the bank.8
Whenever changes are made in a bank’s articles of association, the bank must send the OCC
the amendment with a corporate resolution certifying shareholder action. The bank should
send the certified copy to the appropriate OCC licensing office for preservation in the
agency’s records. 9
The OCC’s website includes model articles of association that national banks can refer to
when drafting, reviewing, and amending their articles of association. The language in the
model articles is recommended, but not required. The model articles do not address every
situation but have been drafted to incorporate compliance with applicable laws and
regulations.

4

Refer to 12 USC 21a.

Refer to 12 USC 21a. Pursuant to 12 CFR 7.2003, the OCC may waive a shareholder notice if a determination
is made that an emergency exists. A sole shareholder of a bank may waive notice of the shareholder meeting.
The articles, bylaws, or laws applicable to a national bank may require a longer period of notice.
5

6

Refer to 12 USC 51a.

7

Ibid.

8

Refer to 12 USC 57 and 59.

9

Refer to 12 USC 21a.

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Bylaw Amendments
A national bank can amend its bylaws at any regular or special meeting of the board of
directors by a majority vote of the directors. The bylaws and any amendments are generally
not required to be filed with the OCC, 10 and a bank is not required to seek OCC approval of
the bylaws. However, should it come to the OCC’s attention that a bank’s bylaws are
inconsistent with a law, regulation, or the bank’s articles of association, or the bylaws
promote unsafe or unsound operation of the bank, the OCC will consider appropriate
supervisory action to address any concerns.
The OCC’s website includes model bylaws that a bank can use as a reference when drafting,
reviewing, and amending its bylaws. As with the model articles of association, national banks
are not required to use the model bylaws, but they provide well-established guidance.

Federal Savings Associations
The language and content in the charter and bylaws of an FSA must comply with applicable
OCC regulations. 11 An FSA must file either an application or notice with the OCC to amend
its charter or bylaws; however, if an FSA adopts, without change, the OCC’s model or
optional bylaws, no filing is required. Refer to the OCC’s website for a model charter and
bylaws for a mutual FSA, and a model charter and bylaws for a stock FSA.
For amendments that require application filings instead of notices, the OCC notifies the FSA
within 30 days of receipt of the application whether the agency requires additional
information to make a decision. The OCC’s request will note a due date for the FSA’s
response. If the FSA cannot submit the additional information before the requested date, the
FSA should contact the OCC as soon as possible. The OCC can deny the application if the
FSA does not provide the additional information. Refer to 12 CFR 5, subpart A, for
additional rules, policies, and procedures for applications.

Information Filed With the OCC
When submitting an application or notice to the OCC regarding an amendment to the charter
or bylaws, an FSA should provide the following:
•
•
•

Information to demonstrate whether the filing is an application or a notice, and the reason
for that conclusion.
A copy of the proposed charter or bylaw amendment with a second copy marked to show
how the proposed amendment varies from the current charter or bylaws.
A statement or certification that the proposed amendment has been approved by a
majority of the board of directors.

The OCC may review the bylaws when processing applications to charter a de novo national bank or to
convert an existing financial institution to a federal charter.

10

11

Refer to 12 CFR 5.21 for requirements for mutual FSAs and 12 CFR 5.22 for requirements for stock FSAs.

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•
•
•
•

A discussion of the basis or reason for the amendment, including a conclusion of whether
the amendment is consistent with the model charter or bylaws; if it is not, how it is
inconsistent.
A statement on whether the proposed amendment will be or has been approved by the
shareholders or members, and, if applicable, the date of the shareholders’ or members’
meeting.
If requested by the OCC, a legal opinion confirming that the proposed amendment
complies with all laws and regulations.
If a non-preapproved anti-takeover amendment is proposed for an FSA stock charter, the
legal opinion required by 12 CFR 5.22(h) must be provided as to whether the proposed
charter amendment is valid under the applicable state law.

For charter amendments of either a mutual or stock FSA, the OCC requests that the FSA
provide the OCC with sufficient information to verify that (1) the FSA has complied with
applicable requirements for providing notice of the members’ or shareholders’ meeting; (2)
proxy materials provided to the members or shareholders complied with applicable
requirements; and (3) members or shareholders approved the amendment by the required
vote.
Following shareholder or member approval, the FSA must submit a certified copy of the
charter amendment to the OCC. An FSA that amends its charter can request that the OCC
reissue the charter to include all amendments. Such requests for reissuance should be filed
with the appropriate OCC licensing office and contain the required signatures as well as any,
supporting documents needed to demonstrate that the amendments were properly adopted. 12

Charter Amendments
Charter amendments of a mutual FSA must be approved by a majority of the board of
directors 13 and approved by the association’s members at a legal meeting. 14 The FSA must
post a notice of the meeting in each of the FSA’s offices during the 14 days immediately
before the meeting. 15 In addition, the mutual FSA must notify its members of a members’
meeting in one of the following ways:
•
•

Publish notice of the meeting for two successive weeks immediately before the week
when the meeting will be held.
Mail notice of the meeting to each member at least 15 and not more than 45 days before
the meeting. If provided for in the bylaws, a member may waive delivery of the notice.

12

Refer to 12 CFR 5.21(h) for mutual FSAs and 12 CFR 5.22(i) for stock FSAs.

13

Refer to 12 CFR 5.21(f)(1).

14

Refer to 12 CFR 5.21(e), “Charter Form,” section 9, “Amendment of Charter.”

15

Refer to 12 CFR 5.21(j)(2).

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Charter amendments of a stock FSA must be approved by a majority of the board of
directors 16 and approved by a majority of the total voters eligible to vote at a legal meeting of
the FSA’s shareholders, unless a higher vote is otherwise required.17 The stock FSA must
notify its shareholders of a shareholders’ meeting by written notice not fewer than 20 or more
than 50 days before the date of the meeting, either personally or by mail. A stock FSA that is
owned by a single shareholder is not subject to the shareholder notice requirement. 18

Preapproved Charter or Charter Amendments
If an FSA adopts the standard form of charter 19 or any of the optional charter amendments
without change, 20 the charter or charter amendments shall be effective and deemed approved
at the time of adoption if the amendment is filed with the appropriate OCC licensing office
within 30 days after adoption, and the FSA follows the requirements of its charter and
applicable law in adopting such a charter or amendments. Applications for the organization
of a de novo FSA and for an initial FSA charter are subject to the applicable time periods for
such applications.21
The FSA adopting or amending its charter with the standard or optional provisions should
submit the following information to the OCC within the 30-day period after adoption:
•
•
•

The OCC’s “Notice for Charter and Bylaw Amendments.”
A copy of the amendment.
Certification by the FSA evidencing adoption of the proposed amendment by the board of
directors and the date and vote of adoption by the members or stockholders, as
applicable.

Charter Amendment Application
An FSA must file an application with the OCC if the FSA proposes to adopt a charter that
differs from the standard form or any of the optional charter amendments.

16

Refer to 12 CFR 5.22(f)(1).

17

Refer to 12 CFR 5.22(e), “Charter Form,” section 8, “Amendment of Charter.”

18

Refer to 12 CFR 5.22(k)(2).

19

Refer to 12 CFR 5.21(e) for mutual FSAs and 12 CFR 5.22(e) for stock FSAs.

20

Refer to 12 CFR 5.21(g) for mutual FSAs and 12 CFR 5.22(g) for stock FSAs.

21

Refer to 12 CFR 5.20.

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Expedited Review
The charter amendment is deemed approved as of the 30th day after filing, unless the OCC
notifies the FSA that the amendment is denied or not subject to expedited review, provided
the association follows the requirements of its charter in adopting the amendment.

Amendments Not Subject to Expedited Review
An application would be exempt from expedited review if a charter amendment for either a
stock or mutual FSA would render more difficult or discourage:
•
•
•
•
•
•

a merger.
a tender offer (applicable to a stock FSA).
a proxy contest.
the assumption of control by a mutual account holder of a mutual FSA.
the assumption of control by a holder of a block of an FSA’s stock.
the removal of incumbent management.22

An application to the OCC would also be exempt from expedited review if the proposed
amendment involves a significant issue of law or policy.
The OCC generally does not require an FSA to submit a legal opinion with the application
for a charter amendment.23 However, the OCC can request a legal opinion if there are any
concerns about whether a proposed amendment complies with applicable laws or regulations.
The opinion should address the permissibility of the amendment under the laws the FSA has
elected to follow for corporate governance.
If the OCC approves the charter amendment, it must be submitted to the FSA’s members or
shareholders for their approval pursuant to the requirements of the FSA’s charter and
applicable regulations.

Charter Amendment Notice
If a proposed charter amendment does not require an application and the OCC’s prior
approval, and the amendment is permissible under all applicable laws, rules, and
regulations, 24 an FSA must submit the proposed amendment to the appropriate OCC
licensing office within 30 days after adoption.

22

Refer to 12 CFR 5.21(f)(2)(i)(B) for mutual FSAs and 12 CFR 5.22(f)(2)(i)(B) for stock FSAs.

23

A legal opinion is required if the proposed amendment is subject to 12 CFR 5.22(h).

24

Refer to 12 CFR 5.21(f)(2)(ii) for mutual FSAs and 12 CFR 5.22(f)(2)(ii) for stock FSAs.

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Bylaw Amendments
Bylaw amendments of either a mutual or stock FSA must be approved by either a majority
vote of the board of directors or a majority of the votes cast by members or shareholders of
the FSA at a duly called legal meeting.
The required provisions of a mutual FSA’s bylaws are set forth in 12 CFR 5.21(j). The
regulation requires that these bylaws contain provisions that comply with all the requirements
listed in 12 CFR 5.21(j) and that are not otherwise inconsistent with the listed provisions, the
mutual FSA’s charter, and applicable laws and regulations. With the prior approval of the
OCC, however, a mutual FSA may adopt a bylaw provision that is not consistent with the
provisions listed in the applicable regulations.
The required provisions of a stock FSA’s bylaws are set forth in 12 CFR 5.22(j) through (n).
A bylaw provision for a stock FSA that is not consistent with the provisions listed in these
sections can be adopted only with the approval of the OCC.

Preapproved Bylaws or Bylaw Amendments
No filing is required if an FSA proposes to adopt or amend a bylaw provision to conform,
without change, to the model or optional bylaws. Bylaw amendments that do not require an
application shall be effective at the time of adoption, provided the FSA follows the
requirements of its charter and bylaws in adopting such an amendment.25
An application also is not required to adopt or amend bylaws to make a corporate governance
election under 12 CFR 5.21(j)(3)(ii) (for mutual FSAs) or 12 CFR 5.22(j)(2)(ii) (for stock
FSAs). However, the FSA must send a notice with a copy of the bylaws to the OCC within
30 days after adoption. Please refer to the Specific Requirements section of this booklet for
additional information on corporate governance provisions.

Bylaw Amendment Application
A stock or mutual FSA must file an application with the OCC if the proposed amendment is
inconsistent with the language in the OCC’s model or optional bylaws and is not a bylaw
making a corporate governance election.

Expedited Review
The bylaw amendment that is eligible for expedited review is deemed approved as of the
30th day after filing, unless the OCC notifies the FSA that the amendment is denied or is not
subject to expedited review, provided the association follows the requirements of its charter
in adopting the amendment.

25

Refer to 12 CFR 5.21(j)(3)(iii) for mutual FSAs and 12 CFR 5.22(j)(2)(iii) for stock FSAs.

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Amendments Not Subject to Expedited Review
An application would be exempt from expedited review if the bylaw amendment would
render more difficult or discourage:
•
•
•
•
•
•

a merger.
a tender offer (applicable to a stock FSA).
a proxy contest.
the assumption of control by a mutual account holder of a mutual FSA.
the assumption of control by a holder of a block of an FSA’s stock.
the removal of incumbent management.26

An application also would be exempt from expedited review if the proposed amendment
involves a significant issue of law or policy, including indemnification, conflicts of interest,
and limitations on director or officer liability. In addition, an application is exempt from
expedited review if the proposed amendment is inconsistent with the requirements of 12 CFR
5.21(j) (for mutual FSAs) or 12 CFR 5.22(k) through (n) (for stock FSAs); applicable laws,
rules, or regulations; or the FSA’s charter.

Effectiveness
A bylaw amendment that requires an application and OCC approval is effective after
approval by the OCC and adoption by the FSA, provided that the FSA follows the
requirements of its charter and bylaws in adopting the amendment.27

Optional Bylaw Amendments 28
Bylaw Provision on Integrity of Directors
The bylaws for a mutual or stock FSA may include an optional bylaw provision on integrity.
The OCC has approved the following bylaw provision, which shall be effective at the time of
adoption, and requires no filing.
A person is not qualified to serve as a director if the person: (1) is under indictment for, or
has ever been convicted of, a criminal offense involving dishonesty or breach of trust and the
penalty for such offense could be imprisonment for more than one year; or (2) is a person
against whom a banking agency has within the past 10 years issued a cease-and-desist order
for conduct involving dishonesty or breach of trust and that order is final and subject to
appeal; or (3) has been found either by a regulatory agency whose decision is final and not
subject to appeal or by a court to have (i) breached a fiduciary duty involving personal profit
26

Refer to 12 CFR 5.21(f)(2)(i)(B) for mutual FSAs and 12 CFR 5.22(f)(2)(i)(B) for stock FSAs.

27

Refer to 12 CFR 5.21(j)(4) for mutual FSAs and 12 CFR 5.22(j)(3) for stock FSAs.

.

28

Optional bylaws for mutual and stock FSAs are included in the model bylaws on the OCC’s website.

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or (ii) committed a willful violation of any law, rule, or regulation governing banking,
securities, commodities or insurance, or any final cease-and-desist order issued by a banking,
securities, commodities, or insurance regulatory agency.

Bylaw Provision on Indemnification
The bylaws for a mutual or stock FSA may include an optional bylaw provision on
indemnification, provided the provision complies with the requirements of 12 CFR 7.2014,
12 CFR 359, and the Federal Deposit Insurance Act (12 USC 1828(k)). No filing with the
OCC is required to adopt this bylaw provision.

Bylaw Provision on Age Limitations
The bylaws for a mutual or a stock FSA may include an optional bylaw provision on age
limitations, provided the provision complies with all federal laws, rules, and regulations. 29
No filing with the OCC is required to adopt this bylaw provision.

Covered Savings Associations
A CSA has the same rights and privileges as a national bank and is subject to the same
duties, restrictions, penalties, liabilities, conditions, and limitations. However, a CSA retains
its FSA charter and is treated as an FSA for purposes of governance. 30 A CSA must comply
with the charter and bylaw requirements applicable to FSAs.

Specific Requirements
National Banks
Corporate Governance Provisions
The corporate governance provisions in a national bank's articles of association and bylaws
and the bank's conduct of its corporate governance affairs must comply with applicable
federal banking statutes and regulations and safe and sound banking practices.31 A national
bank may elect to follow the corporate governance provisions of the law of any state in
which the main office or any branch of the bank is located, the law of any state in which a
bank’s holding company is located, the Delaware General Corporation Law, or the Model
Business Corporation Act, as amended, to the extent the corporate governance provisions are
not inconsistent with applicable federal banking statutes or regulations, or bank safety and
soundness. If a national bank elects to follow such a body of law for its corporate
Bylaws on age limitations must comply with all federal laws, such as the Age Discrimination in Employment
Act and the Employee Retirement Income Security Act.

29

30

Refer to 12 USC 1464a(d) and 12 CFR 101.4(a)(2).

31

Refer to 12 CFR 7.2000(a).

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governance, then the national bank must designate in its bylaws the body of law selected for
its corporate governance provisions.32 A bank that previously elected to follow the corporate
governance provisions of the law of the state in which its holding company is incorporated
may continue to use those provisions, even after the bank is no longer controlled by that
holding company.33

Anti-Takeover Provisions
The state corporate governance provisions a national bank may elect to follow may include
anti-takeover provisions. Thus, a national bank may adopt anti-takeover provisions included
in state corporate governance law if the provisions are not inconsistent with federal banking
statutes or regulations and not inconsistent with bank safety and soundness.34 The OCC has
determined that several common anti-takeover provisions are generally not inconsistent with
federal banking statutes or regulations.35 However, in some circumstances, their adoption
may be inconsistent with federal banking statutes or regulations or with bank safety and
soundness.36 The OCC determined that two types of common state anti-takeover provisions
are inconsistent with federal banking statutes or regulations because they conflict with
specific provisions in federal law.37 A bank considering electing to follow a state antitakeover provision as a part of its corporate governance should review 12 CFR 7.2001.

Federal Savings Associations
Corporate Governance Election and Notice Procedures
A mutual FSA can elect to follow the corporate governance procedures of the laws of the
state where the FSA’s home office or any branch of the association is located, provided that
they are not inconsistent with applicable federal statutes, regulations, and safety and
soundness, and the procedures do not include anti-takeover provisions or provisions that
involve significant issues of law or policy. If a mutual FSA makes this election, it must
designate in its bylaws the provision or provisions from the body of law selected for its
corporate governance procedures. The bylaws, with the corporate governance election, are
effective upon adoption. The mutual FSA must file a copy of such bylaws with the OCC

32

Refer to 12 CFR 7.2000(b).

33

Refer to 12 CFR 7.2000(c).

34

Refer to 12 CFR 7.2001.

35

Refer to 12 CFR 7.2001(b).

36

Refer to 12 CFR 7.2001(d) and 7.2001(e).

37

Refer to 12 CFR 7.2001(c).

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within 30 days after adoption. The filing must indicate, where not obvious, why the bylaw
provision or provisions meet the requirements for adoption.38
A stock FSA may elect to follow the corporate governance procedures of the laws of the state
where the FSA’s home office or any branch of the association is located; the laws of the state
where the stock FSA’s holding company, if any, is incorporated or chartered; the Delaware
General Corporation Law; or the Model Business Corporation Act. These procedures must
not be inconsistent with applicable federal statutes, regulations, and safety and soundness,
and the procedures must not include anti-takeover provisions or provisions that involve
significant issues of law or policy. A stock savings FSA that has elected to follow the
corporate governance provisions of the law of the state in which its holding company is
incorporated may continue to use those provisions even if the FSA is no longer controlled by
that holding company. All other filing requirements and procedures for adoption are the same
as those for mutual FSAs. 39

Anti-Takeover Provisions
An anti-takeover provision is any amendment to an FSA’s charter or bylaws that renders
more difficult or discourages (1) a merger, tender offer, or proxy contest; (2) the assumption
of control by a holder of a block of the FSA’s stock or an accountholder of a mutual FSA; or
(3) the removal of incumbent management.
If a mutual FSA converts to a stock FSA, the resulting FSA can amend its charter to
incorporate the anti-takeover provisions set forth in 12 CFR 5.22(g)(7). These provisions can
be applicable for no more than five years after the conversion from mutual to stock form. The
provisions limit the ability of any person to acquire more than 10 percent of any class of
equity security of the FSA during the effective term of the provision, prohibit cumulative
voting, and provide that special shareholder meetings may be called only by the board of
directors. There are certain allowable exceptions to the 10 percent limit, such as the
formation of a holding company, the purchase by underwriters in connection with a public
offering for the issuance of new shares of stock of the FSA, or the purchase of less than
25 percent of the FSA’s stock by a tax-qualified employee benefit plan.
In addition, as provided in 12 CFR 5.22(h), the OCC can approve an anti-takeover charter
amendment not listed in 12 CFR 5.22(g), regarding the acquisition by any person or persons
of the stock FSA’s equity securities. The FSA shall file as part of its application for approval
an opinion, acceptable to the OCC, of counsel independent from the FSA that a corporation
chartered by the state in which the principal office of the FSA is located would be permitted
to adopt the proposed charter provision. The provision must be consistent with applicable
statutes, regulations, and OCC policies. 40 Further, any provision that would render a change
in control of the FSA more difficult and would require for any corporate action (other than
38

Refer to 12 CFR 5.21(j)(3)(ii).

39

Refer to 12 CFR 5.22(j)(2)(ii).

40

Refer to 12 CFR 5.22(h).

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the removal of directors) the affirmative vote of a larger percentage of shareholders than is
required by 12 CFR 5.22(h) shall not be effective unless adopted by a percentage of
shareholder vote at least equal to the highest percentage that would be required to take any
action under the provision. The OCC generally does not approve supermajority provisions
that require approval of more than 80 percent of the voting shares.

Annual Meeting and Fiscal Year End Closing Date: Bylaw
Considerations
A change in the fiscal year end for either a mutual or stock FSA may require an amendment
to the annual meeting provision of the FSA’s bylaws. An annual meeting of the members of a
mutual FSA and an annual meeting of the shareholders of a stock FSA shall be held within
150 days after the end of the FSA’s fiscal year. Therefore, a change in the fiscal year may
require a change in the date of the annual meeting. See 12 CFR 5.21(j)(2)(i) and
5.22(k)(1)(i).

Existing Federal Savings Associations
FSAs in existence before September 15, 1983, might have charters that were valid at that
time but do not conform to the current model charter provisions. These FSAs can retain their
old charters, such as Charter B, B(Rev), K(Rev), N(Rev), and L for mutual FSAs, and
Charter S or T for stock FSAs. The OCC expects that an FSA proposing to adopt a new
charter, or a portion thereof, will modify its charter to adopt the current model charter
provisions in their entirety. This restatement of the charter prevents the intermingling of old
and new charter provisions.
Each FSA can adopt its own form of bylaws. However, they must contain provisions that
comply with all requirements under 12 CFR 5.21(j) for mutual FSAs and 12 CFR 5.22(j)
through (n) for stock FSAs, and that are not otherwise inconsistent with the provisions of the
applicable bylaw regulations, the association’s charter, and all other applicable laws, rules,
and regulations. An FSA can adopt a bylaw provision that is not consistent with the
provisions of the applicable bylaw regulations with the OCC’s approval.

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Appendix: Legal Requirements
This appendix contains some common legal requirements that may affect amendments to the
provisions of articles of association, charters, or bylaws.

National Bank Articles of Association
Articles of association for national banks generally must include the following provisions.
1. The name of the bank must include the word “national” (12 USC 22 and 30, and 12 CFR
5.42).
2. The location of the bank’s main office should include a city/town/village, county, and
state/territory/district. A street name should not be given, to avoid the need to amend the
articles for a relocation of the main office within the same city/town/village (12 USC 22,
30, and 81, and 12 CFR 5.40).
3. Directors should number no less than five and no more than 25, unless the OCC has
exempted the bank from the 25-member limit. Information about director qualifying
shares and vacancies should be included. For a bankers’ bank, information about
replacing participating banks should be included (12 USC 27(b), 71a, 72, and 74, and 12
CFR 7.2005, 7.2007, 7.2008, and 7.2009).
4. The procedures for holding the annual shareholders’ meeting and the election of directors
should be addressed. The articles may provide for cumulative voting for directors
(12 USC 61, 71, and 75, and 12 CFR 7.2002, 7.2003, 7.2004, 7.2005, 7.2006, 7.2007, and
7.2021).
5. The articles should identify all types and classes of the bank’s capital stock (12 USC 51a,
51b, 51b-1, 51c, 52, 56, 57, and 59, and 12 CFR 5.46 and 7.2021).
•
•

•

The par value of the bank’s common stock must be $100 or less (12 USC 52).
The shareholders must be provided or denied preemptive rights to acquire newly
issued shares of bank stock. Any amendment to the articles that modifies preemptive
rights must be approved by at least two-thirds of the holders of the bank’s outstanding
shares (12 CFR 7.2021).
The articles may include provisions for the issuance of subordinated debt
(12 CFR 5.47).

6. The articles should include the requirement that the person serving as, or in the function
of, president, regardless of title, must be a member of the board of directors. The articles
also should discuss the board’s powers, including its ability to appoint and dismiss
management (12 USC 24(5) and 76, and 12 CFR 7.2010 and 7.2012).
7. The articles should address the establishment of branches (12 USC 30, 36, and 81).
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8. The articles should address the ability to call special meetings of the shareholders
(various statutes and regulations apply, including 12 USC 21a, 30(b), 51a, 57, 59, 75,
181, 214a, 215, 215a, 215a-2, and 215a-3, and 12 CFR 5.33).
9. If included in the articles, indemnification payments to institution-affiliated parties
should be consistent with 12 USC 1828(k), and 12 CFR 7.2014 and 359. If the payment
of insurance premiums to cover the payment of expenses, legal fees, and liability of
institution-affiliated parties is included, the article should explicitly exclude coverage of
liability for a formal order assessing civil money penalties against a director or employee.
As applicable, a bank shall designate in its bylaws the body of law selected for making
indemnification payments under this provision.

National Bank Bylaws
Some of the more common issues addressed in bylaws are listed here, and some often appear
in a national bank’s articles of association.
1. Directors should number no less than five and no more than 25, unless the OCC has
granted a waiver to the 25-director limit. Information about qualifying shares and
vacancies should be included. For a bankers’ bank, information about replacing
participating banks should be included (12 USC 27(b), 71a, 72, and 74, and
12 CFR 7.2005, 7.2007, 7.2008, and 7.2009).
2. The annual shareholders’ meeting and the election of directors (12 USC 61, 71, and 75,
and 12 CFR 7.2002, 7.2003, 7.2004, 7.2005, 7.2006, 7.2007, and 7.2024).
3. The requirement that the person serving as, or in the function of, president, regardless of
title, must be a member of the board of directors. Bylaws also should discuss the board’s
powers, including its ability to appoint management (12 USC 24(5) and 76, and 12 CFR
7.2010, 7.2012, and 7.2015).
4. The ability to call special meetings of the shareholders (12 USC 21a, 30(b), 51a, 57, 59,
75, 181, 214a, 215, 215a, 215a-2, and 215a-3, and 12 CFR 5.33).
5. Restrictions on the transfer of stock and information about stock certificates
(12 USC 24(6) and 52, and 12 CFR 7.2016).
6. Indemnification payments to institution-affiliated parties should be consistent with
12 USC 1828(k) and 12 CFR 7.2014 and 359. If the payment of insurance premiums to
cover the payment of expenses, legal fees, and liability of institution-affiliated parties is
included, the article should explicitly exclude coverage of liability for a formal order
assessing civil money penalties against a director or employee. As applicable, a bank
shall designate in its bylaws the body of law selected for making indemnification
payments under this provision.

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7. The bylaws should specify the corporate governance procedures that the bank will
follow. To the extent that the corporate governance procedures are not inconsistent with
applicable federal banking statutes or regulations, or bank safety and soundness, a bank
can elect to follow the corporate governance procedures of the law of the state where the
bank’s main office or any branch is located, the law of the state in which the holding
company is incorporated (if applicable), the Delaware General Corporation Law, or the
Model Business Corporation Act. (12 CFR 7.2000).

FSA Charter
Charters for FSAs generally must include the following provisions (refer to 12 CFR 5.21 for
mutual charters and 12 CFR 5.22 for stock charters).
1. The full corporate title of the FSA.
2. The city and state of the home office.
3. The duration of the FSA should be perpetual.
4. The general purpose and powers of the FSA.
5. For mutual charters, the charter must address member qualifications and the number of
votes each member may cast.
6. For stock charters, the total number of authorized shares of all classes of capital stock and
the par value of the shares. In addition, the charter should specify under what
circumstances the stock can be issued; the amount and form of consideration to be paid
for the shares; limitations on the issuance of stock to officers, directors, or controlling
persons; and the voting rights of the stock.
7. The board of directors shall not be fewer than five nor more than 15, except as otherwise
approved by the OCC.
8. The process for amending the charter.

FSA Bylaws
Bylaws for FSAs should include the following provisions pursuant to 12 CFR 5.21 or 5.22.
1. The specifics of annual and special meetings of members, including the location, timing,
voting procedures, form of meeting notice, and record date determination.
2. For mutual charters, a provision regarding communication between members.
3. The exact number of directors and the term of service.
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4. The frequency and location of board meetings, the election of officers, and steps to be
taken in the event of a vacancy, a resignation, or the removal of a director.
5. Specific powers of the board and the establishment of board committees.
6. The process for amending the bylaws, including board or member (or shareholder)
approval and any required regulatory approval.
Bylaws for FSAs may include the following optional provisions.
1. For mutual and stock FSAs, an optional provision regarding age limitations for board
members and officers (12 CFR 5.22).
2. For mutual and stock FSAs, an optional provision on indemnification. Any such bylaw
provision, however, must comply with the requirements of 12 CFR 7.2014 and 359, and
the Federal Deposit Insurance Act.
3. For stock FSAs, the board of directors may also permit telephonic or electronic
participation of shareholders at annual and special meetings.
4. For mutual FSAs, the board of directors may also permit telephonic or electronic
participation of members at annual meetings.
5. For stock FSAs, each director shall at all times be the beneficial owner of not less than
100 shares of capital stock of the association unless the association is a wholly owned
subsidiary of a holding company.

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Glossary
Bankers’ bank: A bank owned exclusively, except for director qualifying shares, by other
depository institutions or depository institution holding companies. Bankers’ bank activities
are limited to providing the following:
•
•

Services to or for other depository institutions, their holding companies, or the officers,
directors, and employees of such institutions.
Correspondent banking services at the request of other depository institutions or their
holding companies.

Corporate governance: A set of relationships among a company’s management, its board,
its shareholders, and other stakeholders. Corporate governance also provides the structure
through which the objectives of the company are set, and by which the means of attaining
those objectives and monitoring performance are determined.
Covered savings associations: Section 5A of the Home Owners’ Loan Act (12 USC 1464a),
as implemented by 12 CFR 101, authorizes FSAs with total assets of $20 billion or less, as
reported to the OCC as of December 31, 2017, to operate as “covered savings associations”
(CSAs). A CSA has the same rights and privileges as a national bank and is subject to the
same duties, restrictions, penalties, liabilities, conditions, and limitations. A CSA retains its
FSA charter, however, and is treated as an FSA for purposes of governance and other
purposes described in the final rule. 41
Director qualifying shares: A director of a national bank must hold a minimum $1,000 par
value or fair market value of stock in the director’s own right in the national bank or an
equivalent interest in the parent company that controls the bank.
Federal savings association: An FSA or federal savings bank chartered pursuant to section
5 of the Home Owners’ Loan Act (12 USC 1464). An FSA may take one of two forms: (1) it
may be a stock FSA, in which stock is issued to shareholders for an offering price to raise
capital; or (2) it may be a mutual FSA, in which no stock is issued, and depositors (and in
some cases borrowers) have voting rights and certain other rights in the FSA.
Institution-affiliated party: (1) Any director, officer, employee, or controlling stockholder
(other than a bank holding company or savings and loan holding company) of, or agent for,
an insured depository institution; (2) any other person who has filed or is required to file a
change in control notice with the appropriate federal banking agency under 12 USC 1817(j);
(3) any shareholder (other than a bank holding company or savings and loan holding
company), consultant, joint venture partner, and other person as determined by the
appropriate federal banking agency (by regulation or case by case) who participates in the
conduct of the affairs of an insured depository institution; and (4) any independent contractor
(including any attorney, appraiser, or accountant) who knowingly or recklessly participates in
(a) any violation of any law or regulation; (b) any breach of fiduciary duty; or (c) any unsafe
41

Refer to OCC Bulletin 2019-25, “Covered Savings Associations.”

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or unsound practice, which caused or is likely to cause more than a minimal financial loss to,
or a significant adverse effect on, the insured depository institution (12 USC 1813(u)).
Model Business Corporation Act: A model set of laws prepared by the Committee on
Corporate Laws of the Section of Business Law of the American Bar Association that is
followed by several states.
Mutual FSA: An FSA that does not have stockholders. The members of the association (that
is, depositors and, in some cases, borrowers) have voting rights with respect to the
association.
National bank: An insured or uninsured national banking association chartered by the OCC
pursuant to the National Bank Act (12 USC 21, et seq.).
Preemptive rights: A privilege extended to shareholders of an institution that gives them the
right to purchase additional shares in the institution before the general public has the
opportunity.
Stock FSA: An FSA that issues shares of one or more classes of stock that represent equity
interests in the FSA. The stock may be held by one or more shareholders or stockholders.

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References
National Banks
Articles of Association
Law

12 USC 21 and 21a

Cumulative Voting
Law
Regulation

12 USC 61
12 CFR 7.2006

Location
Law
Regulation

12 USC 22 and 30
12 CFR 5.40

Name
Law

12 USC 22 and 30

Preemptive Rights
Regulation

12 CFR 7.2021

Quorum of Directors
Regulation

12 CFR 7.2009

Shareholder Meetings
Law
Stock
Law

12 USC 61
12 USC 51a, 51b, 51b-1, 52, and 57

Vacancies in Board
Regulation

12 CFR 7.2007

Bylaws
Law

12 USC 24(6)

Cashier
Regulation

12 CFR 7.2015

Chief Executive Officer
Regulation

12 CFR 7.2015

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Corporate Governance
Regulation

12 CFR 7.2000

Indemnification
Regulation

12 CFR 7.2014

Lost Stock Certificate
Regulation

12 CFR 7.2018

President
Regulation

12 CFR 7.2015

Quorum of Directors
Regulation

12 CFR 7.2009

Shareholder Meetings
Law
Regulation

12 USC 71 and 75
12 CFR 7.2003

Staggered Terms of Directors
Regulation

12 CFR 7.2024

Stock Certificate Signatures
Law
Regulation

12 USC 52
12 CFR 7.2016

Federal Savings Associations
Charter and Bylaws
Processing Guidelines and Procedures
Regulation

12 CFR 5, subpart A

Charter
Regulation
Mutual FSA Charter
Stock FSA Charter

12 CFR 5.21(e) and (f)
12 CFR 5.22(e) and (f)

Change of Home Office Location
Regulation
Mutual FSA
Stock FSA

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12 CFR 5.21(g)(3) and 5.40
12 CFR 5.22(g)(2) and 5.40

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Change of Title
Regulation
Mutual FSA
Stock FSA

12 CFR 5.21(g)(2) and 5.42
12 CFR 5.22(g)(1) and 5.42

Bylaws
Regulation
Mutual FSA
Stock FSA

12 CFR 5.21(j)
12 CFR 5.22(j)–(n)

Indemnification
Regulation

12 CFR 7.2014 and 359

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

Affected pages

Align booklet with recent changes to 12 CFR Part 5

All

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