WASHINGTON — The Office of the Comptroller of the Currency has reversed a policy allowing banking licenses for trust companies without deposit insurance, a change likely to further diminish interest in the federal trust charter.
The OCC had long allowed nondepository trusts to get charters without Federal Deposit Insurance Corp. approval if they had no deposits and were narrowly focused on trust-related business. Sixty-three uninsured trust banks fall under the OCC's watch. But an OCC official at a recent American Bar Association event revealed the agency is removing the special treatment for new entrants. Existing trusts will be grandfathered.