Oregon Bulletin

March 1, 2013

Department of Consumer and Business Services, Division of Finance and Corporate Securities, Chapter 441

Rule Caption: Repeal Temporary Rule and Adopt Permanent Rule Governing Interest Rate Swap Transactions

Adm. Order No.: FCS 2-2013

Filed with Sec. of State: 1-23-2013

Certified to be Effective: 1-23-13

Notice Publication Date: 11-1-2012

Rules Adopted: 441-505-3090

Rules Repealed: 441-505-3090(T)

Subject: Like the temporary rule, the permanent rule gives Oregon chartered commercial banks authority to engage in interest rate swap transactions with and on behalf of the banks’ loan customers and to pledge the banks’ assets in connection with such transactions. While national banks and other financial institutions currently possess this authority, Oregon chartered banks may not engage in these types of transactions unless the Director of the Department of Consumer and Business Services permits them to do so under ORS 706.795. Without this rule, Oregon chartered commercial banks will be unable to compete on equal terms with national banks and other institutions.

Rules Coordinator: Shelley Greiner—(503) 947-7484


Interest Rate Swap Transactions

(1) An Oregon commercial bank may engage in interest rate swap transactions as intermediary with and on behalf of the bank’s customers and pledge bank assets to secure the transactions if the bank receives prior written approval from the Director of the Department of Consumer and Business Services and the following conditions are met to the director’s satisfaction:

(a) The bank demonstrates to the director that it has the requisite knowledge and expertise to effectively analyze and engage in such transactions;

(b) The bank’s board of directors has considered and adopted specific written polices and procedures governing such transactions, including but not limited to risk limits; and

(2) The aggregate risk exposure, at any time, to each counterparty shall not exceed the bank’s legal lending limit.

Stat. Auth.: ORS 706.790
Stats. Implemented: ORS 706.795
Hist.: FCS 5-2012(Temp), f. 8-7-12, cert. ef. 8-8-12 thru 2-4-13; FCS 2-2013, f. & cert. ef. 1-23-13

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