Regulatory Alerts2008-03-19
Nonobjection to Charge Prepayment Penalties in Parity
The Pennsylvania Department of Banking issued a nonobjection letter to a state-chartered bank regarding its proposal to impose prepayment fees on loans. The Department authorized these fees based on the bank's parity with federal savings associations under the Federal Home Owners Loan Act and relevant federal regulations. This nonobjection is contingent upon the facts and representations provided in the bank's notice, with any changes potentially leading to an amendment or reversal of the decision.
MARI<IT SQUARE PLAZA / 17 N SECOI.IO STREET. 13'* FL I HAHRISUURG. PA 17101
717.Y87.2665 737787.8773 5 wc~~,trank~nr~.~la~c.p~.ui.
Dear
This letter I-esuonds lo the Bank Parity and S~tbsidiary Notice (the "Notice") )'nu subnlitted on
behalf of (the "Ballk"), a Pennsyl~ania srate-chartered bank, to the
Conlmonwcalth of Pellnsyl\rania De11ai-riilent of Banking (tile "DeparLment") regarding the
Bank's proposal to ilnpose fees fir, or in connection with, the prepayment of loans in parity with
the ability of federal savin_es associatiolls undei- the Federal Home O<!nei,s Loan Act, pursuant to
Section 20l(c)(ii) of the Pennsylvania Banking Code of 1965, 7 P.S. $ 20l(c)(ii). Specifically,
the Bank intends to utilize 12 U.S.C. 1464(c) and Office of Thrift Sul~ervision re~ulalions
applicable to fedel-al savings associalions at 12 C.F.R. 48 560.34 and 560.2(L)(5) asthe authority
for the imposiriol~ of these fees.
Please be advised that tlle Departm~nt does not object to the Bai~k ilposing prepa)lment fees
pursuan[ to the above-noted sratutory and ~,egulatol-y authority: pursuant to Section 70I(c)(ii) of
the Pe~ms)~Ivania Ba~drig Code of 1965. Tile Department's non-objection is based upon the
facts and I-eprescntations as slated in the Notice pro~rided to the Departmenl. An) changes ill the
facts could resul[ in an amei~dmcnt or reversal of tlie depart men^'^ nnn-ol~jection.
I trust Lhis let~er is responsi~e to your requesl. Please contact loscph A. I\loretz, h4anager or
Colporate Applications, of this office shonld yo11 requil-e additio~~al explanation or infol-nlation
regarding this matter.
Very truly yours,
Timothy J. Blase
Director - Bureau of
Sul)ervision and Enforcemen1