April 30, 1993
AMENDMENT TO SUPERINTENDENT OF BANKING INTERPRETIVE BULLETIN #4
TO THE CHIEF EXECUTIVE OFFICER OF THE STATE CHARTERED BANK ADDRESSED:
RE: Courier Service
This will serve to amend the November 30, 1989 Superintendent of Banking Interpretive Bulletin #4, a copy of which is enclosed. That bulletin discussed the conditions under which courier services could be provided to bank customers. As you recall, courier services provided directly by bank employees to customers was viewed to constitute impermissible "branch banking" and a violation of Iowa Code Section 524.1201 (1993) for state and national banks alike. The service provided through a third party courier was viewed as permissible, as long as the courier billed the bank customer directly for the actual cost of the service and the bank provided no subsidy whatsoever for the service.
In January of this year, the Office of the Comptroller of the Currency (OCC) further clarified its position on courier services. In that interpretation, the OCC ruled that national banks would not affect the applicability of the branching restrictions of the McFadden Act with respect to courier services, provided that, among other things, the service is established and operated by a third party and does not operate under the name of a bank. Also in that ruling, the OCC permitted national banks to defray costs incurred by their customers without causing the service to be viewed as a bank established service.
Based upon the recent OCC ruling and my effort to provide a competitively level playing field for state banks, I am making the following amendment to the Division's previous bulletin on this topic. I will eliminate our prior direct billing requirement and now allow third party providers to be able to master bill banks for all customer stops; and then the banks may handle the individual customers as they deem appropriate. From the banking industry perspective, this change would allow banks the option to defray costs incurred by the customer for the service on a transaction-by-transaction basis, pass on the actual per stop charge to the customer or generate fee income by tacking on a profit margin for the service.
Sincerely yours,
R. H. Buenneke
Superintendent of Banking
Enclosure