On April 5, 2012, the Federal Reserve Board (“FRB”) released a policy statement regarding the rental of residential other real estate owned (“OREO”) properties by financial entities for which the FRB is the primary federal supervisor, including state member banks, bank holding companies, non-bank subsidiaries of bank holding companies, savings and loan holding companies, non-thrift subsidiaries of savings and loan holding companies, and U.S. branches and agencies of foreign banking organizations, (collectively “banking organizations”). Although this memorandum attempts to summarize the major provisions of the policy statement, you are advised to read the policy statement, which may be found at:http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20120405a1.pdf. Introductory Statements • The policy statement reminds banking organizations and examiners that the FRB’s regulations and policies permit the rental of residential OREO properties to third party tenants as part of an orderly disposition strategy within statutory and regulatory limits and outlines supervisory expectations for these rental activities.

Complete Memorandum