Final answer:
The OCC's position, as indicated in Regulation 9, allows the lending of trust funds for a permanent mortgage loan following a construction loan only if the trust instrument specifically authorizes such an action.
Step-by-step explanation:
The Office of the Comptroller of the Currency (OCC) has specific regulations that govern the activities of national banks, including the management of trust funds. When considering the lending of trust funds for a permanent mortgage loan where the bank's commercial department previously made the construction loan, one must look at the provisions of Regulation 9. Option 2 in the question indicates that such a practice can be done only where the governing instrument specifically authorizes it. This aligns with general principles of fiduciary duty and trust management which mandate that the actions of the trustee (in this case, the bank acting in a fiduciary capacity) must adhere strictly to the terms of the trust instrument.
Simply put, unless the trust document itself allows for the trust funds to be used for a permanent mortgage loan following a construction loan, such an action would not be permissible under Regulation 9. Trusts are often established with detailed instructions on how funds are to be used, and fiduciaries must adhere to those instructions to remain in compliance with both the OCC's regulations and trust law.