12 CFR 340.2 – Definitions
Many of the terms used in this part are defined in the Federal Deposit Insurance Act, 12 U.S.C. § 1811, et seq. Additionally, for the purposes of this part, the following terms are defined:
Terms Used In 12 CFR 340.2
- Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Dependent: A person dependent for support upon another.
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Trustee: A person or institution holding and administering property in trust.
(a) Associated person of an individual or entity means:
(1) With respect to an individual:
(i) The individual’s spouse or dependent child or any member of his or her immediate household;
(ii) A partnership of which the individual is or was a general or limited partner;
(iii) A limited liability company of which the individual is or was a member; or
(iv) A corporation of which the individual is or was an officer or director.
(2) With respect to a partnership, a managing or general partner of the partnership or with respect to a limited liability company, a manager; or
(3) With respect to any entity, an individual or entity who, acting individually or in concert with one or more individuals or entities, owns or controls 25 percent or more of the entity.
(b) Default means any failure to comply with the terms of an obligation to such an extent that:
(1) A judgment has been rendered in favor of the FDIC or a failed institution; or
(2) In the case of a secured obligation, the property securing such obligation is foreclosed on.
(c) FDIC means the Federal Deposit Insurance Corporation.
(d) Failed institution means any insured depository institution (as defined in 12 U.S.C. § 1813(c)) that has been under the conservatorship or receivership of the FDIC or any of its predecessors.
(e) Financial intermediary means any broker, dealer, bank, underwriter, exchange, clearing agency registered with the Securities and Exchange Commission (SEC) under section 17A of the Securities Exchange Act of 1934, transfer agent (as defined in section 3(a)(25) of the Securities Exchange Act of 1934), central counterparty or any other entity whose role is to facilitate a transaction by, as a riskless intermediary, purchasing a security or qualified financial contract from one counterparty and then selling it to another.
(f) Obligation means any debt or duty to pay money owed to the FDIC or a failed institution, including any guarantee of any such debt or duty.
(g) Person means an individual, or an entity with a legally independent existence, including: A trustee; the beneficiary of at least a 25 percent share of the proceeds of a trust; a partnership; a corporation; an association; or other organization or society.
(h) Substantial loss means:
(1) An obligation that is delinquent for ninety (90) or more days and on which there remains an outstanding balance of more than $50,000;
(2) An unpaid final judgment in excess of $50,000 regardless of whether it becomes forgiven in whole or in part in a bankruptcy proceeding;
(3) A deficiency balance following a foreclosure of collateral in excess of $50,000, regardless of whether it becomes discharged in whole or in part in a bankruptcy proceeding;
(4) Any loss in excess of $50,000 evidenced by an IRS Form 1099-C (Information Reporting for Cancellation of Debt).