The following definitions shall
apply to this subpart:
(a) Affiliate, company, control, and subsidiary. The terms “affiliate,”
“company,” “control,” and “subsidiary” have the meanings given those terms
in section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841).
(b) Appropriate federal
banking agency, depository institution, insured bank, and insured
depository institution. The terms “appropriate federal banking
agency,” “depository institution,” “insured bank,” and “insured depository
institution” have the meanings given those terms in section 3 of the
Federal Deposit Insurance Act (12 U.S.C. 1813).
(c) [Reserved].
(d) Eligible debt. The term “eligible debt” means unsecured debt
with an initial maturity of more than 360 days that—
(1) is not supported by any form of credit
enhancement, including a guarantee or standby letter of credit; and
(2) is not held in whole
or in any significant part by any affiliate, officer, director, principal
shareholder, or employee of the bank or any other person acting on
behalf of or with funds from the bank or an affiliate of the bank.
3-387.1
(e) Financial subsidiary.
(1) In general. The term “financial subsidiary” means any company
that is controlled by one or more insured depository institutions other than—
(i) a subsidiary that engages only in
activities that the state member bank is permitted to engage in directly
and that are conducted on the same terms and conditions that govern
the conduct of the activities by the state member bank; or
(ii) a subsidiary that the
state member bank is specifically authorized by the express terms
of a federal statute (other than section 9 of the Federal Reserve
Act (12 U.S.C. 335)), and not by implication or interpretation, to
control, such as by section 25 or 25A of the Federal Reserve Act (12
U.S.C. 601-604a or 611-631) or the Bank Service Company Act (12 U.S.C.
1861 et seq.)
(2) Subsidiaries
of financial subsidiaries. A financial subsidiary includes any
company that is directly or indirectly controlled by the financial
subsidiary.
(f) Long-term issuer credit rating. The term “long-term issuer credit
rating” means a written opinion issued by a nationally recognized
statistical rating organization of the bank’s overall capacity and
willingness to pay on a timely basis its unsecured, dollar-denominated
financial obligations maturing in not less than one year.
3-387.2
(g) Well capitalized.
(1) Insured depository
institutions. An insured depository institution is well capitalized
if it has and maintains at least the capital levels required to be
well capitalized under the capital adequacy regulations or guidelines
adopted by the institution’s appropriate federal banking agency under
section 38 of the Federal Deposit Insurance Act (12 U.S.C. 1831o).
(2) Uninsured depository institutions. A depository
institution the deposits of which are not insured by the Federal Deposit
Insurance Corporation is well capitalized if the institution has and
maintains at least the capital levels required for an insured depository
institution to be well capitalized.
(h) Well managed.
(1) In general. The term “well managed” means—
(i) unless otherwise determined
in writing by the appropriate federal banking agency, the institution
has received a composite rating of 1 or 2 under the Uniform Financial
Institutions Rating System (or an equivalent rating under an equivalent
rating system) and at least a rating of 2 for management (if such
rating is given) in connection with its most recent examination or
subsequent review by the institution’s appropriate federal banking
agency (or the appropriate state banking agency in an examination
described in section 10(d) of the Federal Deposit Insurance Act (12
U.S.C. 1820(d)); or
(ii) in the case of any depository institution that has not been
examined by its appropriate federal banking agency or been subject
to an examination by its appropriate state banking agency that meets the
requirements of section 10(d) of the Federal Deposit Insurance Act
(12 U.S.C. 1820(d)), the existence and use of managerial resources
that the appropriate federal banking agency determines are satisfactory.
(2) Merged depository institutions.
(i) Merger involving well-managed institutions. A depository institution that results from the merger of two or
more depository institutions that are well managed will be considered
to be well managed unless the appropriate federal banking agency for
the resulting depository institution determines otherwise.
(ii) Merger involving a poorly rated institution. A depository institution
that results from the merger of a well-managed depository institution
with one or more depository institutions that are not well managed
or that have not been examined shall be considered to be well managed
if the appropriate federal banking agency for the resulting depository
institution determines that the institution is well managed.
