[Code of Federal Regulations]
[Title 12, Volume 2, Parts 200 to 219]
[Revised as of January 1, 1999]
From the U.S. Government Printing Office via GPO Access
[CITE: 12CFR201.2]

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                       TITLE 12--BANKS AND BANKING
 
                   CHAPTER II--FEDERAL RESERVE SYSTEM
 
PART 201--EXTENSIONS OF CREDIT BY FEDERAL RESERVE BANKS (REGULATION A)--Table of Contents
 
Sec. 201.2  Definitions.

    For purposes of this part, the following definitions shall apply:

    (a) Appropriate Federal banking agency has the same meaning as in 
section 3 of the FDI Act (12 U.S.C. 1813(q)).
    (b) Critically undercapitalized insured depository institution means 
any insured depository institution as defined in section 3 of the FDI 
Act (12 U.S.C. 1813(c)(2)) that is deemed to be critically 
undercapitalized under section 38 of the FDI Act (12 U.S.C. 
1831o(b)(1)(E)) and the implementing regulations.
    (c)(1) Depository institution means an institution that maintains 
reservable transaction accounts or nonpersonal time deposits and is:
    (i) An insured bank as defined in section 3 of the FDI Act (12 
U.S.C. 1813(h)) or a bank which is eligible to make application to 
become an insured bank under section 5 of such Act (12 U.S.C. 1815);
    (ii) A mutual savings bank as defined in section 3 of the FDI Act 
(12 U.S.C. 1813(f)) or a bank which is eligible to make application to 
become an insured bank under section 5 of such Act (12 U.S.C. 1815);
    (iii) A savings bank as defined in section 3 of the FDI Act (12 
U.S.C. 1813(g)) or a bank which is eligible to make application to 
become an insured bank under section 5 of such Act (12 U.S.C. 1815);
    (iv) An insured credit union as defined in section 101 of the 
Federal Credit Union Act (12 U.S.C. 1752(7)) or a credit

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union which is eligible to make application to become an insured credit 
union pursuant to section 201 of such Act (12 U.S.C. 1781);
    (v) A member as defined in section 2 of the Federal Home Loan Bank 
Act (12 U.S.C. 1422(4)); or
    (vi) A savings association as defined in section 3 of the FDI Act 
(12 U.S.C. 1813(b)) which is an insured depository institution as 
defined in section 3 of the Act (12 U.S.C. 1813(c)(2)) or is eligible to 
apply to become an insured depository institution under section 5 of the 
Act (12 U.S.C. 1815(a)).
    (2) The term depository institution does not include a financial 
institution that is not required to maintain reserves under Regulation D 
(12 CFR part 204) because it is organized solely to do business with 
other financial institutions, is owned primarily by the financial 
institutions with which it does business, and does not do business with 
the general public.
    (d) Liquidation loss means the loss that any deposit insurance fund 
in the FDIC would have incurred if the FDIC had liquidated the 
institution:
    (1) In the case of an undercapitalized insured depository 
institution, as of the end of the later of:
    (i) Sixty days:
    (A) In any 120-day period;
    (B) During which the institution was an undercapitalized insured 
depository institution; and
    (C) During which advances or discounts were outstanding to the 
depository institution from any Federal Reserve Bank; or
    (ii) The 60 calendar day period following the receipt by a Federal 
Reserve Bank of a written certification from the Chairman of the Board 
of Governors or the head of the appropriate Federal banking agency that 
the institution is viable.
    (2) In the case of a critically undercapitalized insured depository 
institution, as of the end of the 5-day period beginning on the date the 
institution became a critically undercapitalized insured depository 
institution.
    (e) Increased loss means the amount of loss to any deposit insurance 
fund in the FDIC that exceeds the liquidation loss due to:
    (1) An advance under section 10B(1)(a) of the FRA that is 
outstanding to an undercapitalized or critically undercapitalized 
insured depository institution without payment having been demanded as 
of the end of the periods specified in paragraphs (d)(1) and (2) of this 
section; or
    (2) An advance under section 10B(1)(a) of the Federal Reserve Act 
that is made after the end of such periods.
    (f) Excess loss means the lesser of the increased loss or that 
portion of the increased loss equal to the lesser of:
    (1) The loss the Board of Governors or any Federal Reserve Bank 
would have incurred on the amount by which advances under section 
10B(1)(a) exceed the amount of advances outstanding at the end of the 
periods specified in paragraphs (d)(1) and (2) of this section if those 
increased advances had been unsecured; or
    (2) The interest received on the amount by which the advances under 
section 10B(1)(a) exceed the amount of advances outstanding, if any, at 
the end of the periods specified in paragraphs (d)(1) and (2) of this 
section.
    (g) Transaction account and nonpersonal time deposit have the 
meanings specified in Regulation D (12 CFR part 204).
    (h) Undercapitalized insured depository institution means any 
insured depository institution as defined in section 3 of the FDI Act 
(12 U.S.C. 1813(c)(2)) that:
    (1) Is not a critically undercapitalized insured depository 
institution; and
    (2)(i) Is deemed to be undercapitalized under section 38 of the FDI 
Act (12 U.S.C. 1831o(b)(1)(C)) and the implementing regulations; or
    (ii) Has received from its appropriate Federal banking agency a 
composite CAMEL rating of 5 under the Uniform Financial Institutions 
Rating System (or an equivalent rating by its appropriate Federal 
banking agency under a comparable rating system) as of the most recent 
examination of such institution.
    (i) Viable, with respect to a depository institution, means that the 
Board of Governors or the appropriate Federal banking agency has 
determined,

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giving due regard to the economic conditions and circumstances in the 
market in which the institution operates, that the institution is not 
critically undercapitalized, is not expected to become critically 
undercapitalized, and is not expected to be placed in conservatorship or 
receivership. Although there are a number of criteria that may be used 
to determine viability, the Board of Governors believes that ordinarily 
an undercapitalized insured depository institution is viable if the 
appropriate Federal banking agency has accepted a capital restoration 
plan for the depository institution under 12 U.S.C. 1831o(e)(2) and the 
depository institution is complying with that plan.

[58 FR 68512, Dec. 28, 1993]