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FDIC Law, Regulations, Related Acts

[Main Tabs]     [Table of Contents - 1000]     [Index]     [Previous Page]     [Next Page]     [Search] 1000 - FDIC Federal Deposit Insurance Act   (m)  NEW BANKS.--     (1)  ORGANIZATION AUTHORIZED.--As soon as possible after the default of an insured bank, the Corporation, if it finds that it is advisable and in the interest of the depositors of the insured bank in default or the public shall organize a new national bank in the same community as the bank in default to assume the insured deposits of such bank in default and otherwise to perform temporarily the functions hereinafter provided for.     (2)  ARTICLES OF ASSOCIATION.--The articles of association and the organization certificate of the new bank shall be executed by representatives designated by the Corporation.     (3)  CAPITAL STOCK.--No capital stock need be paid in by the Corporation.     (4)  EXECUTIVE OFFICER.--The new bank shall not have a board of directors, but shall be managed by an executive officer appointed by the Board of Directors of the Corporation who shall be subject to its directions. {{4-28-06 p.1188.21}}     (5)  SUBJECT TO LAWS RELATING TO NATIONAL BANKS.--In all other respects the new bank shall be organized in accordance with the then existing provisions of law relating to the organization of national banking associations.     (6)  NEW DEPOSITS.--The new bank may, with the approval of the Corporation, accept new deposits which shall be subject to withdrawal on demand and which, except where the new bank is the only bank in the community, shall not exceed an amount equal to the standard maximum deposit insurance amount (as determined under section 11(a)(1)) from any depositor.     (7)  INSURED STATUS.--The new bank, without application to or approval by the Corporation, shall be an insured depository institution and shall maintain on deposit with the Federal Reserve bank of its district reserves in the amount required by law for member banks, but it shall not be required to subscribe for stock of the Federal Reserve bank.     (8)  INVESTMENTS.--Funds of the new bank shall be kept on hand in cash, invested in obligations of the United States or obligations guaranteed as to principal and interest by the United States, or deposited with the Corporation, any Federal Reserve bank, or, to the extent of the insurance coverage on any such deposit, an insured depository institution.     (9)  CONDUCT OF BUSINESS.--The new bank, unless otherwise authorized by the Comptroller of the Currency, shall transact business only as authorized by this Act and as may be incidental to its organization.     (10)  EXEMPT STATUS.--Notwithstanding any other provision of Federal or State law, the new bank, its franchise, property, and income shall be exempt from all taxation now or hereafter imposed by the United States, by any territory, dependency, or possession thereof, or by any State, county, municipality, or local taxing authority.     (11)  TRANSFER OF DEPOSITS.--(A) Upon the organization of a new bank, the Corporation shall promptly make available to it an amount equal to the estimated insured deposits of such bank in default plus the estimated amount of the expenses of operating the new bank, and shall determine as soon as possible the amount due each depositor for the depositor's insured deposit in the bank in default, and the total expenses of operation of the new bank.       (B)  Upon such determination, the amounts so estimated and made available shall be adjusted to conform to the amounts so determined.     (12)  EARNINGS.--Earnings of the new bank shall be paid over or credited to the Corporation in such adjustment.     (13)  LOSSES.--If any new bank, during the period it continues its status as such, sustains any losses with respect to which it is not effectively protected except by reason of being an insured bank, the Corporation shall furnish to it additional funds in the amount of such losses.     (14)  PAYMENT OF INSURED DEPOSITS.--(A) The new bank shall assume as transferred deposits the payment of the insured deposits of such bank in default to each of its depositors.       (B)  Of the amounts so made available, the Corporation shall transfer to the new bank, in cash, such sums as may be necessary to enable it to meet its expenses of operation and immediate cash demands on such transferred deposits, and the remainder of such amounts shall be subject to withdrawal by the new bank on demand.     (15)  ISSUANCE OF STOCK.--(A) Whenever in the judgment of the Board of Directors it is desirable to do so, the Corporation shall cause capital stock of the new bank to be offered for sale on such terms and conditions as the Board of Directors shall deem advisable in an amount sufficient, in the opinion of the Board of Directors, to make possible the conduct of the business of the new bank on a sound basis, but in no event less than that required by section 5138 of the Revised Statutes for the organization of a national bank in the place where such new bank is located.       (B)  The stockholders of the insured bank in default shall be given the first opportunity to purchase any shares of common stock so offered.     (16)  ISSUANCE OF CERTIFICATE.--Upon proof that an adequate amount of capital stock in the new bank has been subscribed and paid for in cash, the Comptroller of the Currency {{4-28-06 p.1188.22}}shall require the articles of association and the organization certificate to be amended to conform to the requirements for the organization of a national bank, and thereafter, when the requirements of law with respect to the organization of a national bank have been complied with, the Comptroller of the Currency shall issue to the bank a certificate of authority to commence business, and thereupon the bank shall cease to have the status of a new bank, shall be managed by directors elected by its own shareholders, may exercise all the powers granted by law, and shall be subject to all provisions of law relating to national banks. Such bank shall thereafter be an insured national bank, without certification to or approval by the Corporation.     (17)  TRANSFER TO OTHER INSTITUTION.--If the capital stock of the new bank is not offered for sale, or if an adequate amount of capital for such new bank is not subscribed and paid for, the Board of Directors may offer to transfer its business to any insured depository institution in the same community which will take over its assets, assume its liabilities, and pay to the Corporation for such business such amount as the Board of Directors may deem adequate; or the Board of Directors in its discretion may change the location of the new bank to the office of the Corporation or to some other place or may at any time wind up its affairs as herein provided.     (18)  WINDING UP.--Unless the capital stock of the new bank is sold or its assets are taken over and its liabilities are assumed by an insured depository institution as above provided within 2 years after the date of its organization, the Corporation shall wind up the affairs of such bank, after giving such notice, if any, as the Comptroller of the Currency may require, and shall certify to the Comptroller of the Currency the termination of the new bank. Thereafter the Corporation shall be liable for the obligations of such bank and shall be the owner of its assets.     (19)  APPLICABILITY OF CERTAIN LAWS.--The provisions of sections 5220 and 5221 of the Revised Statutes shall not apply to a new bank under this subsection. [Codified to 12 U.S.C. 1821(m)] [Source:  Section 2[11(m)] of the Act of September 21, 1950 (Pub. L. No. 797), effective September 21, 1950, as added by section 213 of title II of the Act of August 9, 1989 (Pub. L. No. 101--73; 103 Stat. 243), effective August 9, 1989; section 2(c)(1) of the Act of February 15, 2006 (Pub. L. No. 109--173; 119 Stat. 3602), effective date shall take effect on the date on which the final regulations required under section 2109(a)(2), of the Federal Deposit Insurance Reform Act of 2005 take effect]   (n)  BRIDGE BANKS.--     (1)  ORGANIZATION.--       (A)  PURPOSE.--When 1 or more insured banks are in default, or when the Corporation anticipates that 1 or more insured banks may become in default, the Corporation may, in its discretion, organize, and the Office of the Comptroller of the Currency shall charter, 1 or more national banks with respect thereto with the powers and attributes of national banking associations, subject to the provisions of this subsection, to be referred to as bridge banks.       (B)  AUTHORITIES.--Upon the granting of a charter to a bridge bank, the bridge bank may--         (i)  assume such deposits of such insured bank or banks that is or are in default or in danger of default as the Corporation may, in its discretion, determine to be appropriate, except that if any insured deposits of a bank are assumed, all insured deposits of that bank shall be assumed by the bridge bank or another insured depository institution;         (ii)  assume such other liabilities (including liabilities associated with any trust business) of such insured bank or banks that is or are in default or in danger of default as the Corporation may, in its discretion, determine to be appropriate; {{10-31-94 p.1188.23}}         (iii)  purchase such assets (including assets associated with any trust business) of such insured bank or banks that is or are in default or in danger of default as the Corporation may, in its discretion, determine to be appropriate; and         (iv)  perform any other temporary function which the Corporation may, in its discretion, prescribe in accordance with this Act.       (C)  ARTICLES OF ASSOCIATION.--The articles of association and organization certificate of a bridge bank as approved by the Corporation shall be executed by 3 representatives designated by the Corporation.       (D)  INTERIM DIRECTORS.--A bridge bank shall have an interim board of directors consisting of not fewer than 5 nor more than 10 members appointed by the Corporation.       (E)  NATIONAL BANK.--A bridge bank shall be organized as a national bank.     (2)  CHARTERING.--       (A)  CONDITIONS.--A national bank may be chartered by the Comptroller of the Currency as a bridge bank only if the Board of Directors determines that--         (i)  the amount which is reasonably necessary to operate such bridge bank will not exceed the amount which is reasonably necessary to save the cost of liquidating, including paying the insured accounts of, 1 or more insured banks in default or in danger of default with respect to which the bridge bank is chartered;         (ii)  the continued operation of such insured bank or banks in default or in danger of default with respect to which the bridge bank is chartered is essential to provide adequate banking services in the community where each such bank in default or in danger of default is located; or         (iii)  the continued operation of such insured bank or banks in default or in danger of default with respect to which the bridge bank is chartered is in the best interest of the depositors of such bank or banks in default or in danger of default or the public.       (B)  INSURED NATIONAL BANK.--A bridge bank shall be an insured bank from the time it is chartered as a national bank.       (C)  Bridge bank treated as being in default for certain purposes.--A bridge bank shall be treated as an insured bank in default at such times and for such purposes as the Corporation may, in its discretion, determine.       (D)  MANAGEMENT.--A bridge bank, upon the granting of its charter, shall be under the management of a board of directors consisting of not fewer than 5 nor more than 10 members appointed by the Corporation.       (E)  BYLAWS.--The board of directors of a bridge bank shall adopt such bylaws as may be approved by the Corporation.     (3)  TRANSFER OF ASSETS AND LIABILITIES.--       (A)  IN GENERAL.--         (i)  TRANSFER UPON GRANT OF CHARTER.--Upon the granting of a charter to a bridge bank pursuant to this subsection, the Corporation, as receiver, or any other receiver appointed with respect to any insured bank in default with respect to which the bridge bank is chartered may transfer any assets and liabilities of such bank in default to the bridge bank in accordance with paragraph (1).         (ii)  SUBSEQUENT TRANSFERS.--At any time after a charter is granted to a bridge bank, the Corporation, as receiver, or any other receiver appointed with respect to an insured bank in default may transfer any assets and liabilities of such insured bank in default as the Corporation may, in its discretion, determine to be appropriate in accordance with paragraph (1).         (iii)  TREATMENT OF TRUST BUSINESS.--For purposes of this paragraph, the trust business, including fiduciary appointments, of any insured bank in default is included among its assets and liabilities.         (iv)  EFFECTIVE WITHOUT APPROVAL.--The transfer of any assets or liabilities, including those associated with any trust business, of an insured bank in default transferred to a bridge bank shall be effective without any further approval under Federal or State law, assignment, or consent with respect thereto. {{10-31-94 p.1188.24}}       (B)  Intent of congress regarding continuing operations.--It is the intent of the Congress that, in order to prevent unnecessary hardship or losses to the customers of any insured bank in default with respect to which a bridge bank is chartered, especially creditworthy farmers, small businesses, and households, the Corporation should--         (i)  continue to honor commitments made by the bank in default to creditworthy customers, and         (ii)  not interrupt or terminate adequately secured loans which are transferred under subparagraph (A) and are being repaid by the debtor in accordance with the terms of the loan instrument.     (4)  POWERS OF BRIDGE BANKS.--Each bridge bank chartered under this subsection shall have all corporate powers of, and be subject to the same provisions of law as, a national bank, except that--       (A)  the Corporation may--         (i)  remove the interim directors and directors of a bridge bank;         (ii)  fix the compensation of members of the interim board of directors and the board of directors and senior management, as determined by the Corporation in its discretion, of a bridge bank; and         (iii)  waive any requirement established under section 5145, 5146, 5147, 5148, or 5149 of the Revised Statutes (relating to directors of national banks) or section 31 of the Banking Act of 1933 which would otherwise be applicable with respect to directors of a bridge bank by operation of paragraph (2)(B);       (B)  the Corporation may indemnify the representatives for purposes of paragraph (1)(B) and the interim directors, directors, officers, employees, and agents of a bridge bank on such terms as the Corporation determines to be appropriate;       (C)  no requirement under section 5138 of the Revised Statutes or any other provision of law relating to the capital of a national bank shall apply with respect to a bridge bank;       (D)  the Comptroller of the Currency may establish a limitation on the extent to which any person may become indebted to a bridge bank without regard to the amount of the bridge bank's capital or surplus;       (E)(i)  the board of directors of a bridge bank shall elect a chairperson who may also serve in the position of chief executive officer, except that such person shall not serve either as chairperson or as chief executive officer without the prior approval of the Corporation; and         (ii)  the board of directors of a bridge bank may appoint a chief executive officer who is not also the chairperson, except that such person shall not serve as chief executive officer without the prior approval of the Corporation;       (F)  a bridge bank shall not be required to purchase stock of any Federal Reserve bank;       (G)  the Comptroller of the Currency shall waive any requirement for a fidelity bond with respect to a bridge bank at the request of the Corporation;       (H)  any judicial action to which a bridge bank becomes a party by virtue of its acquisition of any assets or assumption of any liabilities of a bank in default shall be stayed from further proceedings for a period of up to 45 days at the request of the bridge bank;       (I)  no agreement which tends to diminish or defeat the right, title or interest of a bridge bank in any asset of an insured bank in default acquired by it shall be valid against the bridge bank unless such agreement--         (i)  is in writing,         (ii)  was executed by such insured bank in default and the person or persons claiming an adverse interest thereunder, including the obligor, contemporaneously with the acquisition of the asset by such insured bank in default,         (iii)  was approved by the board of directors of such insured bank in default or its loan committee, which approval shall be reflected in the minutes of said board or committee, and {{10-31-94 p.1188.25}}         (iv)  has been, continuously from the time of its execution, an official record of such insured bank in default;       (J)  notwithstanding section 13(e)(2), any agreement relating to an extension of credit between a Federal home loan bank or Federal Reserve bank and any insured depository institution which was executed before the extension of credit by such bank to such depository institution shall be treated as having been executed contemporaneously with such extension of credit for purposes of subparagraph (I); and       (K)  except with the prior approval of the Corporation, a bridge bank may not, in any transaction or series of transactions, issue capital stock or be a party to any merger, consolidation, disposition of assets or liabilities, sale or exchange of capital stock, or similar transaction, or change its charter.     (5)  CAPITAL.--       (A)  NO CAPITAL REQUIRED.--The Corporation shall not be required to--         (i)  issue any capital stock on behalf of a bridge bank chartered under this subsection; or         (ii)  purchase any capital stock of a bridge bank, except that notwithstanding any other provision of Federal or State law, the Corporation may purchase and retain capital stock of a bridge bank in such amounts and on such terms as the Corporation, in its discretion, determines to be appropriate.       (B)  OPERATING FUNDS IN LIEU OF CAPITAL.--Upon the organization of a bridge bank, and thereafter, as the Board of Directors may, in its discretion, determine to be necessary or advisable, the Corporation may make available to the bridge bank, upon such terms and conditions and in such form and amounts as the Corporation may in its discretion determine, funds for the operation of the bridge bank in lieu of capital.       (C)  AUTHORITY TO ISSUE CAPITAL STOCK.--Whenever the Board of Directors determines it is advisable to do so, the Corporation shall cause capital stock of a bridge bank to be issued and offered for sale in such amounts and on such terms and conditions as the Corporation may, in its discretion, determine.     (6)  NO FEDERAL STATUS.--       (A)  AGENCY STATUS.--A bridge bank is not an agency, establishment, or instrumentality of the United States.       (B)  EMPLOYEE STATUS.--Representatives for purposes of paragraph (1)(B), interim directors, directors, officers, employees, or agents of a bridge bank are not, solely by virtue of service in any such capacity, officers or employees of the United States. Any employee of the Corporation or of any Federal instrumentality who serves at the request of the Corporation as a representative for purposes of paragraph (1)(B), interim director, director, officer, employee, or agent of a bridge bank shall not--         (i)  solely by virtue of service in any such capacity lose any existing status as an officer or employee of the United States for purposes of title 5, United States Code, or any other provision of law, or         (ii)  receive any salary or benefits for service in any such capacity with respect to a bridge bank in addition to such salary or benefits as are obtained through employment with the Corporation or such Federal instrumentality.     (7)  ASSISTANCE AUTHORIZED.--The Corporation may, in its discretion, provide assistance under section 13(c) to facilitate any transaction described in clause (i), (ii), or (iii) of paragraph (10)(A) with respect to any bridge bank in the same manner and to the same extent as such assistance may be provided under such section with respect to an insured bank in default, or to facilitate a bridge bank's acquisition of any assets or the assumption of any liabilities of an insured bank in default.     (8)  ACQUISITION.--       (A)  IN GENERAL.--The responsible agency shall notify the Attorney General of any transaction involving the merger or sale of a bridge bank requiring approval under section 18(c) and if a report on competitive factors is requested within 10 days, such transaction may not be consummated before the 5th calendar day after the date of approval by the responsible agency with respect thereto. If the responsible agency has found that it must act {{10-31-94 p.1188.26}}immediately to prevent the probable failure of 1 of the banks involved, the preceding sentence does not apply and the transaction may be consummated immediately upon approval by the agency.       (B)  BY OUT-OF-STATE HOLDING COMPANY.--Any depository institution, including an out-of-State depository institution, or any out-of-State depository institution holding company may acquire and retain the capital stock or assets of, or otherwise acquire and retain a bridge bank if the bridge bank at any time had assets aggregating $500,000,000 or more, as determined by the Corporation on the basis of the bridge bank's reports of condition or on the basis of the last available reports of condition of any insured bank in default, which institution has been acquired, or whose assets have been acquired, by the bridge bank. The acquiring entity may acquire the bridge bank only in the same manner and to the same extent as such entity may acquire an insured bank in default under section 13(f)(2).     (9)  DURATION OF BRIDGE BANK.--Subject to paragraphs (11) and (12), the status of a bridge bank as such shall terminate at the end of the 2-year period following the date it was granted a charter. The Board of Directors may, in its discretion, extend the status of the bridge bank as such for 3 additional 1-year periods.     (10)  TERMINATION OF BRIDGE BANK STATUS.--The status of any bridge bank as such shall terminate upon the earliest of--       (A)  the merger or consolidation of the bridge bank with a depository institution that is not a bridge bank;       (B)  at the election of the Corporation, the sale of a majority of the capital stock of the bridge bank to an entity other than the Corporation and other than another bridge bank;       (C)  the sale of 80 percent, or more, of the capital stock of the bridge bank to an entity other than the Corporation and other than another bridge bank;       (D)  at the election of the Corporation, either the assumption of all or substantially all of the deposits and other liabilities of the bridge bank by a depository institution holding company or a depository institution that is not a bridge bank, or the acquisition of all or substantially all of the assets of the bridge bank by a depository institution holding company, a depository institution that is not a bridge bank, or other entity as permitted under applicable law; and       (E)  the expiration of the period provided in paragraph (9), or the earlier dissolution of the bridge bank as provided in paragraph (12).     (11)  EFFECT OF TERMINATION EVENTS.--       (A)  MERGER OR CONSOLIDATION.--A bridge bank that participates in a merger or consolidation as provided in paragraph (10)(A) shall be for all purposes a national bank with all the rights, powers, and privileges thereof, and such merger or consolidation shall be conducted in accordance with, and shall have the effect provided in, the provisions of applicable law.       (B)  CHARTER CONVERSION.--Following the sale of a majority of the capital stock of the bridge bank as provided in paragraph (10)(B), the Corporation may amend the charter of the bridge bank to reflect the termination of the status of the bridge bank as such, whereupon the bank shall remain a national bank, with all of the rights, powers, and privileges thereof, subject to all laws and regulations applicable thereto.       (C)  SALE OF STOCK.--Following the sale of 80 percent or more of the capital stock of a bridge bank as provided in paragraph (10)(C), the bank shall remain a national bank, with all of the rights, powers, and privileges thereof, subject to all laws and regulations applicable thereto.       (D)  ASSUMPTION OF LIABILITIES AND SALE OF ASSETS.-- Following the assumption of all or substantially all of the liabilities of the bridge bank, or the sale of all or substantially all of the assets of the bridge bank, as provided in paragraph (10)(D), at the election of the Corporation the bridge bank may retain its status as such for the period provided in paragraph (9). {{10-31-94 p.1188.27}}       (E)  EFFECT ON HOLDING COMPANIES.--A depository institution holding company acquiring a bridge bank under section 13(f), paragraph (8)(B) (or any predecessor provision), or both provisions, shall not be impaired or adversely affected by the termination of the status of a bridge bank as a result of subparagraph (A), (B), (C), or (D) of paragraph (10), and shall be entitled to the rights and privileges provided in section 13(f). {{4-28-06 p.1189}}       (F)  AMENDMENTS TO CHARTER.--Following the consummation of a transaction described in subparagraph (A), (B), (C), or (D) of paragraph (10), the charter of the resulting institution shall be amended to reflect the termination of bridge bank status, if appropriate.     (12)  DISSOLUTION OF BRIDGE BANK.--       (A)  IN GENERAL.--Notwithstanding any other provision of State or Federal law, if the bridge bank's status as such has not previously been terminated by the occurrence of an event specified in subparagraph (A), (B), (C), or (D) of paragraph (10)--         (i)  the Board of Directors may, in its discretion, dissolve a bridge bank in accordance with this paragraph at any time; and         (ii)  the Board of Directors shall promptly commence dissolution proceedings in accordance with this paragraph upon the expiration of the 2-year period following the date the bridge bank was chartered, or any extension thereof, as provided in paragraph (9).       (B)  PROCEDURES.--The Comptroller of the Currency shall appoint the Corporation receiver for a bridge bank upon certification by the Board of Directors to the Comptroller of the Currency of its determination to dissolve the bridge bank. The Corporation as such receiver shall wind up the affairs of the bridge bank in conformity with the provisions of law relating to the liquidation of closed national banks. With respect to any such bridge bank, the Corporation as such receiver shall have all the rights, powers, and privileges and shall perform the duties related to the exercise of such rights, powers, or privileges granted by law to a receiver of any insured depository institution and notwithstanding any other provision of law in the exercise of such rights, powers, and privileges the Corporation shall not be subject to the direction or supervision of any State agency or other Federal agency.     (13)  MULTIPLE BRIDGE BANKS.--Subject to paragraph (1)(B)(i), the Corporation may, in the Corporation's discretion, organize 2 or more bridge banks under this subsection to assume any deposits of, assume any other liabilities of, and purchase any assets of a single bank in default. [Codified to 12 U.S.C. 1821(n)] [Source:  Section 2[11(n)] of the Act of September 21, 1950 (Pub. L. No. 797), effective September 21, 1950, as added by section 214 of title II of the Act of August 9, 1989 (Pub. L. No. 101--73; 103 Stat. 246), effective August 9, 1989; as amended by section 161(a) of title I of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2285), effective December 19, 1991; section 602(a)(30) and (31) of title VI of the Act of September 23, 1994 (Pub. L. No. 103--325; 108 Stat. 2289), effective September 23, 1994]   (o)  SUPERVISORY RECORDS.--In addition to the requirements of section 7(a)(2) to provide to the Corporation copies of reports of examination and reports of condition, whenever the Corporation has been appointed as receiver for an insured depository institution, the appropriate Federal banking agency shall make available all supervisory records to the receiver which may be used by the receiver in any manner the receiver determines to be appropriate. [Codified to 12 U.S.C. 1821(o)] [Source:  Section 2[11(o)] of the Act of September 21, 1950 (Pub. L. No. 797), effective September 21, 1950, as added by section 909 of title IX of the Act of August 9, 1989 (Pub. L. No. 101--73; 103 Stat. 477), effective August 9, 1989]   (p)   CERTAIN SALES OF ASSETS PROHIBITED.--     (1)  Persons who engaged in improper conduct with, or caused losses to, depository institutions.--The Corporation shall prescribe regulations which, at a minimum, shall prohibit the sale of assets of a failed institution by the Corporation to--       (A)  any person who-- {{4-28-06 p.1190}}         (i)  has defaulted, or was a member of a partnership or an officer or director of a corporation that has defaulted, on 1 or more obligations the aggregate amount of which exceed $1,000,000, to such failed institution;         (ii)  has been found to have engaged in fraudulent activity in connection with any obligation referred to in clause (i); and         (iii)  proposes to purchase any such asset in whole or in part through the use of the proceeds of a loan or advance of credit from the Corporation or from any institution for which the Corporation has been appointed as conservator or receiver;       (B)  any person who participated, as an officer or director of such failed institution or of any affiliate of such institution, in a material way in transactions that resulted in a substantial loss to such failed institution;       (C)  any person who has been removed from, or prohibited from participating in the affairs of, such failed institution pursuant to any final enforcement action by an appropriate Federal banking agency; or       (D)  any person who has demonstrated a pattern or practice of defalcation regarding obligations to such failed institution.     (2)  CONVICTED DEBTORS.--Except as provided in paragraph (3), any person who--       (A)  has been convicted of an offense under section 215, 656, 657, 1005, 1006, 1007, 1008, 1014, 1032, 1341, 1343, or 1344 of title 18, United States Code, or of conspiring to commit such an offense, affecting any insured depository institution for which any conservator or receiver has been appointed; and       (B)  is in default on any loan or other extension of credit from such insured depository institution which, if not paid, will cause substantial loss to the institution, the deposit insurance fund, the Corporation, the FSLIC Resolution Fund, or the Resolution Trust Corporation, may not purchase any asset of such institution from the conservator or receiver.     (3)  SETTLEMENT OF CLAIMS.--Paragraphs (1) and (2) shall not apply to the sale or transfer by the Corporation of any asset of any insured depository institution to any person if the sale or transfer of the asset resolves or settles, or is part of the resolution or settlement, of--       (A)  1 or more claims that have been, or could have been, asserted by the Corporation against the person; or       (B)  obligations owed by the person to any insured depository institution, the FSLIC Resolution Fund, the Resolution Trust Corporation, or the Corporation.     (4)  DEFINITION OF DEFAULT.--For purposes of this subsection, the term "default" means a failure to comply with the terms of a loan or other obligation to such an extent that the property securing the obligation is foreclosed upon. [Codified to 12 U.S.C. 1821(p)] [Source:  Section 2[11(p)] of the Act of September 1, 1950 (Pub. L. No. 797), effective September 21, 1950, as added by section 2526(a) of title XXV of the Act of November 29, 1990 (Pub. L. No. 101--647; 104 Stat. 4875), effective November 29, 1990; amended by sections 20(a) and (b) of the Act of December 17, 1993 (Pub. L. No. 103--204; 107 Stat. 2404 and 2405), effective December 17, 1993; section 8(a)(14) of the Act of February 15, 2006 (Pub. L. No. 109--173; 119 Stat. 3612 and 3613), effective date shall take effect the day of the merger of the bank Insurance Fund and the Savings Association Insurance Fund pursuant to the Federal Deposit Insurance Reform Act of 2005] [Main Tabs]     [Table of Contents - 1000]     [Index]     [Previous Page]     [Next Page]     [Search]

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