[Code of Federal Regulations]
[Title 12, Volume 2, Parts 200 to 219]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 12CFR208.77]

[Page 203]
 
                       TITLE 12--BANKS AND BANKING
 
                   CHAPTER II--FEDERAL RESERVE SYSTEM
 
PART 208--MEMBERSHIP OF STATE BANKING INSTITUTIONS IN THE FEDERAL RESERVE SYSTEM (REGULATION H)--Table of Contents
 
         Subpart G--Financial Subsidiaries of State Member Banks
 
Sec. 208.77  Definitions.

    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) 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.
    (d) Financial Subsidiary. The term ``financial subsidiary'' means 
any company that is controlled by one or more insured depository 
institutions other than:
    (1) A subsidiary that only engages 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
    (2) 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. 321 et seq.)), 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 12 U.S.C. 611-631) or 
the Bank Service Company Act (12 U.S.C. 1861 et seq.).
    (e) 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.
    (f) Well Capitalized. The term ``well capitalized'' has the meaning 
given the term in section 38 of the Federal Deposit Insurance Act (12 
U.S.C. 1831.).
    (g) Well Managed. The term ``well managed'' means:
    (1) 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) in connection with 
its most recent examination or subsequent review and at least a rating 
of 2 for management (if such rating is given); or
    (2) In the case of any depository institution that has not been 
examined by its appropriate Federal banking agency, the existence and 
use of managerial resources that the appropriate Federal banking agency 
determines are satisfactory.

[Reg. H, 65 FR 14814, 15052, Mar. 20, 2000]