[Code of Federal Regulations]
[Title 16, Volume 1]
[Revised as of January 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 16CFR802.63]

[Page 612-613]
 
                     TITLE 16--COMMERCIAL PRACTICES
 
                   CHAPTER I--FEDERAL TRADE COMMISSION
 
PART 802_EXEMPTION RULES--Table of Contents
 
Sec. 802.63  Certain acquisitions by creditors and insurers.

    (a) Creditors. An acquisition of collateral or receivables, or an 
acquisition in foreclosure, or upon default, or in connection with the 
establishment of a lease financing, or in connection with a bona fide 
debt work-out shall be exempt from the requirements of the act if made 
by a creditor in a bona fide

[[Page 613]]

credit transaction entered into in the ordinary course of the creditor's 
business.
    (b) Insurers. An acquisition pursuant to a condition in a contract 
of insurance relating to fidelity, surety, or casualty obligations shall 
be exempt from the requirements of the act if made by an insurer in the 
ordinary course of business.

    Examples: 1. A bank makes a loan and takes actual or constructive 
possession of collateral in any form. Since the bank is not the 
beneficial owner of the collateral, the bank's receipt of it is not an 
acquisition which is subject to the requirements of the act. However, if 
upon default the bank becomes the beneficial owner of the collateral, 
that acquisition is exempt under this section.
    2. This section exempts only the acquisition by the creditor or 
insurer, and not the subsequent disposition of the assets or voting 
securities. If a creditor or insurer sells voting securities or assets 
that have come into its possession in a transaction which is exempt 
under this section, the requirements of the act may apply to that 
disposition.