[Code of Federal Regulations]
[Title 5, Volume 3]
[Revised as of January 1, 2008]
From the U.S. Government Printing Office via GPO Access
[CITE: 5CFR3201.102]

[Page 692-694]
 
                    TITLE 5--ADMINISTRATIVE PERSONNEL
 
           CHAPTER XXII--FEDERAL DEPOSIT INSURANCE CORPORATION
 
PART 3201_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 
 
Sec. 3201.102  Extensions of credit and loans from FDIC-insured institutions.

    (a) Credit subject to this section. The prohibition, 
disqualification, and retention provisions of this section apply to a 
current or contingent financial obligation of the employee. For purposes 
of this section, a current or contingent financial obligation of an 
employee's spouse or minor child is considered to be an obligation of 
the employee.
    (b) Disqualification applicable to FDIC employees generally. Except 
as provided in this section:
    (1) No FDIC employee may participate in an examination, audit, 
visitation, review, or investigation, or any other particular matter 
involving an FDIC-insured institution, subsidiary or other person with 
whom the employee has an outstanding extension of credit.
    (2) For employees, other than covered employees as defined in Sec. 
3201.101(d)(3), disqualification is not required if the credit was 
extended through the use of a credit card on the same terms and 
conditions as are offered to the general public.
    (3) The Comptroller of the Currency and the Director of the Office 
of Thrift Supervision shall be disqualified from any matter pending 
before the FDIC Board of Directors to the same extent as an FDIC 
employee subject to paragraph (c) of this section.
    (c) Prohibited borrowing by covered employees. (1) Prohibition on 
covered employee borrowing--Except as provided below, no covered 
employee shall, directly or indirectly, accept or become obligated on a 
loan or extension of credit, whether current or contingent, from any 
FDIC-insured State nonmember bank or its subsidiary or from an officer, 
director, or employee, of any FDIC-insured State nonmember bank or its 
subsidiary.
    (2) Exceptions: (i) Credit Cards. A covered employee (or spouse or 
minor child of a covered employee) may obtain and hold a credit card 
account established under an open end consumer credit plan and issued by 
an FDIC-insured State nonmember bank or its subsidiary subject to the 
following conditions:
    (A) The cardholder must satisfy all financial requirements for the 
credit card account that are generally applicable to all applicants for 
the same type of credit card account; and
    (B) The terms and conditions applicable with respect to the account 
and any credit extended to the cardholder under

[[Page 693]]

the account are no more favorable generally to the cardholder than the 
terms and conditions that are generally applicable to credit card 
accounts offered by the same bank (or the same subsidiary) to other 
cardholders in comparable circumstances under open end consumer credit 
plans.
    (ii) Loans secured primarily by principal residence. A covered 
employee (or a spouse or minor child of a covered employee) may obtain 
and hold a loan from an FDIC-insured State nonmember bank or its 
subsidiary subject to the following conditions:
    (A) The loan is secured by residential real property that is the 
principal residence of the borrower. The borrower may retain the loan if 
the residential real property ceases to be the principal residence. 
However, any subsequent renewal or renegotiation of the original terms 
of such a loan must meet the requirements of this paragraph;
    (B) The borrower may not apply for the loan while the covered 
employee participates in any examination, the review of any application, 
or any other supervisory or regulatory or other particular matter 
directly affecting the State nonmember bank or its subsidiaries;
    (C) The borrower must satisfy all financial requirements for the 
loan that are generally applicable to all applicants for the same type 
of residential real property loan; and
    (D) The terms and conditions applicable with respect to the loan and 
any credit extended to the borrower under the loan are no more favorable 
generally to the borrower than the terms and conditions that are 
generally applicable to residential real property loans offered by the 
same State nonmember bank or the same subsidiary to other borrowers in 
comparable circumstances for residential real property loans.
    (3) Disqualification of covered employees. A covered employee shall 
not participate in an examination, audit, visitation, review, or 
investigation, or other particular matter involving an FDIC-insured 
depository institution or other person with whom the covered employee 
has an outstanding extension of credit, or with whom the covered 
employee is negotiating an extension of credit.
    (i) Payment dispute, delinquency, or other significant matter 
concerning credit card debt. Disqualification is not required if the 
credit is extended through the use of a credit card. However, 
disqualification will be required when a covered employee is delinquent 
on payments, has a billing dispute, is negotiating with the institution, 
or has any other significant issue regarding the credit card debt. The 
covered employee must notify his or her supervisor and deputy ethics 
counselor of a dispute in writing.
    (ii) Primary residence mortgage loan. Disqualification will be 
required if the covered employee is negotiating for, has an application 
pending for, or enters into a primary residence mortgage loan. This 
disqualification will cease when the loan is sold, even if the loan 
originator retains the loan servicing.
    (4) Other limitations on covered employees. (i) A covered employee 
shall not accept or become obligated on an otherwise permissible loan if 
the disqualification arising from the credit relationship would 
materially impair the covered employee's ability to participate in 
matters that are central to the performance of the covered employee's 
official duties, or if the covered employee has been advised of an 
assignment to handle a matter involving that institution.
    (ii) Covered employees to whom the prohibitions in this section 
apply may not apply for a credit card or primary residence mortgage loan 
from a State nonmember bank or subsidiary that the covered employee is 
assigned to examine or participate in a matter involving that 
institution, or if such an assignment is imminent.
    (5) Pre-existing credit. (i) This section does not prohibit a 
covered employee, or any FDIC employee who becomes a covered employee as 
a result of any reassignment of duties or position, from retaining a 
loan or extension of credit from a State nonmember bank or its 
subsidiary on its original terms if the loan or extension of credit was 
incurred prior to employment by the FDIC or as a result of the sale or 
transfer of a loan or credit to a State nonmember bank or its subsidiary 
or the

[[Page 694]]

conversion or merger of the lender into a State nonmember bank or its 
subsidiary. Any renewal or renegotiation of a pre-existing loan or 
extension of credit will be treated as a new loan or extension of credit 
subject to the prohibitions at paragraphs (c)(3) and (c)(4) of this 
section.
    (ii) A covered employee may request that an exception be made to the 
prohibitions to permit renegotiation of a pre-existing loan or extension 
of credit. If a covered employee would experience financial or other 
hardship unless allowed to renegotiate a pre-existing loan or extension 
of credit, the covered employee may submit a written request to his or 
her supervisor and to the Ethics Counselor, describing the reasons for 
renegotiation, the original and the proposed terms and conditions, 
including whether the financial institution makes such terms generally 
available to the public, and any attempts by the covered employee to 
move the loan to a non-prohibited source. After consideration of the 
request, the covered employee's supervisor and the Ethics Counselor 
jointly may grant the waiver upon a finding that renegotiation is not 
prohibited by law, and that the waiver does not result in a loss of 
impartiality or objectivity or in misuse of the employee's position. To 
be effective, the waiver must be in writing.
    (d) Two-year prohibition on acceptance of credit from an FDIC-
insured depository institution. An FDIC employee shall not, directly or 
indirectly, accept or become obligated on any extension of credit from 
an FDIC-insured depository institution or its subsidiary for a period of 
two years from the date of the employee's last personal and substantial 
participation in an audit, resolution, liquidation, assistance 
transactions, supervisory proceeding, or internal agency deliberation 
affecting that particular institution, its predecessor or successor, or 
any subsidiary of such institution. This prohibition does not apply to 
credit obtained through the use of a credit card or a residential real 
property loan secured by the principal residence of the employee, 
subject to the same conditions, limitations, disqualification, and 
waiver procedures applicable to covered employees under paragraphs (c) 
and (e) of this section.
    (e) Waiver. The Ethics Counselor may grant a written waiver from any 
provision of this section based on a determination made with the advice 
and legal clearance of the Legal Division that the waiver is not 
inconsistent with part 2635 of this title or otherwise prohibited by 
law, and that, under the particular circumstances, application of the 
prohibition is not necessary to avoid the appearance of misuse of 
position or loss of impartiality, or otherwise to ensure confidence in 
the impartiality and objectivity with which the FDIC's programs are 
administered. A waiver under this paragraph may impose appropriate 
conditions, such as requiring execution of a written disqualification.

[72 FR 19378, Apr. 18, 2007]