Restricted activities for critically undercapitalized institutions.

CFR · 2024-01-01 · US · Title 12

(a) (b) (1) Enter into any material transaction other than in the usual course of business including any action with respect to which the institution is required to provide notice to the appropriate federal banking agency. Materiality will be determined on a case-by-case basis; (2) Extend credit for any highly leveraged transaction. A highly leveraged transaction means an extension of credit to or investment in a business by an insured depository institution where the financing transaction involves a buyout, acquisition, or recapitalization of an existing business and one of the following criteria is met: (i) The transaction results in a liabilities-to-assets leverage ratio higher than 75 percent; or (ii) The transaction at least doubles the subject company's liabilities and results in a liabilities-to-assets leverage ratio higher than 50 percent; or (iii) The transaction is designated an highly leverage transaction by a syndication agent or a federal bank regulator. (iv) Loans and exposures to any obligor in which the total financing package, including all obligations held by all participants is $20 million or more, or such lower level as the FDIC may establish by order on a case-by-case basis, will be excluded from this definition. (3) Amend the institution's charter or bylaws, except to the extent necessary to carry out any other requirement of any law, regulation, or order; (4) Make any material change in accounting methods; (5) Engage in any covered transaction (as defin

official document · source cfr-2024 · id 12:§ 303.207