Subpart A General Provisions
Subpart B Capital Ratio Requirements and Buffers
Subpart C Definition of Capital
Subpart D Risk-Weighted Assets–standardized Approach
Subpart G Transition Provisions

Terms Used In 12 CFR Part 628

  • Actuarial services: means performance of actuarial valuations and preparation of any actuarial reports. See 20 CFR 901.1
  • Allegation: something that someone says happened.
  • Allocated equities: means stock or surplus representing a patronage payment to a member-borrower that a System institution has retained for the benefit of its membership. See 12 CFR 628.2
  • Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
  • Amortization: Paying off a loan by regular installments.
  • Answer: The formal written statement by a defendant responding to a civil complaint and setting forth the grounds for defense.
  • Appeal: A request made after a trial, asking another court (usually the court of appeals) to decide whether the trial was conducted properly. To make such a request is "to appeal" or "to take an appeal." One who appeals is called the appellant.
  • Appropriation: The provision of funds, through an annual appropriations act or a permanent law, for federal agencies to make payments out of the Treasury for specified purposes. The formal federal spending process consists of two sequential steps: authorization
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Assistant Attorney General: means the Assistant Attorney General, Civil Rights Division, United States Department of Justice. See 29 CFR 1615.103
  • Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
  • Auxiliary aids: means services or devices that enable persons with impaired sensory, manual, or speaking skills to have an equal opportunity to participate in, and enjoy the benefits of, programs or activities conducted by the Commission. See 29 CFR 1615.103
  • Bank holding company: means a bank holding company as defined in section 2 of the Bank Holding Company Act. See 12 CFR 628.2
  • Bank Holding Company Act: means the Bank Holding Company Act of 1956, as amended (12 U. See 12 CFR 628.2
  • Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
  • Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
  • Borrower stock: means the capital investment a borrower holds in a System institution in connection with a loan. See 12 CFR 628.2
  • Call Report: means reports of condition and performance, as described in subpart D of part 621 of this chapter. See 12 CFR 628.2
  • CFTC: means the U. See 12 CFR 628.2
  • Clean-up call: means a contractual provision that permits an originating System institution or servicer to call securitization exposures before their stated maturity or call date. See 12 CFR 628.2
  • Cleared transaction: means an exposure associated with an outstanding derivative contract or repo-style transaction that a System institution or clearing member has entered into with a central counterparty (that is, a transaction that a central counterparty has accepted). See 12 CFR 628.2
  • Clearing member: means a member of, or direct participant in, a CCP that is entitled to enter into transactions with the CCP. See 12 CFR 628.2
  • Clearing member client: means a party to a cleared transaction associated with a CCP in which a clearing member either acts as a financial intermediary with respect to the party or guarantees the performance of the party to the CCP. See 12 CFR 628.2
  • Collateral agreement: means a legal contract that specifies the time when, and circumstances under which, a counterparty is required to pledge collateral to a System institution for a single financial contract or for all financial contracts in a netting set and confers upon the System institution a perfected, first-priority security interest (notwithstanding the prior security interest of any custodial agent), or the legal equivalent thereof, in the collateral posted by the counterparty under the agreement. See 12 CFR 628.2
  • Commission: means the Equal Employment Opportunity Commission. See 29 CFR 1615.103
  • Commitment: means any legally binding arrangement that obligates a System institution to extend credit or to purchase assets. See 12 CFR 628.2
  • Commodity Exchange Act: means the Commodity Exchange Act of 1936 (7 U. See 12 CFR 628.2
  • Company: means a corporation, partnership, limited liability company, depository institution, business trust, special purpose entity, System institution, association, or similar organization. See 12 CFR 628.2
  • Complaint: A written statement by the plaintiff stating the wrongs allegedly committed by the defendant.
  • Complete complaint: means a written statement that contains the complainant's name and address and describes the Commission's actions in sufficient detail to inform the Commission of the nature and date of the alleged violation of section 504 or section 508. See 29 CFR 1615.103
  • Contract: A legal written agreement that becomes binding when signed.
  • Corporate exposure: means an exposure to a company that is not:

    (1) An exposure to a sovereign, the Bank for International Settlements, the European Central Bank, the European Commission, the International Monetary Fund, a multi-lateral development bank (MDB), a depository institution, a foreign bank, a credit union, or a public sector entity (PSE). See 12 CFR 628.2

  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Credit bureau: An agency that collects individual credit information and sells it for a fee to creditors so they can make a decision on granting loans. Typical clients include banks, mortgage lenders, credit card companies, and other financing companies. (Also commonly referred to as consumer-reporting agency or credit-reporting agency.) Source: OCC
  • Credit derivative: means a financial contract executed under standard industry credit derivative documentation that allows one party (the protection purchaser) to transfer the credit risk of one or more exposures (reference exposure(s)) to another party (the protection provider) for a certain period of time. See 12 CFR 628.2
  • Credit risk mitigant: means collateral, a credit derivative, or a guarantee. See 12 CFR 628.2
  • Credit Score: A number, roughly between 300 and 800, that measures an individual's credit worthiness. The most well-known type of credit score is the FICO score. This score represents the answer from a mathematical formula that assigns numerical values to various pieces of information in your credit report. Source: OCC
  • Credit union: means an insured credit union as defined under the Federal Credit Union Act (12 U. See 12 CFR 628.2
  • Credit-enhancing representations and warranties: means representations and warranties that are made or assumed in connection with a transfer of underlying exposures (including loan servicing assets) and that obligate a System institution to protect another party from losses arising from the credit risk of the underlying exposures. See 12 CFR 628.2
  • Custodian: means a company that has legal custody of collateral provided to a CCP. See 12 CFR 628.2
  • Dependent: A person dependent for support upon another.
  • Depository institution: means a depository institution as defined in section 3 of the Federal Deposit Insurance Act. See 12 CFR 628.2
  • Derivative contract: means a financial contract whose value is derived from the values of one or more underlying assets, reference rates, or indices of asset values or reference rates. See 12 CFR 628.2
  • Devise: To gift property by will.
  • Dodd-Frank Act: means the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Pub. See 12 CFR 628.2
  • Electronic and Information technology: Includes information technology and any equipment or interconnected system or subsystem of equipment that is used in the creation, conversion, or duplication of data or information. See 29 CFR 1615.103
  • Eligible credit derivative: means a credit derivative in the form of a credit default swap, nth-to-default swap, total return swap, or any other form of credit derivative approved by the FCA, provided that:

    (1) The contract meets the requirements of an eligible guarantee and has been confirmed by the protection purchaser and the protection provider. See 12 CFR 628.2

  • Eligible guarantee: means a guarantee from an eligible guarantor that:

    (1) Is written. See 12 CFR 628.2

  • Eligible servicer cash advance facility: means a servicer cash advance facility in which:

    (1) The servicer is entitled to full reimbursement of advances, except that a servicer may be obligated to make non-reimbursable advances for a particular underlying exposure if any such advance is contractually limited to an insignificant amount of the outstanding principal balance of that exposure. See 12 CFR 628.2

  • Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
  • Equity derivative contract: means an equity-linked swap, purchased equity-linked option, forward equity-linked contract, or any other instrument linked to equities that gives rise to similar counterparty credit risks. See 12 CFR 628.2
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Exposure: means an amount at risk. See 12 CFR 628.2
  • Facility: means all or any portion of buildings, structures, equipment, roads, walks, parking lots, rolling stock or other conveyances, or other real or personal property. See 29 CFR 1615.103
  • Farm Credit Act: means the Farm Credit Act of 1971, as amended (12 U. See 12 CFR 628.2
  • Federal Deposit Insurance Act: means the Federal Deposit Insurance Act (12 U. See 12 CFR 628.2
  • Federal Deposit Insurance Corporation: A government corporation that insures the deposits of all national and state banks that are members of the Federal Reserve System. Source: OCC
  • Federal Deposit Insurance Corporation Improvement Act: means the Federal Deposit Insurance Corporation Improvement Act of 1991 (12 U. See 12 CFR 628.2
  • Financial collateral: means collateral:

    (1) In the form of:

    (i) Cash on deposit at a depository institution or Federal Reserve Bank (including cash held for the System institution by a third-party custodian or trustee). See 12 CFR 628.2

  • First-lien residential mortgage exposure: means a residential mortgage exposure secured by a first lien. See 12 CFR 628.2
  • Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
  • Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
  • Foreign bank: means a foreign bank as defined in §211. See 12 CFR 628.2
  • Forward agreement: means a legally binding contractual obligation to purchase assets with certain drawdown at a specified future date, not including commitments to make residential mortgage loans or forward foreign exchange contracts. See 12 CFR 628.2
  • Fraud: Intentional deception resulting in injury to another.
  • GAAP: means generally accepted accounting principles as used in the United States. See 12 CFR 628.2
  • Gain-on-sale: means an increase in the equity capital of a System institution (as reported on the Call Report) resulting from a traditional securitization (other than an increase in equity capital resulting from the System institution's receipt of cash in connection with the securitization or reporting of a mortgage servicing asset on the Call Report). See 12 CFR 628.2
  • General obligation: means a bond or similar obligation that is backed by the full faith and credit of a public sector entity (PSE). See 12 CFR 628.2
  • Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
  • Grace period: The number of days you'll have to pay your bill for purchases in full without triggering a finance charge. Source: Federal Reserve
  • Guarantee: means a financial guarantee, letter of credit, insurance, or other similar financial instrument (other than a credit derivative) that allows one party (beneficiary) to transfer the credit risk of one or more specific exposures (reference exposure) to another party (protection provider). See 12 CFR 628.2
  • Guarantor: A party who agrees to be responsible for the payment of another party's debts should that party default. Source: OCC
  • Guardian: A person legally empowered and charged with the duty of taking care of and managing the property of another person who because of age, intellect, or health, is incapable of managing his (her) own affairs.
  • Has a record of such an impairment: means has a history of, or has been misclassified as having, a mental or physical impairment that substantially limits one or more major life activities. See 29 CFR 1615.103
  • Home country: means the country where an entity is incorporated, chartered, or similarly established. See 12 CFR 628.2
  • Individual with disabilities: means any person who has a physical or mental impairment that substantially limits one or more major life activities, has a record of such an impairment, or is regarded as having such an impairment. See 29 CFR 1615.103
  • Insurance company: means an insurance company as defined in section 201 of the Dodd-Frank Act (12 U. See 12 CFR 628.2
  • Insurance underwriting company: means an insurance company as defined in section 201 of the Dodd-Frank Act (12 U. See 12 CFR 628.2
  • Insured depository institution: means an insured depository institution as defined in section 3 of the Federal Deposit Insurance Act. See 12 CFR 628.2
  • Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
  • Interest rate derivative contract: means a single-currency interest rate swap, basis swap, forward rate agreement, purchased interest rate option, when-issued securities, or any other instrument linked to interest rates that gives rise to similar counterparty credit risks. See 12 CFR 628.2
  • International Lending Supervision Act: means the International Lending Supervision Act of 1983 (12 U. See 12 CFR 628.2
  • Investment fund: means a company:

    (1) Where all or substantially all of the assets of the company are financial assets. See 12 CFR 628.2

  • Investment grade: means that the entity to which the System institution is exposed through a loan or security, or the reference entity with respect to a credit derivative, has adequate capacity to meet financial commitments for the projected life of the asset or exposure. See 12 CFR 628.2
  • Junior-lien residential mortgage exposure: means a residential mortgage exposure that is not a first-lien residential mortgage exposure. See 12 CFR 628.2
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • Lien: A claim against real or personal property in satisfaction of a debt.
  • Litigation: A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
  • Major life activities: includes functions such as caring for one's self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and working. See 29 CFR 1615.103
  • Member: means a borrower or former borrower from a System institution that holds voting or nonvoting cooperative equities of the institution. See 12 CFR 628.2
  • Money market fund: means an investment fund that is subject to 17 CFR 270. See 12 CFR 628.2
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • National Bank: A bank that is subject to the supervision of the Comptroller of the Currency. The Office of the Comptroller of the Currency is a bureau of the U.S. Treasury Department. A national bank can be recognized because it must have "national" or "national association" in its name. Source: OCC
  • National Bank Act: means the National Bank Act (12 U. See 12 CFR 628.2
  • National Credit Union Administration: The federal regulatory agency that charters and supervises federal credit unions. (NCUA also administers the National Credit Union Share Insurance Fund, which insures the deposits of federal credit unions.) Source: OCC
  • Netting set: means a group of transactions with a single counterparty that are subject to a qualifying master netting agreement or a qualifying cross-product master netting agreement. See 12 CFR 628.2
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Operating entity: means a company established to conduct business with clients with the intention of earning a profit in its own right and that generally produces goods or provides services beyond the business of investing, reinvesting, holding, or trading in financial assets. See 12 CFR 628.2
  • Oversight: Committee review of the activities of a Federal agency or program.
  • Participation certificate: means borrower stock held by a borrower or customer of a System institution that does not have voting rights. See 12 CFR 628.2
  • Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
  • Patronage payment: means a cash declaration or equity allocation to member-borrowers that pursuant to Internal Revenue Code section 1381(a) is based on a System institution's net income and allocated to borrowers based on business conducted with the institution. See 12 CFR 628.2
  • Personal property: All property that is not real property.
  • physical or mental impairment: includes , but is not limited to, such diseases and conditions as orthopedic. See 29 CFR 1615.103
  • Presiding officer: A majority-party Senator who presides over the Senate and is charged with maintaining order and decorum, recognizing Members to speak, and interpreting the Senate's rules, practices and precedents.
  • Public law: A public bill or joint resolution that has passed both chambers and been enacted into law. Public laws have general applicability nationwide.
  • Publicly traded: means traded on:

    (1) Any exchange registered with the Securities and Exchange Commission (SEC) as a national securities exchange under section 6 of the Securities Exchange Act. See 12 CFR 628.2

  • Qualified allocated equities: means patronage allocated to a member-borrower, in the form of stock or surplus, that a System institution retains as equity for the benefit of the membership. See 12 CFR 628.2
  • Qualifying master netting agreement: means a written, legally enforceable agreement provided that:

    (1) The agreement creates a single legal obligation for all individual transactions covered by the agreement upon an event of default following any stay permitted by paragraph (2) of this definition, including upon an event of receivership, conservatorship, insolvency, liquidation, or similar proceeding, of the counterparty. See 12 CFR 628.2

  • Repo-style transaction: means a repurchase or reverse repurchase transaction, or a securities borrowing or securities lending transaction, including a transaction in which the System institution acts as agent for a customer and indemnifies the customer against loss, provided that:

    (1) The transaction is based solely on liquid and readily marketable securities, cash, or gold. See 12 CFR 628.2

  • Resecuritization: means a securitization which has more than one underlying exposure and in which one or more of the underlying exposures is a securitization exposure. See 12 CFR 628.2
  • Residential mortgage exposure: means an exposure (other than a securitization exposure or equity exposure) that is:

    (1) An exposure that is primarily secured by a first or subsequent lien on one-to-four family residential property, provided that the dwelling (including attached components such as garages, porches, and decks) represents at least 50 percent of the total appraised value of the collateral secured by the first or subsequent lien. See 12 CFR 628.2

  • Revenue obligation: means a bond or similar obligation that is an obligation of a PSE, but which the PSE is committed to repay with revenues from the specific project financed rather than general tax funds. See 12 CFR 628.2
  • Savings and loan holding company: means a savings and loan holding company as defined in section 10 of the Home Owners' Loan Act (12 U. See 12 CFR 628.2
  • Securities Exchange Act: means the Securities Exchange Act of 1934 (15 U. See 12 CFR 628.2
  • Servicer cash advance facility: means a facility under which the servicer of the underlying exposures of a securitization may advance cash to ensure an uninterrupted flow of payments to investors in the securitization, including advances made to cover foreclosure costs or other expenses to facilitate the timely collection of the underlying exposures. See 12 CFR 628.2
  • Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
  • Small Business Act: means the Small Business Act (15 U. See 12 CFR 628.2
  • Small Business Investment Act: means the Small Business Investment Act of 1958 (15 U. See 12 CFR 628.2
  • Sovereign: means a central government (including the U. See 12 CFR 628.2
  • Sovereign default: means noncompliance by a sovereign with its external debt service obligations or the inability or unwillingness of a sovereign government to service an existing loan according to its original terms, as evidenced by failure to pay principal and interest timely and fully, arrearages, or restructuring. See 12 CFR 628.2
  • Statute: A law passed by a legislature.
  • Subpoena: A command to a witness to appear and give testimony.
  • Synthetic exposure: means an exposure whose value is linked to the value of an investment in the System institution's own capital instrument. See 12 CFR 628.2
  • Synthetic securitization: means a transaction in which:

    (1) All or a portion of the credit risk of one or more underlying exposures is retained or transferred to one or more third parties through the use of one or more credit derivatives or guarantees (other than a guarantee that transfers only the credit risk of an individual retail exposure). See 12 CFR 628.2

  • System bank: means a Farm Credit Bank, an agricultural credit bank, and a bank for cooperatives. See 12 CFR 628.2
  • System institution: means a System bank, an association of the Farm Credit System, Farm Credit Leasing Services Corporation, and their successors, and any other institution chartered by the FCA that the FCA determines should be considered a System institution for the purposes of this part. See 12 CFR 628.2
  • Testimony: Evidence presented orally by witnesses during trials or before grand juries.
  • to-default credit derivative: means a credit derivative that provides credit protection only for the nth-defaulting reference exposure in a group of reference exposures. See 12 CFR 628.2
  • Total capital: means the sum of tier 1 capital and tier 2 capital. See 12 CFR 628.2
  • Traditional securitization: means a transaction in which:

    (1) All or a portion of the credit risk of one or more underlying exposures is transferred to one or more third parties other than through the use of credit derivatives or guarantees. See 12 CFR 628.2

  • Tranche: means all securitization exposures associated with a securitization that have the same seniority level. See 12 CFR 628.2
  • Two-way market: means a market where there are independent bona fide offers to buy and sell so that a price reasonably related to the last sales price or current bona fide competitive bid and offer quotations can be determined within 1 day and settled at that price within a relatively short timeframe conforming to trade custom. See 12 CFR 628.2
  • Underlying exposures: means one or more exposures that have been securitized in a securitization transaction. See 12 CFR 628.2