---
kind: "section"
citation: "12 C.F.R. § 206.2"
title: "12"
number: "206.2"
heading: "Definitions."
url: "https://uscodex.org/cfr/12/206.2"
---

# §206.2. Definitions.


As used in this part, unless the context requires otherwise:

- (a) Bank means an insured depository institution, as defined in section 3 of the Federal Deposit Insurance Act ([12 U.S.C. 1813](/usc/12/1813.md)), and includes an insured national bank, state bank, District bank, or savings association, and an insured branch of a foreign bank.
- (b) Commonly-controlled correspondent means a correspondent that is commonly controlled with the bank and for which the bank is subject to liability under [section 5(e)](/cfr/12/5.md?p=e) of the Federal Deposit Insurance Act. A correspondent is considered to be commonly controlled with the bank if:
  - (1) 25 percent or more of any class of voting securities of the bank and the correspondent are owned, directly or indirectly, by the same depository institution or company; or
  - (2) Either the bank or the correspondent owns 25 percent or more of any class of voting securities of the other.
- (c) Correspondent means a U.S. depository institution or a foreign bank, as defined in this part, to which a bank has exposure, but does not include a commonly controlled correspondent.
- (d) Exposure means the potential that an obligation will not be paid in a timely manner or in full. “Exposure” includes credit and liquidity risks, including operational risks, related to intraday and interday transactions.
- (e) Foreign bank means an institution that: (1) Is organized under the laws of a country other than the United States;
  - (2) Engages in the business of banking;
  - (3) Is recognized as a bank by the bank supervisory or monetary authorities of the country of the bank's organization;
  - (4) Receives deposits to a substantial extent in the regular course of business; and
  - (5) **Has the power to accept demand deposits.**
- (f) **Primary federal supervisor—** has the same meaning as the term “appropriate Federal banking agency” in section 3 of the Federal Deposit Insurance Act ([12 U.S.C. 1813](/usc/12/1813.md)).
- (g) Total capital means the total of a bank's Tier 1 and Tier 2 capital under the risk-based capital guidelines provided by the bank's primary federal supervisor. For a qualifying community banking organization (as defined in [§ 217.12](/cfr/12/217.12.md) of this chapter) that is subject to the community bank leverage ratio framework (as defined in [§ 217.12](/cfr/12/217.12.md) of this chapter), total capital means the bank's Tier 1 capital (as defined in [§ 217.2](/cfr/12/217.2.md) of this chapter and calculated in accordance with [§ 217.12(b)](/cfr/12/217.12.md?p=b) of this chapter). For an insured branch of a foreign bank organized under the laws of a country that subscribes to the principles of the Basel Capital Accord, “total capital” means total Tier 1 and Tier 2 capital as calculated under the standards of that country. For an insured branch of a foreign bank organized under the laws of a country that does not subscribe to the principles of the Basel Capital Accord (Accord), “total capital” means total Tier 1 and Tier 2 capital as calculated under the provisions of the Accord.
- (h) U.S. depository institution means a bank, as defined in [§ 206.2(a)](#a) of this part, other than an insured branch of a foreign bank.

## Notes

### Amendments

[Reg. F, 57 FR 60106, Dec. 18, 1992, as amended at 68 FR 53283, Sept. 10, 2003; 84 FR 61796, Nov. 13, 2019]

### Authority

Authority: 12 U.S.C. 371b-2

### Source

Source: Reg. F, 57 FR 60106, Dec. 18, 1992, unless otherwise noted.

### Amendments

[Reg. F, 57 FR 60106, Dec. 18, 1992, as amended at 68 FR 53283, Sept. 10, 2003; 84 FR 61796, Nov. 13, 2019]