PART 336—FDIC EMPLOYEES Source: 61 FR 28728, June 6, 1996, unless otherwise noted. Subpart A—Employee Responsibilities and Conduct Authority: 5 U.S.C. 7301; 12 U.S.C. 1819(a). § 336.1 Cross-reference to employee ethical conduct standards and financial disclosure regulations. Employees of the Federal Deposit Insurance Corporation (Corporation) are subject to the Executive Branch-wide Standards of Ethical Conduct at 5 CFR part 2635, the Corporation regulation at 5 CFR part 3201 which supplements the Executive Branch-wide Standards, the Executive Branch-wide financial disclosure regulations at 5 CFR part 2634, and the Corporation regulation at 5 CFR part 3202, which supplements the Executive Branch-wide financial disclosure regulations. Subpart B—Minimum Standards of Fitness for Employment With the Federal Deposit Insurance Corporation Authority: 12 U.S.C. 1819 (Tenth), 1822(f). § 336.2 Authority, purpose and scope. (a) Authority. (b) Purpose. (c) Scope. (2) In addition, this part applies to all employees of the FDIC who serve under an appointing authority under chapter 21 of title 5 of the U.S. Code. (3) Further, this part applies to any individual who, pursuant to a contract or any other arrangement, performs functions or activities of the Corporation, under the direct supervision of an officer or employee of the Corporation. § 336.3 Definitions. For the purposes of this part: (a) Company (b) Control (c) Default on a material obligation (d) Employee (e) Federal banking agency (f) Federal deposit insurance fund (g) FDIC (h) Insured depository institution (i) Pattern or practice of defalcation regarding obligations (1) A history of financial irresponsibility with regard to debts owed to insured depository institutions which are in default in excess of $50,000 in the aggregate. Examples of such financial irresponsibility include, without limitation: (i) Failure to pay a debt or debts totalling more than $50,000 secured by an uninsured property which is destroyed; or (ii) Abuse of credit cards or incurring excessive debt well beyond the individual's ability to repay resulting in default(s) in excess of $50,000 in the aggregate. (2) Wrongful refusal to fulfill duties and obligations to insured depository institutions. Examples of such wrongful refusal to fulfill duties and obligations include, without limitation: (i) Any use of false financial statements; (ii) Misrepresentation as to the individual's ability to repay debts; (iii) Concealing assets from the insured depository institution; (iv) Any instance of fraud, embezzlement or similar misconduct in connection with an obligation to the insured depository institution; and (v) Any conduct described in any civil or criminal judgment against an individual for breach of any obligation, contractual or otherwise, or any duty of loyalty or care that the individual owed to an insured depository institution. (3) Defaults shall not be considered a pattern or practice of defalcation where the defaults are caused by catastrophic events beyond the control of the employee such as death, disability, illness or loss of financial support. (j) Substantial loss to federal deposit insurance funds Substantial loss to federal deposit insurance funds (i) A loan or advance from an insured depository institution, which is now owed to the FDIC, RTC, FSLIC or their successors, or any federal deposit insurance fund, that is delinquent for ninety (90) or more days as to payment of principal, interest, or a combination thereof and on which there remains a legal obligation to pay an amount in excess of $50,000; or (ii) A final judgment in excess of $50,000 in favor of any federal deposit insurance fund, the FDIC, RTC, FSLIC, or their successors regardless of whether it becomes forgiven in whole or in part in a bankruptcy proceeding. (2) For purposes of computing the $50,000 ceiling in paragraphs (j)(1)(i) and (ii) of this section, all delinquent judgments, loans, or advances currently owed to the FDIC, RTC, FSLIC or their successors, or any federal deposit insurance fund, shall be aggregated. In no event shall delinquent loans or advances from different insured depository institutions be separately considered. [61 FR 28728, June 6, 1996, as amended at 71 FR 20526, Apr. 21, 2006; 79 FR 42183, July 21, 2014] § 336.4 Minimum standards for appointment to a position with the FDIC. (a) No person shall become employed on or after June 18, 1994, by the FDIC or otherwise perform any service for or on behalf of the FDIC who has: (1) Been convicted of any felony; (2) Been removed from, or prohibited from participating in the affairs of, any insured depository institution pursuant to any final enforcement action by any appropriate federal banking agency; (3) Demonstrated a pattern or practice of defalcation regarding obligations to insured depository institutions; or (4) Caused a substantial loss to federal deposit insurance funds. (b) Prior to an offer of employment, any person applying for employment with the FDIC shall sign a certification of compliance with the minimum standards listed in paragraphs (a)(1) through (4) of this section. In addition, any person applying for employment with the FDIC shall provide as an attachment to the certification any instance in which the applicant, or a company under the applicant's control, defaulted on a material obligation to an insured depository institution within the preceding five years. (c) Incumbent employees who separate from the FDIC and are subsequently reappointed after a break in service of more than three days are subject to the minimum standards listed in paragraphs (a)(1) though (4) of this section. The former employee is required to submit a new certification statement including attachments, as provided in paragraph (b) of this section, prior to appointment to the new position. § 336.5 Minimum standards for employment with the FDIC. (a) No person who is employed by the FDIC shall continue in employment in any manner whatsoever or perform any service for or on behalf of the FDIC who, beginning June 18, 1994 and thereafter: (1) Is convicted of any felony; (2) Is prohibited from participating in the affairs of any insured depository institution pursuant to any final enforcement action by any appropriate federal banking agency; (3) Demonstrates a pattern or practice of defalcation regarding obligations to insured depository institution(s); or (4) Causes a substantial loss to federal deposit insurance funds. (b) Any noncompliance with the standards listed in paragraphs (a)(1) through (4) of this section is a basis for removal from employment with the FDIC. § 336.6 Verification of compliance. The FDIC's Division of Administration shall order appropriate investigations as authorized by 12 U.S.C. 1819 and 1822 on newly appointed employees, either prior to or following appointment, to verify compliance with the minimum standards listed under § 336.4(a)(1) through (4). § 336.7 Employee responsibility, counseling and distribution of regulation. (a) Each employee is responsible for being familiar with and complying with the provisions of this part. (b) The Ethics Counselor shall provide a copy of this part to each new employee within 30 days of initial appointment. (c) An employee who believes that he or she may not be in compliance with the minimum standards provided under § 336.5(a)(1) through (4), or who receives a demand letter from the FDIC for any reason, shall make a written report of all relevant facts to the Ethics Counselor within ten (10) business days after the employee discovers the possible noncompliance, or after the receipt of a demand letter from the FDIC. (d) The Ethics Counselor shall provide guidance to employees regarding the appropriate statutes, regulations and corporate policies affecting employee's ethical responsibilities and conduct under this part. (e) The Ethics Counselor shall provide the Personnel Services Branch with notice of an employee's noncompliance. § 336.8 Sanctions and remedial actions. (a) Any employee found not in compliance with the minimum standards except as provided in paragraph (b) of this section below shall be terminated and prohibited from providing further service for or on behalf of the FDIC in any capacity. No other remedial action is authorized for sanctions for noncompliance. (b) Any employee found not in compliance with the minimum standards under § 336.5(a)(3) based on financial irresponsibility as defined in § 336.3(i)(1) shall be terminated consistent with applicable procedures and prohibited from providing future services for or on behalf of the FDIC in any capacity, unless the employee brings him or herself into compliance with the minimum standards as provided in paragraphs (b)(1) and (2) of this section. (1) Upon written notification by the Corporation of financial irresponsibility, the employee will be allowed a reasonable period of time to establish an agreement that satisfies the creditor and the FDIC as to resolution of outstanding indebtedness or otherwise resolves the matter to the satisfaction of the FDIC prior to the initiation of a termination action. (2) As part of the agreement described in paragraph (b)(1) of this section, the employee shall provide authority to the creditor to report any violation by the employee of the terms of the agreement directly to the FDIC Ethics Counselor. § 336.9 Finality of determination. Any determination made by the FDIC pursuant to this part shall be at the FDIC's sole discretion and shall not be subject to further review. Subpart C—One-Year Restriction on Post-Employment Activities of Senior Examiners Source: 70 FR 69639, Nov. 17, 2005, unless otherwise noted. Authority: 12 U.S.C. 1819 and 1820(k). § 336.10 Purpose and scope. This subpart applies to officers or employees of the FDIC who are subject to the post-employment restrictions set forth in section 10(k) of the Federal Deposit Insurance Act, 12 U.S.C. 1820(k), and implements those restrictions as they apply to officers and employees of the FDIC. § 336.11 Definitions. For purposes of this subpart: (a) Bank holding company (b) A consultant (c) Control (d) Depository institution (e) Foreign bank (f) Savings and loan holding company (g) A senior examiner (1) who has been authorized by the FDIC to conduct examinations or inspections of insured depository institutions on behalf of the FDIC; (2) who has been assigned continuing, broad, and lead responsibility for the examination or inspection of the institution; (3) who routinely interacts with officers or employees of the institution or its affiliates; and (4) whose responsibilities with respect to the institution represent a substantial portion of the FDIC officer or employee's overall responsibilities. § 336.12 One-year post-employment restriction. (a) Prohibition. (1) The insured depository institution; or (2) Any company (including a bank holding company or savings and loan holding company) that controls such institution. (b) Waivers. (c) Effective Date. § 336.13 Penalties. (a) Penalties under section 10(k) of the FDI Act. (1) An order— (i) Removing such person from office or prohibiting such person from further participation in the affairs of the relevant insured depository institution or company (including a bank holding company or savings and loan holding company) that controls such institution for a period of up to five years, and (ii) Prohibiting any further participation by such person, in any manner, in the affairs of any insured depository institution for a period of up to five years; or (2) A civil monetary penalty of not more than $250,000; or (3) Both. (b) Enforcement by appropriate Federal banking agency of hiring entity. (c) Scope of prohibition orders. (d) Other penalties.