Definitions relating to default

The term “default” means, with respect to an insured depository institution, any adjudication or other official determination by any court of competent jurisdiction, the appropriate Federal banking agency, or other public authority pursuant to which a conservator, receiver, or other legal custodian is appointed for an insured depository institution or, in the case of a foreign bank having an insured branch, for such branch.

The term “in danger of default” means an insured depository institution with respect to which (or in the case of a foreign bank having an insured branch, with respect to such insured branch) the appropriate Federal banking agency or State chartering authority has advised the Corporation (or, if the appropriate Federal banking agency is the Corporation, the Corporation has determined) that—

(A) in the opinion of such agency or authority— (i) the depository institution or insured branch is not likely to be able to meet the demands of the institution’s or branch’s depositors or pay the institution’s or branch’s obligations in the normal course of business; and (ii) there is no reasonable prospect that the depository institution or insured branch will be able to meet such demands or pay such obligations without Federal assistance; or

(B) in the opinion of such agency or authority— (i) the depository institution or insured branch has incurred or is likely to incur losses that will deplete all or substantially all of its capital; and (ii) there is no reasonable prospect that the capital of the depository institution or insured branch will be replenished without Federal assistance.