Failed Institution Law and Legal Definition

According to 12 CFR 340.2 [Title 12 - Banks and Banking; Chapter III - Federal Deposit Insurance Corporation; Subchapter B - Regulations And Statements Of General Policy; Part 340 -- Restrictions On Sale Of Assets By The Federal Deposit Insurance Corporation], failed institution means “any bank or savings association that has been under the conservatorship or receivership of the FDIC (Federal Deposit Insurance Corporation) or RTC (Resolution Trust Corporation.) For the purpose of this part, "failed institution" includes any entity owned and controlled by a failed institution.”