Pattern or Practice of Defalcation Regarding Obligations Law and Legal Definition

According to 12 CFR 336.3 [Title 12 -- Banks and Banking; Chapter III -- Federal Deposit Insurance Corporation; Subchapter B -- Regulations and Statements of General Policy; Part 336 -- FDIC Employees; Subpart B -- Minimum Standards of Fitness for Employment With the Federal Deposit Insurance Corporation], pattern or practice of defalcation regarding obligations means:

“(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.”