Full text of Mimeograph Letters and Statements of the Board : Interpretation of Banking Act of 1933: Interest Payment on Renewal of Matured Certificate of Deposit, Number X-7970, Volume 41, Page 52

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X-7970
INTERPRETATION OF BANKING ACT OF 1953

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(Copies to be sent t o ' a l l Federal r e s e r v e banks)
J u l y 27, 1934.
Mr.
The

, Cashier
Bank of
,

Dear S i r :
Your l e t t e r of June 8, 1934, addressed t o t h e Comptroller of
t h e Currency, regarding t h e renewal of matured c e r t i f i c a t e s of d e p o s i t
has been r e f e r r e d to t h e Federal Reserve Board f o r r e p l y .
I t i s understood t h a t i n view of the f a c t t h a t many of t h e
customers of your bank are unable t o get i n t o town on the exact date of
the m a t u r i t i e s of t h e i r c e r t i f i c a t e s of d e p o s i t , you wish t o be advised
whether you may l a w f u l l y renew a c e r t i f i c a t e of deposit p r i o r t o i t s
m a t u r i t y , d a t i n g t h e new c e r t i f i c a t e as of the date of m a t u r i t y of t h e
original certificate*

I t i s noted t h a t you s t a t e t h a t a l l c e r t i f i c a t e s

presented a f t e r m a t u r i t y are renewed as of t h e date prese nted, and t h a t
i n t e r e s t i s paid only t o t h e date of m a t u r i t y of t h e o r i g i n a l c e r t i f i c a t e .
Upon the b a s i s of the information submitted i t appears t h a t t h e
p r a c t i c e which you suggest involves merely the making of a new c o n t r a c t
of d e p o s i t with r e s p e c t to the funds i n question which i s t o t a k e e f f e c t
on the d a t e of m a t u r i t y of t h e o r i g i n a l c e r t i f i c a t e and t h a t no p a r t of
the funds evidenced by t h e o r i g i n a l c e r t i f i c a t e i s withdrawn u n t i l t h e
m a t u r i t y of the renewal c e r t i f i c a t e .

There i s no p r o v i s i o n of law which

would preclude t h e adoption of t h i s procedure and the Federal Reserve
Board has no o b j e c t i o n t h e r e t o .




Very t r u l y yours,
(Signed)

Chester M o r r i l l

Chester M o r r i l l ,
Secretary.