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FEDERAL RESERVE BANK
OF NEW YORK
f Circular No. 1 7 9 3 1
L November 5,1937 J

Classification of Deposits of Certain Organizations
as Savings Deposits

To Each Member Bank in the
Second Federal Reserve District:

For your information we transmit to you herewith a copy of a recent ruling
of the Board of Governors of the Federal Reserve System with respect to the
classification of deposits of certain organizations as savings deposits under the
definition in the Board's Regulation Q, which relates to payment of interest on deposits, and in its Regulation D, which relates to reserves of member banks.
Additional copies of this circular will be furnished upon request.




GEOBGE L. HAERISON,

President.

Classification of Deposits of Certain Organizations
as Savings Deposits
The definition of savings deposits in Regulation Q, which relates to payment of
interest on deposits, and in Regulation D, which relates to reserves of member banks,
reads in part as follows:
'' The term ' savings deposit' means a deposit, evidenced by a pass book, consisting of
funds (i) deposited to the credit of one or more individuals, or of a corporation, association or other organization operated primarily for religious, philanthropic, charitable,
educational, fraternal or other similar purposes and not operated for profit, or (ii) in
which the entire beneficial interest is held by one or more individuals or by such a
corporation, association or other organization, * * * . "
I t will be noted that under this definition member banks may classify deposits of
one or more individuals as savings deposits if the deposits comply in other respects

with the regulation; but they may not classify deposits of any corporation, association
or other organization as savings deposits unless (1) such organization is operated
primarily for religious, philanthropic, charitable, educational, fraternal or other similar purposes; (2) such organization is not operated for profit; and (3) such deposits
comply in other respects with the requirements of the regulation.
With respect to many organizations such as churches, charity hospital associations, fraternal orders and endowed educational institutions which are not operated
for profit, no questions have arisen since such organizations are obviously operated
for religious, philanthropic, charitable, educational, fraternal or other similar purposes. However, numerous questions have arisen as to whether deposits of certain
other types of organizations which are near the border-line of the definition may be
classified by member banks as savings deposits. The Board has given careful study
to these questions and has reached the conclusion that the types of organizations set
forth below may be considered to be operated primarily for religious, philanthropic,
charitable, educational, fraternal or other similar purposes and, therefore, that deposits of such organizations may be classified by member banks as savings deposits if
the organizations are not operated for profit and if the deposits otherwise comply with
the requirements of the definition.
Professional associations, such as bar, medical, and dentists' associations.
Trade associations, including manufacturers' associations, retailers' associations,
and chambers of commerce.
Business men's clubs, such as Rotary Clubs and Kiwanis Clubs.
Recreational clubs, such as golf and tennis clubs.
Social clubs, such as luncheon clubs and college fraternities.
Labor unions of the usual type.
Volunteer fire companies and ladies auxiliaries thereof.
Cemetery associations.
School districts.
Police or firemen's pension or relief associations (including a special fund held by a
political subdivision to provide pensions for police or firemen).
American Automobile Association, Retired Officers Association, and other similar
organizations.




The Board has also reached the conclusion that deposits of the organizations
listed below may not be classified by member banks as savings deposits either because
the organizations are not operated primarily for religious, philanthropic, charitable,
educational, fraternal or other similar purposes or because they are operated for
profit.
Building and loan associations.
Mutual or cooperative fire or life insurance associations.
Reciprocal or inter-insurance associations.
Cooperative marketing associations, such as citrus growers or dairymen's cooperative marketing associations.
Credit unions, Federal or State.
States and municipalities and other political subdivisions thereof (except school
districts) including departments, boards, and commissions of such political subdivisions.
Although deposits of the types of organizations listed immediately above may
not be classified by member banks as savings deposits for the purpose of payment of
interest or of computation of reserves, attention is invited to the fact that any of such
organizations may maintain time deposits with member banks. With respect to such
deposits, which may be either in the form of time certificates of deposit or time deposits open account, member banks may pay interest in accordance with the provisions of Regulation Q and maintain reserves in accordance with the provisions of
Regulation D relating to time deposits.
The above lists of organizations which may or may not maintain savings deposits
in member banks are not intended to be complete but merely contain examples compiled from various cases which have been submitted to the Board. Any necessary
inquiry as to the proper classification of other organizations for this purpose should
be submitted directly to the Federal Reserve bank of the district in which the inquiry
arises rather than to the Board. The Federal Reserve banks will, in so far as possible,
answer such questions in the light of the illustrative cases stated above.





Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102