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federal reserve
Bank
DALLAS, TEXAS
of
Dallas
7S222
Circular No. 82-161
December 8, 1982
REGULATION D
RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS
(Booklet)
TO ALL DEPOSITORY INSTITUTIONS
AND OTHERS CONCERNED IN THE
ELEVENTH FEDERAL RESERVE DISTRICT:
Enclosed is a copy o f "R eserve Requirements", a com p ilation o f
m aterials needed to com ply with R egulation D, including a copy o f the regulation
its e lf.
This booklet was prepared as a r e fe r e n c e docum ent for all depository
in stitu tion s and contains no new regulatory language. It is designed to put all o f
the m aterial into one package, to g eth e r with an index and an easy-to-u nderstand
summary o f the regulation.
Additional cop ies o f this circular will be furnished upon request to the
D ep artm en t o f C om m unications, Financial and Com m unity A ffairs, Extension 6289.
S incerely yours,
William H. W allace
First Vice President
Enclosure
Banks and others are encouraged to use the following incoming WATS numbers in contacting this Bank:
1-800-442-7140 (intrastate) and 1-800-527-9200 (interstate). For calls placed locally, please use 651 plus the
extension referred to above.
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
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Table of Contents
IN T R O D U C T IO N
R E S E R V E A N D R E P O R T IN G
R E Q U IR E M E N T S F O R
D E P O S IT O R Y IN S T IT U T IO N S
A P P E N D IX A
A P P E N D IX B
1
WHO IS COVERED?
2
REPORTING OF DEPOSITS AND
REQUIREMENTS FOR MAIN
TAINING RESERVES
2
RESERVE REQUIREMENTS
2
Transaction Accounts
Nonpersonal Time Deposits
Eurocurrency Deposits
Supplemental Reserves
2
2
3
3
PHASE-IN O F RESERVE
REQUIREMENTS
3
Nonmembers
Member Banks
3
4
WHAT FUNDS QUALIFY AS
RESERVES
4
PASS-THROUGH ACCOUNTS
AND CORRESPONDENTS
4
The Duties of a Pass-Through
Correspondent
Decisions Correspondents
Must Make
4
REGULATION D, RESERVE R E
QUIREMENTS OF DEPOSITORY
INSTITUTIONS
5
QUESTIONS AND ANSWERS
ABOUT REGULATION D
4
28
A P P E N D IX C
SAMPLE REPORTING FORMS AND
42
SUMMARY INSTRUCTIONS
A P P E N D IX D
1981 REPORTING AND MAINTE
NANCE SCHEDULES FOR MEMBER
AND NONMEMBER QUARTERLY
53
RESPONDENTS
F ed er a l R e se r v e P u b lic a tio n
R ev ised E ffe c tiv e A p r il 2 9 , 1982
INTRODUCTION
The Depository Institutions
Deregulation and Monetary Control
Act of 1980 (P.L. 96-221), enacted on
March 31, 1980, brings about a
number of changes in the way finan
cial institutions and the Federal
Reserve System do business. First, it
applies uniform reserve requirements,
set by the Federal Reserve Board
within limits specified by the Act, to
all depository institutions with certain
types of accounts and requires re
ports from these depository institutions.
In general, reserve requirement ratios
are lower now for all depository in
stitutions than they were prior to the
Act for banks that were members of
the Federal Reserve System. The Act
also extends access to the Federal
Reserve discount window and to
other Federal Reserve services in step
with implementation of a fee
schedule; provides for the gradual
phase-out of interest rate ceilings on
time and savings deposits; and
broadens the powers of depository in
stitutions, permitting them all to of
fer accounts similar to checking ac
counts.
Taken together, these provisions of
the Act serve two vital purposes. The
first is competitive equity among
financial institutions, which, given
uniform reserve requirements, will be
placed on a more equal footing and,
given these new authorities, will be
able to offer more equivalent services
to their customers. The second p u r
pose is improvement of the ef
fectiveness of monetary policy by
making the fulcrum on which that
policy operates more stable.
The regulation governing Federal
reserve requirements is Regulation D,
which is contained in an appendix of
this publication. Sample reporting
forms and summary instructions,
questions and answers about the
regulation, and reserve maintenance
schedules are contained in separate
appendices. The body of the
publication explains briefly the
requirements of Regulation D: what
accounts must be backed by reserves;
what reports are required; what funds
qualify as reserves; and how the new.
requirements will be phased-in.
A p r il, 1982
1
RESERVE AND REPORTING REQUIREMENTS
FOR DEPOSITORY INSTITUTIONS
W H O IS C O V E R E D ?
Regulation D imposes uniform
Federal reserve requirements on all
depository institutions — including
commercial banks, savings banks,
savings and loan associations, credit
unions, and industrial banks — that
have transaction accounts or non
personal time deposits. Under the
terms of the International Banking
Act of 1978, the same reserve
requirements are also extended to
U.S. agencies and branches of foreign
banks. The revised reserve require
ment rules also affect Edge Act and
Agreement corporations.
Regulation D implements the nation
wide reserve requirements established
by the Federal Reserve. States may
require their own reserves. In many
cases, State authorities have per
mitted funds used to satisfy the
Federal reserve requirement to be
used to satisfy the State reserve
requirement.
R E P O R T IN G O F D E P O S IT S A N D
R E Q U IR E M E N T S F O R M A IN
T A IN IN G R ESER V ES
Depository institutions subject to re
serves are required to report certain
deposits directly to the Federal Re
serve and to maintain reserves on some
of these deposits. Based on the in
formation reported, the Federal
Reserve calculates each institution’s
required reserves and notifies the in
stitution of its requirement.
tain reserves on a quarterly rather
than a weekly basis.
• Nonmember institutions with total
deposits of less than $2 million do
not have to report or maintain
reserves at least until the end of
1982.
Quarterly reporters are divided into
three groups. The 1982 staggered
reporting and reserve maintenance
schedule for member and nonmember
quarterly reporters is contained in
Appendix D.
RESERVE REQUIREMENTS
The new Regulation D distinguishes
between two general types of accounts:
transaction accounts and time deposits.
Transaction accounts are those used
to make payments to others. They in
clude checking accounts, NOW ac
counts, share draft accounts, savings
accounts that allow automatic trans
fers or payments by automated teller
machines, and accounts that permit
more than three telephone or
preauthorized payments each month.
Time deposits, as defined by Regula
tion D, are deposits or certificates
with original maturities of at least
14 days and savings accounts (includ
ing regular share accounts at credit
unions and regular accounts at other
thrift institutions) that allow the in
stitution to require a least 14 days’
notice before a withdrawal is made.
The reserve requirements for trans-
• Institutions with total deposits of
$15 million or more report and
maintain reserves weekly.1
• Member banks with total deposits
of less than $15 million and non
member institutions with deposits
of $2 million or more but less
than $15 million report and main*Edge Act a n d A g reem en t c o r p o r a tio n s and U.S.
agencies and b r a n c h e s o f foreign b a n k s also report
and m a in ta in reserves weekly.
2
action accounts and those for time
deposits are summarized in separate
tables below.
T ransaction A ccounts
The amount of reserves required on
transaction accounts is determined by
multiplying the net amount of the
transaction balances held in the
financial institution by the reserve
ratio set by the Federal Reserve. Net
transaction balances are total trans
action balances minus cash items in
the process of collection and minus
subject to immediate withdrawal bal
ances due from depository institutions
in this country. The reserve ratio is 3
percent of the first $26 million of net
transaction balances and 12 percent of
the rest.
N onpersonal T im e D eposits
The amount of reserves required on
time deposits is more complicated to
determine, and the regulation itself
should be consulted. Time deposits
with original maturities of 3 Vi years
or more do not have to be backed by
reserves. Those with shorter m aturi
ties may have to be backed by re
serves, depending on the transfera
bility of the account and on the
type of depositor. Nontransferable
time deposits (including personal
savings deposits) with maturities of
less than 3'/2 years do not have to
be backed by reserves when they are
owned by natural persons. (A natural
person is an individual or a sole
proprietorship.) Nonpersonal time
R E SE R V E S R E Q U IR E D FO R T R A N SA C T IO N A C C O U N TS
An institution with this amount
of net transaction balances. . .
. . .must keep this portion in
cash or in a reserve account.
$26 million or less
3%
Over $26 million
3% of first $26 million
plus 12% of the rest
RESERVES REQUIRED FOR TIME DEPOSITS
. . .must be backed by
reserves equal to this
portion of the deposits
that are transferable. .
. . .and by this portion of
the deposits that are not
transferable (including per
sonal savings deposits). . .
Less than 3!/2 years
3%
0%
m
0%
0%
Less than 3 lA years
3%
3%
3 !/2 years or more
0%
0%
Time deposits held by
this type of depositor. . .
. . .which have this
length of maturity. . .
Individuals
(Natural persons,
sole proprietors)
years or more
Businesses
(partnerships, corpora
tions, nonprofit organi
zations, governmental
units)
deposits owned by anyone else,
however, are subject to a 3 percent
reserve requirement.
made by overseas branches of dom
estic depository institutions; and sales
of assets by depository institutions in
the United States to their overseas of
fices or own IBF.
will be paid on supplemental reserves.
P H A SE -IN O F R ESER V E
R E Q U IR E M E N T S
Eurocurrency Liabilities
N onm em bers
The Board has set a 3 percent re
serve requirement on certain Euro
currency liabilities (the same ratio
as on nonpersonal time deposits).
These are deposits arising from : net
borrowings from related foreign of
fices and own IBF; gross borrowings
from unrelated foreign depository in
stitutions; loans to U.S. residents
Supplem ental Reserves
Under certain conditions, and after
consultation with other depository in
stitution regulators, the Board is auth
orized to impose a supplemental re
serve requirement of not more than 4
percent of its transaction accounts on
every depository institution. Interest
For most nonmember commercial
banks and thrift institutions, reserve re
quirements are phased in over an eightyear period, beginning with one-eighth
of the full reserve requirement in
November 1980 and increasing by
one-eighth in September of each year
after 1980.
P H A SE -IN SC H E D U L E FO R N O N M E M B E R S
During the period from. . .
November 13, 1980
September 3, 1981
September 2, 1982
September I, 1983
September 6, 1984
September 5, 1985
September 4, 1986
. . .through. . .
. . .nonmembers must meet
this much of their full
reserve requirement.
September 2, 1981
September 1, 1982
August 31, 1983
September 5, 1984
September 4, 1985
September 3, 1986
September 2, 1987
12.5%
25.0%
37.5%
50.0%
62.5%
75.0%
87.5%
3
Member Banks
Members of the Federal Reserve
System on September 1, 1980, or
banks that were members between
July 1, 1979, and September 1, 1980,
will have new reserve requirements
phased-in over approximately 3l/i
years. To calculate the reserves
during this period, banks must first
compute the old reserve requirements
and then compute the new one. The
difference between the old require
ment and the new requirement will
be eliminated gradually. On Novem
ber 13, 1980, required reserves were
adjusted by one-quarter of the dif
ference between old and new reserve
requirements. At certain intervals,
required reserves will be adjusted by
an additional fraction of this dif
ference.
Member banks should consult Section
204.4 of Regulation D for phase-in
schedules.
WHAT FUNDS QUALIFY
AS RESERVES
Cash on hand in a depository in
stitution may be used to satisfy the
reserve requirement. When cash is
not sufficient, the balance of required
reserves must be maintained at a
Federal Reserve Bank in an account
that earns no interest. Institutions
that are members of the Federal
Reserve System must maintain their
reserves directly with a Federal
Reserve Bank, as they are now doing.
Nonmember institutions may keep
the balance of their reserves at a
Federal Reserve Bank in one of two
ways. They may hold their reserves
either directly with a Federal Reserve
Bank or indirectly in an account with
another institution that passes the
reserves through to a Federal Reserve
Bank. This second type of account is
called a pass-through account.
4
PASS-THROUGH ACCOUNTS
AND CORRESPONDENTS
The owner of a pass-through ac
count is known as the respondent
and the administrator of the account
is known as the correspondent. U n
der a pass-through arrangement, the
respondent institution provides its
correspondent with the funds needed
to meet its reserves. The correspon
dent then passes the reserves on to a
Federal Reserve Bank on behalf of
the respondent. A respondent may
have only one pass-through account
at a time. Each nonmember in
stitution will have to decide whether
to maintain its reserves directly or to
use a pass-through arrangement.
A Federal Home Loan Bank, the
National Credit Union Administra
tion Central Liquidity Facility, or a
depository institution that holds
reserves directly at a Federal Reserve
Bank may be a pass-through
correspondent. Certain depository in
stitutions that are not required to
hold a reserve balance may be pass
through correspondents if authorized
by the Board — for example, bankers'
banks.
The Duties of a Pass-through
Correspondent
A pass-through correspondent is
responsible for making sure that its
respondents keep the correct amount
of reserves. Respondents’ reserves
must be kept at the Federal Reserve
office in whose territory the respon
dents are located. If there are de
ficiencies in a correspondent’s pass
through account, the Federal Reserve
will assess any resulting penalties on
the correspondent. The correspon
dent, if it wishes, may determine
which of its respondents were
deficient and pass on any penalties
to them.
Decisions Correspondents Must Make
A pass-through correspondent must
choose one of two ways of handling
the reserve accounts of respondents
whose head offices are in the same
Federal Reserve territory as the
correspondent. One way is to put the
reserves o f these respondents in the
correspondent’s own reserve account
at its own Federal Reserve office. The
other way is to put their reserves in a
second account at the correspondent’s
own Federal Reserve office. Either
way, respondents’ reserves are mixed
together. Correspondents have no
choice about how to handle the re
serves of respondents whose head
offices are not in their own Federal Re
serve territory. The reserves of these
respondents must be held at the
Federal Reserve office that serves the
respondents’ home offices. The re
serves of all the respondents of a single
correspondent with head offices in
the same Federal Reserve territory
must be put into a single account of
the correspondent at the Federal
Reserve office for that territory.
APPENDIX A
Regulation D, Reserve Requirements of Depository Institutions
As revised effective January 9, 1981
SECTION 204.1—AUTHORITY,
PURPOSE AND SCOPE
ply to become an insured institution
under section 403 of such Act
(12 U.S.C. 1726).
the United States.
SECTION 204.2— DEFINITIONS
(a)
Authority. This Part is issued
under the authority of section 19 (12
U.S.C. 461 et seq.) and other pro
visions of the Federal Reserve Act
and of section 7 of the International
Banking Act of 1978 (12 U.S.C.
3105).
(2)
Except as may be otherwise
provided by the Board, a foreign
bank ’s branch or agency located in
the United States is required to com
ply with the provisions of this Part
in the same manner and to the same
extent as if the branch or agency
were a member bank, if its parent
(b) Purpose. This Part relates to
foreign bank (i) has total worldwide
reserves that depository institutions
consolidated bank assets in excess of
are required to maintain for the pur
$1 billion; or (ii) is controlled by a
pose of facilitating the implementa
foreign company or by a group of
tion of monetary policy by the Fed
foreign companies that own or con
eral Reserve System.
trol foreign banks that in the aggre
gate have total worldwide consoli
dated bank assets in excess o f $1
(c) Scope. (1) The following deposi
billion. In addition, any other foreign
tory institutions are required to
bank’s branch located in the United
States that is eligible to apply to be
maintain reserves in accordance with
this Part:
come an insured bank under section
5 of the Federal Deposit Insurance
Act (12 U.S.C. 1815) is required to
(i)
Any insured bank as defined
maintain reserves in accordance with
in section 3 of the Federal, Deposit
Insurance Act (12 U.S.C. 1813(h)) or
this part as a nonmember depository
any bank that is eligible to apply to
institution.
become an insured bank under section
5 of such A c t (12 U.S.C. 1815);
(3)
Except as may be otherwise
provided by the Board, an Edge Cor
(ii)
Any savings bank or mu
poration (12 U.S.C. 611 et seq.) or an
tual savings bank as defined in section Agreement Corporation (12 U.S.C.
3 of the Federal Deposit Insurance Act 601 et seq.) is required to comply with
(12 U.S.C. 1813(f), (g));
the provisions of this Part in the same
manner and to the same extent as a
(iii)
Any insured credit union
member bank.
as defined in section 101 of the Fed
eral Credit Union Act (12 U.S.C.
1752(7)) or any credit union that is
(4) This Part does not apply to
eligible to apply to become an insured
any financial institution that (i) is or
credit union under section 201 of such
ganized solely to do business with
Act (12 U.S.C. 1781);
other financial institutions; (ii) is
owned primarily by the financial in
(iv) Any member as defined in
stitutions with which it does busi
section 2 of the Federal Home Loan
ness; and (iii) does not do business
Bank Act (12 U.S.C. 1422(4)); and
with the general public.
(v) Any insured institution as
defined in section 401 of the National
Housing Act (12 U.S.C. 1724(a)) or
any institution which is eligible to ap
(5) The provisions of this Part do
not apply to any deposit that is pay
able only at an office located outside
For purposes of this Part, the fol
lowing definitions apply unless other
wise specified:
(aXl) “ Deposit” means:
(i) the unpaid balance of
money or its equivalent received or
held by a depository institution in
the usual course of business and for
which it has given or is obligated to
give credit, either conditionally or
unconditionally, to an account, in
cluding interest credited, or which is
evidenced by an instrument on which
the depository institution is primarily
liable;
(ii) money received or held by a
depository institution, or the credit
given for money or its equivalent re
ceived or held by the depository in
stitution in the usual course of busi
ness for a special or specific purpose,
regardless of the legal relationships
established thereby, including escrow
funds, funds held as security for se
curities loaned by the depository in
stitution, funds deposited as advance
payment on subscriptions to United
States government securities, and
funds held to meet its acceptances;
(iii) an outstanding draft, cash
ier’s check, money order, or officer’s
check drawn on the depository insti
tution and issued in the usual course
of business for any purpose, includ
ing payment for services, dividends,
or purchases;
(iv) any due bill or other lia
bility or undertaking on the part of
a depository institution to sell or de
liver securities to, or purchase securi
ties for the account of, any customer
(including another depository institu
tion), involving either the receipt of
funds by the depository institution,
regardless of the use of the proceeds.
5
or a debit to an account of the cus
tomer before the securities are deliv
ered. A deposit arises thereafter, if
after three business days from the
date of issuance of the obligation,
the depository institution does not
deliver the securities purchased or
does not fully collateralize its obliga
tion with securities similar to the se
curities purchased. A security is simi
lar if it is of the same type and if it
is of comparable maturity to that
purchased by the customer;
(v) any liability of a depository
institution’s affiliate that is not a de
pository institution, on any promis
sory note, acknowledgment of ad
vance, due bill, or similar obligation
(written or oral), with a maturity of
less than four years, to the extent
that the proceeds are used to supply
or to maintain the availability of
funds (other than capital) to the de
pository institution, except any such
obligation that, had it been issued
directly by the depository institution,
would not constitute a deposit. If an
obligation of an affiliate of a deposi
tory institution is regarded as a de
posit and is used to purchase assets
from the depository institution, the
maturity of the deposit is determined
by the shorter of the maturity of the
obligation issued or the remaining
maturity of the assets purchased. If
the proceeds from an affiliate’s obli
gation are placed in the depository
institution in the form of a reserv
able deposit, no reserves need be
maintained against the obligation of
the affiliate since reserves are re
quired to be maintained against the
deposit issued by the depository insti
tution. However, the maturity of the
deposit issued to the affiliate shall be
the shorter of the maturity of the af
filiate’s obligation or the maturity of
the deposit;
(vi) credit balances;
(vii) any liability of a deposi
tory institution on any promissory
note, acknowledgment of advance,
6
bankers’ acceptance, or similar obli
gation (written or oral), including
mortgage-backed bonds, that is is
sued or undertaken by a depository
institution as a means of obtaining
funds, except any such obligation
that:
(A) is issued or undertaken
and held for the account of:
(1) an office located in the
United States of another depository
institution, foreign bank. Edge or
Agreement Corporation, or New York
Investment (Article XII) Company;
(2) the United States gov
ernment or an agency thereof; or
(3) the Export-Import Bank
of the United States, M inbanc Capi
tal Corporation, the Government De
velopment Bank for Puerto Rico, a
Federal Reserve Bank, a Federal
Home Loan Bank, or the National
Credit Union Administration Central
Liquidity Facility;
(B) arises from a transfer of
direct obligations of, or obligations
that are fully guaranteed as to prin
cipal and interest by, the United
States government or any agency
thereof that the depository institution
is obligated to repurchase;
(C) is not insured by a Fed
eral agency, is subordinated to the
claims of depositors, has a weighted
average maturity of seven years or
more, is not subject to Federal inter
est rate limitations, and is issued by
a depository institution with the ap
proval of, or under the rules and
regulations of, its primary Federal
supervisor;
(D) arises from a borrowing
by a depository institution from a
dealer in securities, for one business
day, of proceeds of a transfer of de
posit credit in a Federal Reserve
Bank or other immediately available
funds, (commonly referred to as
“ Federal funds” ), received by such
dealer on the date of the loan in
connection with clearance of securi
ties transactions; or
(E) arises from the creation,
discount and subsequent sale by a
depository institution of its bankers’
acceptance of the type described in
paragraph 7 of section 13 of the
Federal Reserve Act (12 U.S.C.
§ 372).
(2) “ Deposit” does not include:
(i) trust funds received or held
by the depository institution that it
keeps properly segregated as trust
funds and apart from its general as
sets or which it deposits in another
institution to the credit of itself as
trustee or other fiduciary. If trust
funds are deposited with the com
mercial department of the depository
institution or otherwise mingled with
its general assets, a deposit liability
of the institution is created;
(ii) an obligation that repre
sents a conditional, contingent or en
dorser’s liability;
(iii) obligations, the proceeds of
which are not used by the depository
institution for purposes of making
loans, investments, or maintaining
liquid assets such as cash or “due
from” depository institutions or other
similar purposes. An obligation is
sued for the purpose of raising funds
to purchase business premises, equip
ment, supplies, or similar assets is
not a deposit;
(iv) accounts payable;
(v) hypothecated “deposits”
created by payments on an install
ment loan where (A) the amounts re
ceived are not used immediately to
reduce the unpaid balance due on
the loan until the sum of the pay
ments equals the entire amount of
loan principal and interest; (B) and
where such amounts are irrevocably
assigned to the depository institution
and cannot be reached by the bor
rower or creditors of the borrower;
(vi) dealer reserve and differen
tial accounts that arise from the fi
nancing of dealer installment ac
counts receivable, and which provide
that the dealer may not have access
to the funds in the account until the
installment loans are repaid, as long
as the depository institution is not
actually (as distinguished from con
tingently) obligated to make credit or
funds available to the dealer;
(vii) a dividend declared by a
depository institution for the period
intervening between the date o f the
declaration of the dividend and the
date on which it is paid;
(viii) an obligation representing
a “pass-through account,” as defined
in this section;
(ix) an obligation arising from
the retention by the depository insti
tution of no more than a 10 per cent
interest in a pool of conventional 1-4
family mortgages that are sold to
third parties;
(x) an obligation issued to a
State or municipal housing authority
under a loan-to-lender program in
volving the issuance of tax exempt
bonds and the subsequent lending of
the proceeds to the depository insti
tution for housing finance purposes;
(xi) shares of a credit union
held by the National Credit Union
Administration or the National
Credit Union Administration Central
Liquidity Facility under a statutorily
authorized assistance program; and
(xii) any liability of a United
States branch or agency of a foreign
bank to another United States
branch or agency of the same foreign
bank, or the liability of the United
States office of an Edge Corporation
to another United States office of the
same Edge Corporation.
(bXl) “Demand deposit” means a
deposit that is payable on demand,
or a deposit issued with an original
maturity or required notice period of
less than 14 days, or a deposit repre
senting funds for which the deposi
tory institution does not reserve the
right to require at least 14 days’
written notice of an intended with
drawal. The term includes all depos
its other than time and savings de
posits. Demand deposits may be in
the form of (i) checking accounts; (ii)
certified, cashier’s and officer’s
checks (including checks issued by
the depository institution in payment
of dividends); (iii) traveler’s checks
and money orders that are primary
obligations of the issuing institution;
(iv) checks or drafts drawn by, or on
behalf of, a non-United States office
of a depository institution on an ac
count maintained at any of the insti
tution’s United States offices; (v) let
ters of credit sold for cash or its
equivalent; (vi) withheld taxes, with
held insurance and other withheld
funds; (vii) time deposits that have
m atured or time deposits upon which
the required notice of withdrawal pe
riod has expired and which have not
been renewed (either by action of the
depositor or automatically under the
terms of the deposit agreement); and
(viii) an obligation to pay on demand
or within 14 days a check (or other
instrument, device, or arrangement
for the transfer of funds) drawn on
the depository institution, where the
account of the institution’s customer
already has been debited. The term
does not include an obligation that is
a time deposit under section
204.2(cXlXii).
have a right to withdraw for a pe
riod of 14 days or more after the
date of deposit. “Time deposit” in
cludes funds:
(A) payable on a specified
date not less than 14 days after the
date of deposit;
(B) payable at the expiration
of a specified time not less than 14
days after the date of deposit;
(C) payable upon written no
tice which actually is required to be
given by the depositor not less than
14 days before the date of repay
ment;
(D) such as “ Christmas
club” accounts and “vacation club”
accounts that are deposited under
written contracts providing that no
withdrawal shall be made until a
certain num ber of periodic deposits
have been made during a period of
not less than three months even
though some of the deposits may be
made within 14 days from the end of
the period; or
(E) that constitute a “savings
deposit” which is not regarded as a
“transaction account.”
(ii)
borrowings, regardless of
maturity, represented by a promis
sory note, an acknowledgment of ad
vance, or similar obligation described
in section 204.2(aXlXvii) that is is
sued to any office located outside the
United States of another depository
institution or Edge or Agreement
Corporation organized under the laws
of the United States, to any office
located outside the United States of a
foreign bank, or to institutions whose
(2)
A “demand deposit” does nottime deposits are exempt from interest
rate limitations under section 217.3(g)
include checks or drafts drawn by
the depository institution on the Fed
of Regulation 0 ( 1 2 CFR 217.3(g)).
eral Reserve or on another depository
(2)
A time deposit may be repre
institution.
sented by a transferable or non
transferable, or a negotiable or non
(cX 1) “Time deposit” means (i) a
negotiable, certificate, instrument.
deposit that the depositor does not
7
passbook, statement, or otherwise. A
“time deposit” includes share certifi
cates and certificates of indebtedness
issued by credit unions, and certifi
cate accounts and notice accounts is
sued by savings and loan associa
tions.
(dXl) “Savings deposit” means a
deposit or account with respect to
which the depositor is not required
by the deposit contract but may at
any time be required by the deposi
tory institution to give written notice
of an intended withdrawal not less
than 14 days before withdrawal is
made, and that is not payable on a
specified date or at the expiration of
a specified time after the date of de
posit. A deposit may continue to be
classified as a savings deposit even if
the depository institution exercises its
right to require notice of withdrawal.
A “savings deposit” includes a regu
lar share account at a credit union and
a regular account at a savings and loan
association.
(2) For depository institutions
subject to 12 CFR Part 217 or 12 CFR
Part 329, funds deposited to the credit
of, or in which any beneficial interest
is held by, a corporation, association,
partnership or other organization ope
rated for profit may be classified as a
savings deposit if such funds do not
exceed $150,000 per depositor at the
depository institution.
(3) “ Savings deposit” does not
include funds deposited to the credit
of the depository institution’s own
trust department where the funds in
volved are utilized to cover checks or
drafts. Such funds are “ transaction
accounts.”
(e) “Transaction account” means a
deposit or account on which the de
positor or account holder is perm it
ted to make withdrawals by nego
tiable or transferable instrument,
payment orders of withdrawal, tele
phone transfers, or other similar de
vice for the purpose of making pay
8
ments or transfers to third persons
or others. “Transaction account” in
cludes:
(1) demand deposits;
(2) deposits or accounts subject
to check, draft, negotiable order of
withdrawal, share draft, or other sim
ilar item;
(3) savings deposits or accounts
in which withdrawals may be made
automatically through payment to the
depository institution itself or
through transfer of credit to a de
mand deposit or other account in
order to cover checks or drafts
drawn upon the institution or to
maintain a specified balance in, or
to make periodic transfers to, such
accounts (automatic transfer ac
counts);
(4) deposits or accounts in which
payments may be made to third p ar
ties by means of an automated teller
machine, remote service unit or other
electronic device; and
(5) deposits or accounts in which
payments may be made to third p ar
ties by means of a debit card;
(6) deposits or accounts under
the terms of which, or which by
practice of the depository institution,
the depositor is permitted or autho
rized to make more than three with
drawals per month for purposes of
transferring funds to another account
or for making a payment to a third
party by means of preauthorized or
telephone agreement, order or in
struction. An account that permits or
authorizes more than three such
withdrawals in a calendar month, or
statement cycle (or similar period) of
at least four weeks, is a “transaction
account” whether or not more than
three such withdrawals actually are
made during such period. A “pre
authorized transfer” includes any ar
rangement by the depository institu
tion to pay a third party from the
account of a depositor upon written
or oral instruction (including an
order received through an automated
clearing house (ACH)), or any a r
rangement by a depository institution
to pay a third party from the ac
count of the depositor at a predeter
mined time or on a fixed schedule.
An account is not a “transaction ac
count” by virtue of an arrangement
that permits withdrawals for the p u r
pose of repaying loans and associated
expenses at the same depository in
stitution (as originator or servicer).
(fXl) “Nonpersonal time deposit”
means:
(i) a time deposit, including a
savings deposit, that is not a transac
tion account, representing funds in
which any beneficial interest is held
by a depositor which is not a natural
person;
(ii) a time deposit including a
savings deposit that is not a transac
tion account, that represents funds
deposited to the credit of a depositor
that is not a natural person, other
than a deposit to the credit of a
trustee or other fiduciary if the en
tire beneficial interest in the deposit
is held by one or more natural per
sons;
(iii) a time deposit that is
transferable, except a time deposit
originally issued before October 1,
1980, to and held by one or more
natural persons, including a deposit
to the credit of a trustee or other fi
duciary if the entire beneficial in
terest in the deposit is held by one
or more natural persons;
(iv) a time deposit that is
transferable, issued on or after Oc
tober 1, 1980, to and held by one or
more natural persons, including a
deposit to the credit of a trustee or
other fiduciary if the entire beneficial
interest is held by one or more n at
ural persons. A time deposit is trans
ferable unless it contains a specific
statement on the certificate, instru
ment, passbook, statement or other
form representing the account that it
is not transferable. A time deposit
that contains a specific statement
that it is not transferable is not
regarded as transferable even if the
following transactions can be ef
fected: a pledge as collateral for a
loan; a transaction that occurs due
to circumstances arising from death,
incompetency, marriage, divorce, at
tachment or otherwise by operation
of law or a transfer on the books or
records of the institution; and
(h) “Eurocurrency liabilities”
means:
(1) For a depository institution or
an Edge or Agreement Corporation or
ganized under the laws of the United
States, the sum, if positive, of the
following:
(i) net balances due to its non
United States offices and its inter
national banking facilities (“IBFs”)
from its United States offices;
eign branch, office, subsidiary, affili
ate or other foreign establishment
(“foreign affiliate”) controlled by one
or more domestic corporations is not
regarded as credit extended to a United
States resident if the proceeds will be
used to finance the operations outside
the United States of the borrower or of
other foreign affiliates of the con
trolling domestic corporation(s).
(2)
For a United States branch or
agency of a foreign bank, the sum, if
positive, of the following:
(ii) (A) for a depository insti
(i) net balances due to its for
tution organized under the laws of the
eign bank (including offices thereof
United States, assets (including par
(v)
a time deposit represented
located outside the United States) and
ticipations) acquired from its United
by a promissory note, an acknowl
its international banking facility after
States offices and held by its non
edgment of advance, or a similar
deducting
an amount equal to 8 per
United States offices, by its IBF, or by
obligation described in section
cent
of
the
following: the United
non-United States offices of an affili
204.2(aXlXvii) that is issued to any
States branch’s or agency’s total assets
ated Edge or Agreement Corporation;'
office located outside the United
less the sum of (A) cash items in pro
or
States of another depository institu
cess of collection; (B) unposted debits;
tion or Edge or Agreement Corpora
(C) demand balances due from deposi
(B)
for an Edge or Agree
tion organized under the laws of the
tory institutions organized under the
ment Corporation, assets (including
United States, to any office located
laws of the United States and from
participations) acquired from its
outside the United States of a foreign
other foreign banks; (D) balances due
United States offices and held by its
bank, or to institutions whose time
from foreign central banks; and (E)
non-United States offices, by its IBF,
deposits are exempt from interest
positive net balances due from its IBF,
by non-United States offices of its
rate limitations under section 217.3(g)
its foreign bank, and the foreign
U.S. or foreign parent institution, or
of Regulation Q (12 CFR 217.3(g)).
bank’s United States and non-United
by non-United States offices of an af
States offices; and
filiated Edge or Agreement Cor
(2)
“ Nonpersonal time deposit” poration;' and
does not include nontransferable time
(ii) assets (including par
deposits to the credit of or in which
ticipations) acquired from the United
(iii) credit outstanding from its
the entire beneficial interest is held
non-United States offices to United
States branch or agency (other than as
by an individual pursuant to an
sets required to be sold by Federal or
States residents (other than assets ac
Individual Retirement Account or
State supervisory authorities) and held
quired and net balances due from its
Keogh (H. R. 10) Plan under 26
by its foreign bank (including offices
United States offices), except credit
U.S.C. (I.R.C. 1954) §§ 408, 401, or
thereof located outside the United
extended (A) from its non-United
nontransferable time deposits held by
States), by its parent holding com
States offices in the aggregate amount
an employee as part of an unfunded
of $100,000 or less to any United
pany, by non-United States offices or
deferred compensation plan establish
States resident, (B) by a non-United
an IBF of an affiliated Edge or
ed pursuant to Subtitle D of the
Agreement Corporation, or by its
States office that at no time during the
Revenue Act of 1978 (Pub. L No.
IBFs.'
computation period had credit out
95-600, 92 Stat. 2763)
standing to United States residents ex
(iXl) “Cash item in process of col
ceeding $1 million, (C) to an inter
lection” means:
(g)
“Natural person” means an in national banking facility, or (D) to an
dividual or a sole proprietorship. The
institution that will be maintaining re
term does not mean a corporation
serves on such credit pursuant to this
(i)
checks in the process of col
owned by an individual, a partner
lection, drawn on a bank or other
Part. Credit extended from non-United
depository institution that are payable
ship or other association.
States offices or from IBFs to a for
*This subparagraph does not apply to assets (1) that were acquired before O ctober 7, 1979, or (2) that were acquired by an IBF from its establishing entity before the end of the
fourth reserve compulation period after its establishment.
9
immediately upon presentation in the
United States, including checks for
warded to a Federal Reserve Bank
in process of collection and checks
on hand that will be presented for pay
ment or forwarded for collection on
the following business day;
(ii) government checks drawn
on the Treasury of the United States
that are in the process of collection;
and
(iii) such other items in the
process of collection, that are
payable immediately upon presenta
tion in the United States and that
are customarily cleared or collected
by depository institutions as cash
items, including:
(A) drafts payable through
another depository institution;
(B) redeemed bonds and
coupons;
(C) food coupons and certifi
cates;
(D) postal and other money
orders, and traveler’s checks;
(E) amounts credited to de
posit accounts in connection with
automated payment arrangements
where such credits are made one
business day prior to the scheduled
payment date to insure that funds
are available on the payment date;
means the total amount of a deposi
tory institution’s transaction accounts
less the deductions allowed under the
provisions of § 204.3.
(kXl) “Vault cash” means United
States currency and coin owned and
held by a depository institution that
may, at any time, be used to satisfy
depositors’ claims.
(2) “ Vault cash” includes United
States currency and coin in transit to
a Federal Reserve Bank or a corre
spondent depository institution for
which the reporting depository insti
tution has not yet received credit,
and United States currency and coin
in transit from a Federal Reserve
Bank or a correspondent depository
institution when the reporting depos
itory institution’s account at the
Federal Reserve or correspondent
bank has been charged for such
shipment.
(3) Silver and gold coin and
other currency and coin whose nu
mismatic or bullion value is substan
tially in excess of face value is not
vault cash for purposes of this Part.
(1) “Pass-through account” means
a balance maintained by a depository
institution that is not a member
bank, by a U.S. branch or agency of
a foreign,bank, or by an Edge or
Agreement Corporation, (1) in an in
stitution that maintains required re
serve balances at a Federal Reserve
(F) commodity or bill of
Bank, (2) in a Federal Home Loan
lading drafts payable immediately
Bank, (3) in the National Credit
upon presentation in the United
Union Administration Central Liq
States;
uidity Facility, or (4) in an institution
that has been authorized by the
(G) returned items and un
Board to pass through required re
posted debits; and
serve balances if the institution. Fed
eral Home Loan Bank, or National
(H) broker security drafts.
Credit Union Administration Central
(2)
“ Cash item in process of colLiquidity Facility maintains the funds
in the form of a balance in a Fed
lection” does not include items han
eral Reserve Bank of which it is a
dled as noncash collections and
member or at which it maintains an
credit card sales slips and drafts.
account in accordance with rules and
regulations of the board.
(j) “Net transaction accounts”
10
(mXl) “Depository institution”
means:
(i) any insured bank as defined
in section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813(h))
or any bank that is eligible to apply
to become an insured bank under
section 5 of such Act (12 U.S.C.
1815);
(ii) any savings bank or mutual
savings bank as defined in section 3
of the Federal Deposit Insurance Act
(12 U.S.C. § 1813(f), (g));
(iii) any insured credit union as
defined in section 101 of the Federal
Credit Union Act (12 U.S.C. 1752(7))
or any credit union that is eligible to
apply to become an insured credit
union under section 201 of such Act
(12 U.S.C. § 1781);
(iv) any member as defined in
section 2 o f the Federal Home Loan
Bank Act (12 U.S.C. 1422(4)); and
(v) any insured institution as
defined in section 401 of the National
Housing Act (12 U.S.C. § 1724(a)) or
any institution which is eligible to
apply to become an insured institu
tion under section 403 of such Act
(12 U.S.C. 1726).
(2)
“ Depository institution” does
not include international organiza
tions such as the World Bank, the
Inter-American Development Bank,
and the Asian Development Bank.
(n) “Member bank” means a
depository institution that is a mem
ber of the Federal Reserve System.
(o)
“Foreign bank” means any
bank or other similar institution
organized under the laws of any
country other than the United States
or organized under the laws of
Puerto Rico, Guam, American
Samoa, the Virgin Islands, or other
territory or possession of the United
States.
(p) “De novo depository institution”
means a depository institution that
was not engaged in business on July
1, 1979, and is not the successor by
merger or consolidation to a deposi
tory institution that was engaged in
business prior to the date of merger
or consolidation.
(q) “Affiliate” includes any cor
poration, association, or other
organization:
(1) Of which a depository institu
tion, directly or indirectly, owns or
controls either a majority of the
voting shares or more than 50 per
cent of the numbers of shares voted
for the election of its directors,
trustees, or other persons exercising
similar functions at the preceding
election, or controls in any manner
the election of a majority of its
directors, trustees, or other persons
exercising similar functions;
(2) O f which control is held,
directly or indirectly, through stock
ownership or in any other manner,
by the shareholders of a depository
institution who own or control either
a majority of the shares of such de
pository institution or more than 50
per cent of the number of shares
voted for the election of directors of
such depository institution at the
preceding election, or by trustees for
the benefit of the shareholders of
any such depository institution;
(3) O f which a majority of its
directors, trustees, or other persons
exercising similar functions are direc
tors of any one depository institution;
or
(4) Which owns or controls, di
rectly or indirectly, either a majority
of the shares of capital stock of a
depository institution or more than
50 per cent of the number of shares
voted for the election of directors,
trustees or other persons exercising
similar functions of a depository in
stitution at the preceding election, or
controls in any manner the election
of a majority o f the directors,
trustees, or other persons exercising
similar functions of a depository in
stitution, or for the benefit of whose
shareholders or members all or sub
stantially all the capital stock of a
depository institution is held by
trustees.
(r) “United States” means the
States of the United States and the
District of Columbia.
(s) “United States resident” means
(1) any individual residing (at the
time of the transaction) in the
United States; (2) any corporation,
partnership, association or other en
tity organized in the United States
(“domestic corporation” ); and (3) any
branch or office located in the
United States of any entity that is
not organized in the United States.
(t) “Any deposit that is payable
only at an office located outside the
United States” means (1) a deposit of
a United States resident2 that is in a
denomination of $100,000 or more,
and as to which the depositor is en
titled, under the agreement with the
institution, to demand payment only
outside the United States or (2) a de
posit of a person who is not a United
States resident2 as to which the deposi
tor is entitled, under the agreement
with the institution, to demand pay
ment only outside the United States.
SECTION 204.3—COMPUTATION
AND MAINTENANCE
(a)
Maintenance of required
reserves. A depository institution, a
U.S. branch or agency o f a foreign
bank, and an Edge or Agreement Cor
poration shall maintain reserves
against its deposits and Eurocurrency
liabilities in accordance with the pro
cedures prescribed in this section
and section 204.4 and the ratios pre
scribed in section 204.9. Penalties
shall be assessed for deficiencies in
required reserves in accordance with
the provisions o f section 204.7. Every
institution holding transaction ac
counts or nonpersonal time deposits
shall file a report of deposits each
week with the Federal Reserve Bank
of its District (see section 204.3(d)
for the special rule for depository in
stitutions with total deposits of less
than $15 million) and any other re
ports that the Board may requi 'e by
rule, regulation or order. For p u r
poses of this Part, the obligations of
a majority owned (50% or more) U..S.
subsidiary (except an Edge or Agree
ment Corporation) of a depository
institution shall be regarded as obli
gations of the parent depository insti
tution.
(1) United States branches and
agencies o f foreign banks.
(i) A foreign b an k ’s United
States branches and agencies oper
ating within the same State and
within the same Federal Reserve Dis
trict shall prepare and file a report
of deposits on an aggregated basis.
(ii) United States branches and
agencies of the same foreign bank
shall, if possible, assign the low
reserve tranche on transaction ac
counts (§ 204.9(a)) to only one office
or to a group of offices filing a sin
gle aggregated report of deposits. If
the low reserve tranche cannot be
fully utilized by a single office or by
a group of offices filing a single
report of deposits, the unused por
tion of the tranche may be assigned
to other offices o f the same foreign
bank untij the amount of the
tranche or net transaction accounts
is exhausted. The foreign bank
shall determine this assignment
deposit o f a foreign b ranc h, office, su b sid iary , affiliate o r o th e r foreign esta b lish m e n t ( “foreign affiliate'*) co n tro lled by on e o r m o re d o m estic co rp o ratio n s is not regarded
as a deposit o f a U nited States resid en t if the funds serve a purpose in connection w ith its foreign o r international business o r th at o f o th e r fo reig n affiliates o f the controlling
d om estic corporation(s).
ii
subject to the restriction that if a
portion of the tranche is assigned to
an office in a particular State, any
unused portion must first be as
signed to other offices located within
the same State and within the same
Federal Reserve District, that is, to
other offices included on the same
aggregated report of deposits. If
necessary in order to avoid under
utilization of the low reserve tranche,
the allocation may be changed at the
beginning of a calendar month.
Under other circumstances, the low
reserve tranche may be reallocated at
the beginning of a calendar year.
(2)
porations.
Edge and Agreement Cor
(i) An Edge or Agreement Cor
poration’s offices operating within
the same State and within the same
Federal Reserve District shall prepare
and file a report of deposits on an
aggregated basis.
(ii) An Edge or Agreement
Corporation shall, if possible, assign
the low reserve tranche on transac
tion accounts (§ 204.9(a)) to only one
office or to a group of offices filing
a single aggregated report of depos
its. If the low reserve tranche cannot
be fully utilized by a single office or
by a group of offices filing a single
report of deposits, the unused por
tion of the tranche may be assigned
to other offices of the same institu
tion until the amount of the tranche
is exhausted. An Edge or Agreement
Corporation shall determine this as
signment subject to the restriction
that if a portion of the tranche is as
signed to an office in a particular
State, any unused portion must first
be assigned to other offices located
within the same State and within the
same Federal Reserve District, that
is, to other offices included on the
same aggregated report of deposits.
If necessary in order to avoid under
utilization of the low reserve tranche,
the allocation may be changed at the
beginning of a calendar month.
Under other circumstances, the low
12
reserve tranche may be reallocated at
the beginning of a calendar year.
a different month to report during
each calendar quarter.
(b) Form of reserves. Reserves shall
be held in the form of (i) vault cash,
(ii) a balance maintained directly
with the Federal Reserve Bank in the
District in which it is located, or (iii)
a pass-through account. Reserves
held in the form of a pass-through
account shall be considered to be a
balance maintained with the Federal
Reserve.,
(2) Required reserves are com
puted on the basis of the depository
institution's daily average deposit
balances during the seven-day com
putation period. In determining the
reserve balance that a depository in
stitution is required to maintain with
the Federal Reserve, the average dai
ly vault cash held during the com
putation period is deducted from the
amount of the institution’s required
reserves. The reserve balance that is
required to be maintained with the
Federal Reserve shall be maintained
during a corresponding period that
begins on the fourth Thursday
following the end of the institution’s
computation period and ends on the
third Wednesday after the close of
the institution’s next computation
period. Such reserve balance shall be
maintained in the amount required
on a daily average basis during each
week of the quarterly reserve
maintenance period.
(c) Computation of required
reserves. Required reserves are com
puted on the basis of the daily aver
age deposit balances during a sevenday period ending each Wednesday
(the “ computation period” ). Reserve
requirements are computed by apply
ing the ratios prescribed in section
204.9 to the classes of deposits and
Eurocurrency liabilities of the institu
tion. In determining the reserve bal
ance that is required to be m ain
tained with the Federal Reserve, the
average daily vault cash held during
the computation period is deducted
from the amount of the institution’s
required reserves. The reserve bal
ance that is required to be m ain
tained with the Federal Reserve shall
be maintained during a correspond
ing seven-day period (the “m ainten
ance period” ) which begins on the
second Thursday following the end of
a given computation period.
(d) Special rule for depository in
stitutions that have total deposits of
less than $15 million.
(3) A depository institution that
has less than $15 million in total
deposits as of December 31, 1979,
shall qualify under this paragraph
until it reports total deposits of $15
million or more for two consecutive
calendar quarters. The Board may re
quire any depository institution that is
experiencing above normal growth to
report on a weekly basis prior to re
porting $15 million or more in total
deposits for two consecutive calendar
quarters.
(4) A depository institution that
(1)
A depository institution with qualifies under this paragraph may
total deposits of less than $15
elect at the beginning of a calendar
million shall file a report of deposits
year to report deposits and maintain
once each calendar quarter for a
reserves on a weekly basis.
seven-day computation period that
begins on the third Thursday of a
(5) This paragraph shall not ap
given month during the calendar
ply to an Edge or Agreement Corpo
quarter. Each Reserve Bank shall
ration or a United States branch or
divide the depository institutions in
agency of a foreign bank.
its District that qualify under this
(e)
Computation of transaction ac
paragraph into three substantially
counts.
Overdrafts
in demand deposit
equal groups and assign each group
or other transaction accounts are not
to be treated as negative demand de
posits or negative transaction ac
counts and shall not be netted since
overdrafts are properly reflected on
an institution’s books as assets.
However, where a customer m ain
tains multiple transaction accounts
with a depository institution, over
drafts in one account pursuant to a
bona fide cash management arrange
ment are permitted to be netted
against balances in other related
transaction accounts for reserve re
quirement purposes.
(f) Deductions allowed in com
puting reserves.
(1)
In determining the reserve
balance required under this Part, the
amount of cash items in process of
collection and balances subject to
immediate withdrawal due from
other depository institutions located
in the United States (including such
amounts due from United States
branches and agencies of foreign
banks and Edge and Agreement Cor
porations) may be deducted from the
amount of gross transaction ac
counts. The amount that may be de
ducted may not exceed that amount
o f gross transaction accounts. How
ever, if a depository institution m ain
tains any transaction accounts that
are first authorized under Federal
law after April 1, 1980, it may de
duct from these balances cash items
in process of collection and balances
subject to immediate withdrawal due
from other depository institutions
located in the United States only to
the extent of the proportion that
such newly authorized transaction ac
counts are of the institution’s total
transaction accounts. The remaining
cash items in process of collection
and balances subject to immediate
withdrawal due from other depository
institutions located in the United
States shall be deducted from the in
stitution’s remaining transaction ac
counts.
(2) United States branches and
agencies of a foreign bank may not
deduct balances due from another
United States branch or agency of
the same foreign bank, and United
States offices of an Edge or Agree
ment Corporation may not deduct
balances due from another United
States office of the same Edge Cor
poration.
(3) Balances “due fom other de
pository institutions” do not include
balances due from Federal Reserve
Banks, pass-through accounts, or
balances (payable in dollars or other
wise) due from banking offices lo
cated outside the United States. An
institution exercising fiduciary powers
may not include in “balances due
from other depository institutions”
amounts of trust funds deposited
with other banks and due to it as a
trustee or other fiduciary.
(g) Availability of cash items as
reserves. Cash items forwarded to a
Federal Reserve Bank for collection
and credit shall not be counted as
part o f the reserve balance to be car
ried out with the Federal Reserve
until the expiration of the time
specified in the appropriate time
schedule established under Regula
tion J, “Collection of Checks and
Other Items and Transfers of
Funds” (12 CFR Part 210). If a depos
itory institution draws against items
before that time, the charge will be
made to its reserve account if the
balance is sufficient to pay it; any
resulting impairment of reserve bal
ances will be subject to the penalties
provided by law and by this Part.
However, the Federal Reserve Bank
may, at its discretion, refuse to per
mit the withdrawal or other use of
credit given in a reserve account for
any time for which the Federal Re
serve bank has not received payment
in actually and finally collected
funds.
(h) Carryover of deficiencies. Any
excess or deficiency in a required
reserve balance for any maintenance
period that does not exceed 2 per
cent of institution’s required reserves
shall be carried forward to the next
maintenance period. Any carryover
not offset during the next period
may not be carried forward to addi
tional periods.
(i) Pass-through rules.
(1) Procedure
(i) A nonmember depository in
stitution required to maintain reserve
balances (“respondent” ) may select
only one institution to pass through
its required reserves. Eligible institu
tions through which respondent re
quired reserve balances may be
passed (“correspondents” ) are Fed
eral Home Loan Banks, the National
Credit Union Administration Central
Liquidity Facility, and depository in
stitutions that maintain required re
serves at a Federal Reserve office. In
addition, the Board reserves the right
to permit other institutions, on a
case-by-case basis, to serve as pass
through correspondents. The corre
spondent chosen must subsequently
pass through the required reserve
balances o f its respondents directly
to the appropriate Federal Reserve
office. The correspondent placing
funds with the Federal Reserve on
behalf of respondents will be respon
sible for reserve account maintenance
as described in subparagraphs (3)
and (4) below.
(ii) Respondent depository in
stitutions or pass-through correspon
dents may institute, terminate, or
change pass-through arrangements
for the maintenance o f required re
serve balances by providing all docu
mentation required for the establish
ment of the new arrangement and/or
termination o f the existing arrange
m ent to the Federal Reserve Bank in
whose territory the respondent is lo
cated. The time period required for
such a change to be effected shall be
specified by each Reserve Bank in its
operating circular.
13
(iii)
U.S. branches and agencies
territory in which the main office of
of foreign banks and Edge and Agree
the correspondent is located shall
ment Corporations may (a) act as pass
have the option of maintaining such
through correspondents for any non
required reserve balances in one of
member institution required to maintain
two ways: (a) A correspondent may
reserves or (b) pass their own required
maintain such balances along with
reserve balances through correspon
the correspondent’s own required re
dents. In accordance with the provision
serve balances in a single comming
set forth in subparagraph (3) below, the
led account at the Federal Reserve
U.S. branches and agencies of a foreign
Bank office in whose territory the
bank or offices of an Edge and Agree
correspondent’s main office is lo
ment Corporation filing a single aggre
cated; or (b) A correspondent may
gated report of deposits may designate
maintain its own required reserve
any one of the other U.S. offices of the
balance in an account with the Fed
same institution to serve as a pass
eral Reserve Bank office in whose
through correspondent for all of the of
territory its main office is located.
fices filing such a single aggregated The correspondent, in addition,
report of deposits.
would maintain in a separate com
mingled account the required reserve
(2) Reports
balances passed through for
respondents whose main office is
(i) Every depository institution
located in the same Federal Reserve
that maintains transaction accounts
territory as that of the main office of
or non personal time deposits is re
the correspondent.
quired to file its report of deposits
(or any other required form or state
(ii) A correspondent that passes
ment) directly with the Federal Re
through required reserve balances of
serve Bank of its District, regardless
respondents whose main offices are
of the manner in which it chooses to
located outside the Federal Reserve
maintain required reserve balances.
territory in which the main office of
the correspondent is located shall
(ii) The Federal Reserve Bank
maintain such required reserve bal
receiving such reports shall notify the
ances in a separate commingled ac
reporting depository institution of its
count at each Federal Reserve office
reserve requirements. Where a pass
in whose territory the main offices of
through arrangement exists, the Re
such respondents are located.
serve Bank will also notify the cor
(iii) A Reserve Bank may, at its
respondent passing respondent re
discretion, require a pass-through
serve balances through to the Federal
correspondent to consolidate in a
Reserve of its respondent’s required
single account the reserve balances of
reserve balances.
all of its respondents whose main of
fices
are located in any territory of
(iii) the Federal Reserve will
that Federal Reserve District.
not hold a correspondent responsible
for guaranteeing the accuracy of the
reports of deposits submitted by its re
spondents to their local Federal Re
serve Bank.
(4) Responsibilities o f Parties
(i) Each individual depository
institution is responsible for m ain
taining its required reserve balance
(3) Account Maintenance
with the Federal Reserve Bank either
directly or through a pass-through
(i)
A correspondent that passes
correspondent.
through required reserve balances of
respondents whose main offices are
(ii) A pass-through correspon
located in the same Federal Reserve
dent shall be responsible for assuring
14
the maintenance o f the appropriate
aggregate level of its respondents’ re
quired reserve balance. A Reserve
Bank will compare the total reserve
balance required to be maintained in
each reserve account with the total
actual reserve balance held in such
reserve accounts for purposes of de
termining required reserve deficien
cies, imposing or waiving penalties
for deficiencies in required reserves,
and for other reserve maintenance
purposes. A penalty for a deficiency
in the aggregate level of the required
reserve balance will be imposed by
the Reserve Bank on the correspon
dent maintaining the account.
(iii) Each correspondent is re
quired to m aintain detailed records
for each of its respondents in a m an
ner that permits Reserve Banks to
determine whether the respondent
has provided a sufficient required re
serve balance to the correspondent.
A correspondent passing through a
respondent’s reserve balance shall
maintain records and make such re
ports as the Federal Reserve System
requires in order to insure the corre
spondent’s compliance with its re
sponsibilities for the maintenance of
a respondent’s reserve balance. Such
records shall be available to the Fed
eral Reserve Banks as required.
(iv) The Federal Reserve Bank
may terminate any pass-through rela
tionship in which the correspondent
is deficient in its recordkeeping or
other responsibilities.
(v) Interest paid on supplemen
tal reserves (if such reserves are re
quired under section 204.6 of this
Part) held by respondent(s) will be
credited to the commingled reserve
account(s) maintained by the corre
spondent.
(5) Services
(i)
A depository institution
maintaining its reserve balances on a
pass-through basis may obtain avail
able Federal Reserve System services
directly from its local Federal Re
serve office. For this purpose, the
pass-through account in which a re
spondent’s required reserve balance
is maintained may be used by the
respondent for the posting of entries
arising from transactions involving
the use of such Federal Reserve ser
vices, if the posting of these types of
transactions has been authorized by
the correspondent and the Federal
Reserve. For example, access to the
wire transfer, securities transfer, and
settlement services that involve
charges to the commingled reserve
account at the Reserve Bank will
require authorization from the cor
respondent and the Reserve Bank for
the type of transaction that is
occurring.
(ii) In addition, in obtaining
Federal Reserve services, respondents
maintaining their required reserves on
a pass-through basis may choose to
have entries arising from the use
of Federal Reserve services posted to:
(a) with the prior authorization of all
parties concerned, the reserve account
maintained by any institution at a
Federal Reserve Bank, or (b) an
account maintained for clearing pur
poses at a Federal Reserve Bank by
the respondent.
(iii) Accounts at Federal Re
serve Banks consisting only of re
spondents’ reserve balances that are
passed through by a correspondent
to a Federal Reserve Bank may be
used only for transactions of respon
dents. A correspondent will not be
permitted to use such pass-through
accounts for purposes other than
serving its respondents’ needs.
(iv) A correspondent may not
apply for Federal Reserve credit on
behalf of a respondent. Rather, a
respondent should apply directly to
its Federal Reserve Bank for credit.
Any Federal Reserve credit obtained
by a respondent may be credited, at
the respondent’s option and with the
approval of the parties concerned, to
the reserve account in which its re
quired reserves are maintained by a
correspondent, to a clearing account
maintained by the respondent, or to
any account to which the respondent
is authorized to post entries arising
from the use of Federal Reserve ser
vices.
SECTION 204.4—TRANSITIONAL
ADJUSTMENTS
The following transitional ad
justments for computing Federal
Reserve requirements shall apply to
all member and nonmember deposi
tory institutions, except for reserves
imposed under sections 204.5 and
204.6.
(a)
Nonmembers. Except as pro
vided below, the required reserves of
a depository institution that was en
gaged in business on July 1, 1979,
but was not a member o f the Fed
eral Reserve System on or after that
date shall be determined by reducing
the amount of required reserves com
puted under section 204.3 in accor
dance with the following schedule:
Reserve maintenance
periods occurring
between
November, 13, 1980 to
September 2, 1981
September 3, 1981 to
September 1, 1982
September 2, 1982 to
August 31, 1983
September 1, 1983 to
September 5, 1984
September 6, 1984 to
September 4, 1985
September 5, 1985 to
September 3, 1986
September 4, 1986 to
September 2, 1987
September 3, 1987
forward
% that
computed re
serves will be
reduced
However, an institution shall not
reduce the amount of required re
serves on any category of deposits or
accounts that are first authorized
under Federal law in any State after
April 1, 1980.
(b) Members and former members.
The required reserves of any deposi
tory institution th at is a member
bank on September 1, 1980, or was
a member bank on or after July 1,
1979 and withdrew from membership
before March 31, 1980, or withdraws
from membership on or after March
31, 1980, shall be determined as
follows:
(1) A depository institution
whose required reserves are higher
using the reserve ratios in effect dur
ing a given computation period
(§ 204.9(a)) than its required reserves
using the reserve ratios in effect on
August 31, 1980 (§ 204.9(b)) (without
regard to required reserves on any cat
egory of deposits or accounts that are
first authorized under Federal law in
any State after April 1, 1980):
(i)
shall maintain the full
amount of required reserves on any
category of deposits or accounts that
are first authorized under Federal
law in any State after April 1, 1980;
and
87.5
75
62.5
50
37.5
25
12.5
0
(ii)
shall reduce the amount of
its required reserves on all other de
posits computed under section 204.3
by an amount determined by multi
plying the amount by which required
reserves computed under section 204.3
exceed the amount of required reserves
computed using the reserve ratios that
were in effect on August 31, 1980
(§ 204.9(b)), times the appropriate
percentage specified below in accor
dance with the following schedule:
15
Reserve maintenance
periods occurring
between
November 13, 1980 to
September 2, 1981
September 3, 1981 to
September 1, 1982
September 2, 1982 to
August 31, 1983
September 1, 1983
forward
% applied to
difference to
compute
amount to be
subtracted
75
50
25
0
(2) A depository institution
whose required reserves are lower
using the reserve ratios in effect dur
ing a given computation period
(§ 204.9(a)) than its required reserves
computed using the reserve ratios in
effect on August 31, 1980 (§ 204.9(b))
(without regard to required reserves on
any category of deposits or accounts
that are first authorized under Federal
law in any State after April 1, 1980):
September 3, 1981 to
March 3, 1982
March 4, 1982 to
September 1, 1982
September 2, 1982 to
March 2, 1983
March 3, 1983 to
August 31, 1983
September 1, 1983 to
February 29, 1984
March 1, 1984
forward
62.5
50
37.5
25
12.5
0
(c) Certain nonmembers and
branches and agencies of foreign
banks. The required reserves of a
nonmember depository institution
that was not engaged in business on
or before July 1, 1979, but com
menced business between July 2,
1979, and September 1, 1980, and
any United States branch or agency
of a foreign bank with total world
wide consolidated bank assets in ex
cess of $1 billion shall be determined
by reducing the amount of its re
(i)
shall maintain the full amount
quired reserves computed under sec
of required reserves on any category of tion 204.3 in accordance with the
deposits or accounts that are first au
following schedule:
thorized under Federal law in any
State after April 1, 1980; and
% that
Reserve maintenance computed re
periods occurring
serves will be
(ii)
shall increase the amount
between
reduced
of its required reserves on all other
deposits computed under section
November 13, 1980 to
204.3 by an amount determined by
87.5
February 11, 1981
multiplying the amount by which re
February 12 to
quired reserves computed using the
May 13, 1981
75.0
reserve ratios that were in effect on
May 14 to
August 31, 1980 (§ 204.8(b)), exceed
62.5
August 12, 1981
the amount of required reserves com
August 13 to
puted under section 204.3, times the
50.0
November 11, 1981
appropriate percentage specified
November 12, 1981 to
below in accordance with the follow
February 10, 1982
37.5
ing schedule:
February 11 to
May 12, 1982
25.0
% applied to
May 13 to
difference to
12.5
August 11, 1982
Reserve maintenance
compute
August 12, 1982
periods occurring
amount
0
forward
between
to be added
However, an institution shall not
November 13, 1980 to
reduce the amount o f required re
September 2, 1981
75
serves on any category of deposits or
16
accounts that are first authorized
under Federal law in any State after
April 1, 1980. An additional United
States branch or agency of a foreign
bank operating a branch or agency
in the United States as of September
1, 1980, shall be entitled only to the
remaining phase-in available to the
existing U.S. branch or agency.
(d)
New members. The required re
serves of a nonmember depository in
stitution that was engaged in busi
ness but was not a member bank
during the period between July 1,
1979 and September 1, 1980, inclu
sive, and which becomes a member
of the Federal Reserve System after
September 1, 1980, shall be deter
mined under paragraph (a) or (c), as
applicable, as if it had remained a
nonmember and adding to this
amount an amount determined by
multiplying the difference between its
required reserves computed using the
ratios specified in § 204.9(a) and its
required reserves computed as if it
had remained a nonmember times
the percentage specified below in ac
cordance with the following schedule:
M aintenance periods
occurring during suc
cessive quarters after
becoming a member
bank
1
2
3
4
5
6
7
8 and succeeding
% applied to
difference to
compute
am ount to be
added
12.5
25.0
37.5
50.0
62.5
75.0
87.5
100.0
(e) De novo institutions. (1) The
required reserves of any depository in
stitution that was not engaged in busi
ness on September 1, 1980, shall be
computed under section 204.3 in ac
cordance with the following
schedule:
Maintenance periods
occurring during suc
cessive quarters after
entering into business
1
2
3
4
5
6
7
8 and succeeding
% o f reserve
requirement
to be main
tained
40
45
50
55
65
75
85
after such date shall not maintain re
serves imposed under this part against
deposits held or maintained at its of
fices located in Hawaii until January
2, 1986. Beginning January 2, 1986,
the required reserves on deposits held
or maintained at offices located in
Hawaii of such a depository institution
shall be determined by reducing the
amount of required reserves under §
201.3 in accordance with the following
schedule:
amount determined by multiplying
the amount by which the required
reserves during the computation pe
riod immediately preceding the date
of the merger (computed as if the
depository institutions had merged)
exceeds the sum of the actual re
quired reserves of each depository in
stitution during the same com puta
tion period, times the appropriate
percentage as specified in the follow
ing schedule:
100
This paragraph shall also apply to
a United States branch or agency of
a foreign bank if such branch or
agency is the foreign ban k ’s first of
fice in the United States. Additional
branches or agencies of such a for
eign bank shall be entitled only to
the remaining phase-in available to
the initial office.
(2) Notwithstanding subparagraph
(1), the required reserves of any de
pository institution that:
(i) was not engaged in business
on November 18, 1981; and
(ii) has $50 million or more in
daily average total transaction ac
counts, nonpersonal time deposits and
Eurocurrency liabilities for any com
putation period after commencing
business
shall be 100 percent of the required re
serves computed under section 204.3
starting with the maintenance period
that begins eight days after the com
putation period during which such in
stitution has daily average total trans
action accounts, nonpersonal time de
posits and Eurocurrency liabilities of
$50 million or more.
(f) Nonmember depository insti
tutions with offices in Hawaii. Any
depository institution that, on August
I, 1978, was engaged in business as a
depository institution in Hawaii, and
was not a member of the Federal
Reserve System at any time on or
Maintenance periods
occurring between
January 2 to
December 31, 1986
January 1, 1987 to
January 6, 1988
January 7, 1988 to
January 4, 1989
January 5, 1989 to
January 3, 1990
January 4, 1990 to
January 2, 1991
January 3, 1991 to
January 1, 1992
Janaury 2, 1992 to
January 6, 1993
January 7, 1993
forward
% that
com pared re
serves will be
reduced
87.5
75
62.5
50
% applied to
difference to
M aintenance periods
compute
occurring during quar■
terly periods following amount to be
subtracted
merger
1
2
3
4
5
6
7
8 and succeeding
87.5
75.0
62.5
50.0
37.5
25.0
12.5
0
37.5
25
12.5
0
(g) Mergers and consolidations. The
following rules concerning transi
tional adjustments apply to mergers
and consolidations of depository in
stitutions.
(1) Where all depository institu
tions involved in a merger or con
solidation are subject to the same
paragraph of the transitional adjust
ment rules contained in paragraphs
(a) through (f) of this section during
the reserve computation period im
mediately preceding the merger, the
surviving institution shall continue to
compute its transitional adjustment
of required reserves under such ap
plicable paragraph, except that the
amount of reserves which shall be
maintained shall be reduced by an
(2) (i) Where the depository in
stitutions involved in a merger or
consolidation are not subject to the
same paragraph of the transitional
adjustment rules contained in para
graphs (a) through (f) of this section
and such merger or consolidation
occurs:
(A) on or after July 1, 1979,
between a nonmember bank and a
bank that was a member bank on or
after July 1, 1979, and the survivor
is a nonmember bank;
(B) on or after March 31,
1980, between a member bank and a
nonmember bank and the survivor is
a member bank; or
(C)
on or after September 1,
1980, between any other depository
institutions,
the required reserves of the surviving
institution shall be computed by allo
cating its deposits, Eurocurrency lia17
bilities, other reservable claims, bal
ances due from other depository insti
tutions and cash items in process of
collection to each depository insti
tution involved in the merger trans
action and applying to such amounts
the transitional adjustment rule of
paragraphs (a) through (f) of this sec
tion to which each such depository in
stitution was subject during the reserve
computation period immediately prior
to the merger or consolidation.
(ii) the deposits of the surviving
institution shall be allocated accord
ing to the ratio that daily average
total required reserves of each depos
itory institution involved in the m er
ger were to the sum of daily average
total required reserves of all institu
tions involved in the merger or con
solidation during the reserve compu
tation period immediately preceding
the date of the merger.
(A) If the merger occurs be
fore November 6, 1980, such ratio of
daily average total required reserves
shall be computed using the reserve
requirement ratios in section
204.9(b).
(B) If the merger occurs on
or after November 6, 1980, such
ratio of daily average total required
reserves shall be computed using the
reserve requirement ratios in section
204.9(a) without regard to the tran
sitional adjustments o f this section.
(iii) The low reserve tranche on
transaction accounts (section 204.9(a))
shall be allocated to each institution
involved in the merger or consolida
tion using the ratio computed in sub
paragraph (2)(ii) and the reserve re
quirement tranches on demand deposits
(section 204.9(b)) shall be allocated to
member bank deposits using such ratio
of daily average total required
reserves.
(iv) The vault cash of the sur
viving depository institution also will
be allocated to each institution in
18
volved in the merger or consolidation
according to the ratio that daily
average total required reserves of
each depository institution involved
in the merger was to the sum of daily
average total required reserves of all
institutions involved in the merger or
consolidation during the reserve
computation period immediately
preceding the date of the merger.
this section shall be valid for a
period not exceeding 180 days, and
may be extended for further periods
of up to 180 days each by affirm
ative action of at least five members
of the Board for each extension.
(c) Reports to Congress. The Board
shall transmit promptly to Congress
a report of any exercise of its au
thority under this paragraph and the
(v)
The amount of reserves reasons for the exercise of authority.
which shall be maintained shall be
(d) Reserve Requirements. At pres
reduced by an amount determined by
ent, there are no emergency reserve
multiplying the amount by which the
requirements imposed under this
required reserves during the com pu
section.
tation period immediately preceding
the date o f the merger (computed as
SECTION 204.6— SUPPLEMENTAL
if the depository institutions had
RESERVE REQUIREMENT
merged exceed the sum of the actual
required reserves of each depository
(a)
Finding by Board. Upon the af
institution during the same com puta
firmative vote of at least five mem
tion period, times the appropriate
bers of the Board and after consulta
percentage as specified in the follow
tion with the Board o f Directors of
ing schedule:
the Federal Deposit Insurance Corpo
% applied to
ration, the Federal Home Loan Bank
Maintenance periods
difference to
Board, and the National Credit
occurring during quar•
compute
Union Administration Board, the
terly periods following amount to be
Board may impose a supplemental
merger
subtracted
reserve requirement on every depos
itory institution of not more than 4
1
87.5
per cent o f its total transaction ac
2
75.0
counts. A supplemental reserve re
3
62.5
quirement may be imposed if:
4
50.0
5
37.5
(1) the sole purpose of the re
6
25.0
quirement is to increase the amount
7
12.5
of reserves maintained to a level
8 and succeeding
0
essential for the conduct of monetary
policy;
SECTION 204.5—EMERGENCY
RESERVE REQUIREMENT
(a) Finding by Board. The Board
may impose, after consulting with
the appropriate committees of Con
gress, additional reserve requirements
on depository institutions at any ratio
on any liability upon a finding by at
least five members of the Board that
extraordinary circumstances require
such action.
(b) Term. Any action taken under
(2) the requirement is not im
posed for the purpose of reducing
the cost burdens resulting from the
imposition of basic reserve re
quirements;
(3) such requirement is not im
posed for the purpose of increasing
the amount of balances needed for
clearing purposes; and
(4) on the date on which supple
mental reserve requirements are im
posed, the total amount of basic re
serve requirements is not less than
the amount of reserves that would be
required on transaction accounts and
nonpersonal time deposits under the
initial reserve ratios established by
the Monetary Control Act of 1980
(Pub. L 96-221) in effect on September
1, 1980.
(b) Term.
(1) If a supplemental reserve
requirement has been imposed for a
period of one year or more, the
Board shall review and determine the
need for continued maintenance of
supplemental reserves and shall
transm it annual reports to the Con
gress regarding the need for continu
ing such requirement.
(2) Any supplemental reserve re
quirement shall term inate at the
close of the first 90-day period after
the requirement is imposed during
which the average am ount of supple
mental reserves required are less
than the amount of reserves which
would be required if the ratios in
effect on September 1, 1980, were
applied.
(c) Earnings Participation Account.
A depository institution’s supplemen
tal reserve requirement shall be
maintained by the Federal Reserve
Banks in an Earnings Participation
Account. Such balances shall receive
earnings to be paid by the Federal
Reserve Banks during each calendar
quarter at a rate not to exceed the
rate earned on the securities portfolio
of the Federal Reserve System during
the previous calendar quarter. Addi
tional rules and regulations may be
prescribed by the Board concerning
the payment of earnings on Earnings
Participation Accounts by Federal
Reserve Banks.
(d) Report to Congress. The Board
shall transmit promptly to the Con
gress a report stating the basis for ex
ercising its authority to require a sup
plemental reserve under this section.
(e)
Reserve requirements. At pres
ent, there are no supplemental re
serve requirements imposed under
this section.
SECTION 204.7—PENALTIES
(a) Penalties for Deficiencies.
(1) Assessment o f Penalties.
Deficiencies in a depository institu
tion’s required reserve balance, after
application of the 2 per cent carry
over provided in section 204.3(h) are
subject to penalties. Federal Reserve
Banks are authorized to assess penal
ties for deficiencies in required re
serves at a rate of 2 per cent per
year above the lowest rate in effect
for borrowings from the Federal
Reserve Bank on the first day of the
calendar month in which the defi
ciencies occurred. Penalties shall be
assessed on the basis of daily average
deficiencies during each computation
period. Reserve Banks may, as an
alternative to levying monetary
penalties, after consideration of the
circumstances involved, permit a
depository institution to eliminate de
ficiencies in its required reserve bal
ance by maintaining additional re
serves during subsequent reserve
maintenance periods.
(2) Waivers, (i) Reserve Banks
may waive the penalty for reserve de
ficiencies except when the deficiency
arises out of a depository institution’s
gross negligence or conduct that is
inconsistent with the principles and
purposes of reserve requirements.
Each Reserve Bank has adopted
guidelines that provide for waivers of
small penalties. The guidelines also
provide for waiving the penalty once
during a two-year period for any de
ficiency that does not exceed a cer
tain percentage of the depository
institution’s required reserves. Deci
sions by Reserve Banks to waive pen
alties in other situations are based
on an evaluation of the circum
stances in each individual case and
the depository institution’s reserve
maintenance record. If a depository
institution has demonstrated a lack
of due regard for the proper m ainte
nance of required reserves, the Re
serve Bank may decline to exercise
the waiver privilege and assess all
penalties regardless of amount or
reason for the deficiency.
(ii)
In individual cases, where a
Federal supervisory authority waives
a liquidity requirement, or waives the
penalty for failing to satisfy a liq
uidity requirement, the Reserve Bank
in the District where the involved de
pository institution is located shall
waive the reserve requirement im
posed under this Part for such de
pository institution when requested
by the Federal supervisory authority
involved.
(b) Penalties for Violations.
Violations of this Part may be sub
ject to assessment of civil money
penalties by the Board under author
ity of section 19(1) of the Federal
Reserve Act (12 U.S.C. § 505) as im
plem ented in 12 CFR Part 263. In
addition, the Board and any other Fed
eral financial institution supervisory
authority may enforce this Part with
respect to depository institutions sub
ject to their jurisdiction under author
ity conferred by law to undertake
cease and desist proceedings.
SECTION 204.8—INTERNATIONAL
BANKING FACILITIES
(a)
Definitions. For purposes o f this
Part, the following definitions apply:
(1)
“International banking f a
cility" or “IBF" means a set of asset
and liability accounts segregated on
the books and records of a depository
institution, United States branch or
agency of a foreign bank, or an Edge
or Agreement Corporation that in
cludes only international banking fa
cility time deposits and international
banking facility extensions of credit.
19
(2)
"International banking f a
cility time deposit" or “IBF time de
posit" means a deposit, placement,
borrowing or similar obligation rep
resented by a promissory note, ac
knowledgment of advance, or similar
instrument that is not issued in nego
tiable or bearer form, and
(i) (A) that must remain on
deposit at the IBF at least overnight;
and
(B) that is issued to
(1) any office located out
side the United States of another de
pository institution organized under the
laws of the United States or of an
Edge or Agreement Corporation;
(2) any office located out
side the United States of a foreign
bank;
(3) a United States office
or a non-United States office of the
entity establishing the IBF;
(4) another IBF; or
(5) an institution whose
time deposits are exempt from interest
rate limitations under section 217.3(g)
of Regulation Q (12 CFR 217.3(g)); or
(ii) (A) that is payable
(1) on a specified date not
less than two business days after the
date of deposit;
(2) upon expiration o f a
specified period of time not less than
two business days after the date of de
posit; or
(3) upon written notice
that actually is required to be given by
the depositor not less than two busi
ness days prior to the date of
withdrawal;
States resident or a foreign branch, of
fice, subsidiary, affiliate, or other for
eign establishment (“foreign affiliate”)
controlled by one or more domestic
corporations provided that such funds
are used only to support the operations
outside the United States of the depos
itor or of its affiliates located outside
the United States; and
that the funds are used only to finance
the operations outside the United
States of the borrower or of its affili
ates located outside the United States.
(iii) a United States or a non
United States office of the institution
establishing the IBF;
(d) Establishment of an inter
national banking facility. A depository
IBF shall provide written notice to each
of its customers (other than those speci
fied in § 204.8(a)(2)(i)(B) and
§ 204.8(a)(3)(i) through (v)) at the time
(C)
that is maintained under
a deposit relationship or a credit re
an agreement or arrangement under
which no deposit or withdrawal of less lationship is first established that it is
than $100,000 is permitted, except that the policy of the Board of Governors of
the Federal Reserve System that depos
a withdrawal of less than $100,000 is
its received by international banking fa
permitted if such withdrawal closes an
cilities may be used only to support the
account.
depositor’s operations outside the United
(3)
“International banking f a States as specified in § 204.8(a)(2)(ii)(B)
and that extensions of credit by IBFs
cility extension o f credit" or “IBF
may be used only to finance operations
loan” means any transaction where an
outside of the United States as specified
IBF supplies funds by making a loan,
in § 204.8(a)(3)(vi). In the case of loans
or placing funds in a deposit account.
to or deposits from foreign affiliates of
Such transactions may be represented
U.S. residents, receipt of such notice
by a promissory note, security, ac
must be acknowledged in writing when
knowledgment of advance, due bill,
ever a deposit or credit relationship is
repurchase agreement, or any other
first established with the IBF.
form of credit transaction. Such credit
may be extended only to
(c) Exemption from reserve re
(i) any office located outside
quirements. An institution that is sub
the United States of another depository ject to the reserve requirements of this
institution organized under the laws of Part is not required to maintain reserves
the United States or of an Edge or
against its IBF time deposits or IBF
Agreement Corporation;
loans. Deposit-taking activities of IBFs
are limited to accepting only IBF time
(ii) any office located outside
deposits and lending activities of IBFs
the United States of a foreign bank;
are restricted to making only IBF loans.
(iv) another IBF;
(v) an institution whose time
deposits are exempt from interest rate
limitations under section 217.3(g) of
Regulation Q (12 CFR 217.3(g)); or
(vi) a non-United States resident
or a foreign branch, office, subsidiary,
affiliate or other foreign establishment
(B)
that represents funds
de
(“foreign
affiliate”) controlled by one or
posited to the credit of a non-United
more domestic corporations provided
20
(b) Acknowledgment of use of IBF
deposits and extensions of credit. An
institution, an Edge or Agreement Cor
poration or a United States branch or
agency of a foreign bank may establish
an IBF in any location where it is
legally authorized to engage in IBF
business. However, only one IBF may
be established for each reporting entity
that is required to submit a Report of
Transaction Accounts, Other Deposits
and Vault Cash (Form FR 2900).
(e) Notification to Federal Reserve.
At least fourteen days prior to the first
reserve computation period that an insti
tution intends to establish an IBF it shall
notify the Federal Reserve Bank of the
district in which it is located of its in
tent. Such notification shall include a
statement of intention by the institution
that it will comply with the rules of this
Part concerning IBFs, including restric
tions on sources and uses of funds, and
recordkeeping and accounting re
quirements. Failure to comply with the
requirements of this Part shall subject
the institution to reserve requirements
under this Part and to interest payment
limitations that may be applicable under
Regulation Q (12 CFR Part 217) on its
IBF time deposits, or result in the re
vocation of the institution’s ability to
operate an IBF.
(f) Recordkeeping requirements. A
depository institution shall segregate on
its books and records the asset and liabi
lity accounts of its IBF and submit re
ports concerning the operations of its
IBF as required by the Board.
STATUTORY APPENDIX
Section 19 of the Federal Reserve
Act provides in part as follows:
(a) The Board is authorized for the
purposes of this section to define the
terms used in this section, to deter
mine what shall be deemed a pay
ment of interest, to determine what
types of obligations, whether issued
directly by a member bank or in
directly by an affiliate of a member
bank or by other means, shall be
deemed a deposit, and to prescribe
such regulations as it may deem
necessary to effectuate the purposes
of this section and to prevent eva
sions thereof.
(b) Reserve Requirements.—
(1) Definitions. The following
definitions and rules apply to this
subsection, subsection (c), section
11 A, the first paragraph of section
13, and the second, thirteenth, and
fourteenth paragraphs of section 16:
(A) the term ‘depository in
stitution’ means—
(i) any insured bank as de
fined in section 3 of the Federal
Deposit Insurance Act or any bank
which is eligible to make application
to become an insured bank under
section 5 of such Act;
(ii) any mutual savings
bank as defined in section 3 of the
Federal Deposit Insurance Act or
any bank which is eligible to make
application to become an insured
bank under section 5 of such Act;
(iii) any savings bank as
defined in section 3 of the Federal
Deposit Insurance Act or any bank
which is eligible to make application
to become an insured bank under
section 5 of such Act;
(iv) any insured credit
union as defined in section 101 of the
Federal Credit Union Act or any
credit union which is eligible to
make application to become an in
sured credit union pursuant to sec
tion 201 of such Act;
(v) any member as defined
in section 2 of the Federal Home
Loan Bank Act;
(vi) any insured institution
as defined in section 401 of the Na
tional Housing Act or any institution
which is eligible to make application
to become an insured institution
under section 403 of such Act; and
(vii) for the purpose of sec
tion 13 and the fourteenth paragraph
of section 16, any association or en
tity which is wholly owned by or
which consists only of institutions
referred to in clauses (i) through (vi).
(B) The term ‘b an k ’ means
any insured or noninsured bank, as
defined in section 3 of the Federal
Deposit Insurance Act, other than a
mutual savings bank or a savings
bank as defined in such section.
(C) The term ‘transaction
account’ means a deposit or account
on which the depositor or account
holder is permitted to make with
drawals by negotiable or transferable
instrument, payment orders of with
drawal, telephone transfers, or other
similar items for the purpose of
making payments or transfers to
third persons or others. Such term
includes demand deposits, negotiable
order of withdrawal accounts, saving
deposits subject to automatic trans
fers, and share draft accounts.
(D) The term ‘nonpersonal
time deposits’ means a transferable
time deposit or account or a time
deposit or account representing funds
deposited to the credit of, or in
which any beneficial interest is held
by, a depositor who is not a natural
person.
(E) In order to prevent eva
sions of the reserve requirements im
posed by this subsection, after con
sultation with the Board of Directors
of the Federal Deposit Insurance
Corporation, the Federal Home Loan
Bank Board, and the National Credit
Union Administration Board, the
Board of Governors of the Federal
Reserve System is authorized to
determine, by regulation or order,
that an account or deposit is a
transaction account if such account
or deposit may be used to provide
funds directly or indirectly for the
purpose of making payments or
transfers to third persons or others.
(2) Reserve requirements.
(A) Each depository institution shall
maintain reserves against its transac
tion accounts as the Board may pre
scribe by regulation solely for the
purpose of implementing monetary
policy—
(i)
in the ratio of 3 per centum
for that portion of its total transac
tion accounts of $25,000,000 or less,
21
tracting the amount of such accounts
essential for the conduct of monetary
on June 30 of the calendar year in
policy;
volved
from
the
amount
of
such
ac
(ii)
in the ratio of 12 per cen
counts on June 30 of the previous
(ii) such requirement is not im
tum, or in such other ratio as the
calendar
year.
posed
for
the purpose of reducing
Board may prescribe not greater
the
cost
burdens
resulting from the
than 14 per centum and not less
(D)
Any
reserve
requirement
imposition
of
the
reserve require
than 8 per centum, for that portion
imposed
under
this
subsection
shall
ments
pursuant
to
paragraph (2);
of its total transaction accounts in
be
uniformly
applied
to
all
transac
excess of $25,000,000, subject to sub
tion accounts at all depository in
(iii) such requirement is not
paragraph (C).
stitutions. Reserve requirements im
imposed for the purpose of increas
posed under this subsection shall be
(B) Each depository insti
ing the amount of balances needed
uniformly applied to nonpersonal
tution shall maintain reserves against
for clearing purposes; and
time deposits at all depository in
its nonpersonal time deposits in the
stitutions, except that such re
ratio of 3 per centum, or in such
(iv) on the date on which the
quirements may vary by the maturity
other ratio not greater than 9 per
supplemental reserve requirements is
of such deposits.
centum and not less than zero per
imposed, the total amount of reserves
centum as the Board may prescribe
required pursuant to paragraph (2) is
(3) Waiver of ratio limits in ex
by regulation solely for the purpose
not less than the amount of reserves
traordinary circumstances. Upon a
of implementing monetary policy.
that would be required if the initial
finding by at least 5 members of the
ratios specified in paragraph (2) were
Board that extraordinary circum
(C) Beginning in 1981, not
in effect.
stances require such action, the
later than December 31 of each year
Board, after consultation with the
the Board shall issue a regulation in
(B) The Board may require
appropriate committees of the Con
creasing for the next succeeding
the supplemental reserve authorized
gress, may impose, with respect to
calendar year the dollar amount
under subparagraph (A) only after
any liability of depository institutions,
which is contained in subparagraph
consultation with the Board of Direc
reserve requirements outside the limi
(A) or which was last determined
tors of the Federal Deposit Insurance
tations as to ratios and as to types
pursuant to this subparagraph for
Corporation, the Federal Home Loan
of liabilities otherwise prescribed by
the purpose of such subparagraph,
Bank Board, and the National Credit
paragraph (2) for a period not ex
by an amount obtained by multiply
Union Administration Board. The
ceeding 180 days, and for further
ing such dollar amount by 80 per
Board shall promptly transm it to the
periods not exceeding 180 days each
centum of the percentage increase in
Congress a report with respect to any
by affirmative action by at least 5
the total transaction accounts of all
exercise of its authority to require
members of the Board in each in
depository institutions. The increase
supplemental reserves under subpara
stance. The Board shall promptly
in such transaction accounts shall be
graph (A) and such report shall state
determined by subtracting the
transmit to the Congress a report of
the basis for the determination to ex
amount on such accounts on June 30
any exercise of its authority under
ercise such authority.
of the preceding calendar year from
this paragraph and the reasons for
the amount of such accounts on June
such exercise of authority.
30 of the calendar year involved. In
(C) The supplemental reserve
the case of any such 12-month
authorized under subparagraph (A)
(4) Supplemental reserves.
shallthebe maintained by the Federal
period in which there has been a
(A)
The Board may, upon
Reserve Banks in an Earnings Parti
decrease in the total transaction ac
affirmative vote of not less than 5
counts of all depository institutions,
cipation Account. Except as provided
members, impose a supplemental
the Board shall issue such a regula
reserve requirement on every
in subsection (cXIXAXii), such Earn
ings Participation Account shall
tion decreasing for the next suc
depository institution of not more
receive earnings to be paid by the
ceeding calendar year such dollar
than 4 per centum of its total tra n
Federal Reserve Banks during each
amount by an amount obtained by
saction accounts. Such supplemental
calendar quarter at a rate not more
multiplying such dollar am ount by
reserve requirement may be imposed
than the rate earned on the securi
80 per centum of the percentage
only if—
ties portfolio of the Federal Reserve
decrease in the total transaction ac
during the previous calendar
counts of all depository institutions.
(i)
the sole purpose of such System
re
quarter.
The Board may prescribe
quirement is to increase the amount
The decrease in such transaction ac
rules
and
regulations concerning the
of reserves maintained to a level
counts shall be determined by sub
subject to subparagraph (C); and
22
payment of earnings on Earnings
Participation Accounts by Federal
Reserve Banks under this paragraph.
(D) If a supplemental reserve
under subparagraph (A) has been re
quired of depository institutions for a
period of one year or more, the
Board shall review and determine the
need for continued maintenance of
supplemental reserves and shall
transmit annual reports to the Con
gress regarding the need, if any, for
continuing the supplemental reserve.
(E) Any supplemental reserve
imposed under subparagraph (A)
shall terminate at the close of the
first 90-day period after such re
quirement is imposed during which
the average amount of reserves re
quired under paragraph (2) are less
than the amount of reserves which
would be required during such pe
riod if the initial ratios specified in
paragraph (2) were in effect.
(5)
Reserves related to foreign
obligations or assets. Foreign
branches, subsidiaries, and interna
tional banking facilities of non
member depository institutions shall
maintain reserves to the same extent
required by the Board of foreign
branches, subsidiaries, and interna
tional banking facilities of member
banks. In addition to any reserves
otherwise required to be maintained
pursuant to this subsection, any de
pository institution shall maintain re
serves in such ratios as the Board
may prescribe against—
(A) net balances owned by
domestic offices of such depository
institution in the United States to its
directly related foreign offices and to
foreign offices of nonrelated deposi
tory institutions;
(B) loans to United States
residents made by overseas offices of
such depository institution if such
depository institution has one or
amounts equal to one-eighth o f those
otherwise required by this subsection,
during the second such twelve-month
period in amounts equal to one(C)
assets (including partici
fourth
of those otherwise required,
pations) held by foreign offices of a
during
the third such twelve-month
depository institution in the United
period
in
amounts equal to threeStates which were acquired from its
eighths
of
those otherwise required,
domestic offices.
during the fourth twelve-month
period in amounts equal to one-half
(6) Exemption for certain de
of those otherwise required, and d u r
posits. The requirements imposed
ing the fifth twelve-month period in
under paragraph (2) shall not apply
amounts equal to five-eighths of
to deposits payable only outside the
those
otherwise required, during the
States of the United States and the
sixth
twelve-month
period in amounts
District of Columbia, except that
equal
to
three-fourths
of those other
nothing in this subsection limits the
wise
required,
and
during
the
authority of the Board to impose
seventh
twelve-month
period
in
conditions and requirements on
amounts equal to seven-eighths of
member banks under section 25 of
those otherwise required. This sub
this Act or the authority of the
paragraph does not apply to any
Board under section 7 of the Inter
category of deposits or accounts
national Banking Act of 1978 (12
which are first authorized pursuant
U.S.C. 3105).
to Federal law in any State after
April 1, 1980.
(7) Discount and borrowing. Any
depository institution in which trans
(B)
With respect to any
action accounts or nonpersonal time
bank which was a member of the
deposits are held shall be entitled to
Federal Reserve System during the
the same discount and borrowing
entire period beginning on July 1,
privileges as member banks. In the
1979, and ending on the effective
administration of discount and bor
date of the Monetary Control Act of
rowing privileges, the Board and the
1980, the amount of required
Federal Reserve Banks shall take
reserves imposed pursuant to this
into consideration the special needs
subsection on and after the effective
of savings and other depository in
date of such Act that exceeds the
stitutions for access to discount and
amount of reserves which would have
borrowing facilities consistent with
been required of such bank if the
their long-term asset portfolios and
reserve ratios in effect during the
the sensitivity of such institutions to
reserve computation period im
trends in the national money
mediately preceding such effective
markets.
date were applied may, at the discre
tion o f the Board and in accordance
(8) Transitional adjustments.
with such rules and regulations as it
may adopt, be reduced by 75 per
(A)
Any depository in centum during the first year which
stitution required to maintain
begins after such effective date, 50
reserves under this subsection which
per centum during the second year,
was engaged in business on July 1,
and 25 per centum during the third
1979, but was not a member of the
year.
Federal Reserve System on or after
that date, shall maintain reserves
(CXi) With respect to any
against its deposits during the first
bank which is a member of the
twelve-month period following the ef
Federal Reserve System on the effec
fective date of this paragraph in
tive date of the Monetary Control
more offices in the United States;
and
23
Act of 1980, the amount of reserves
which would have been required of
such bank if the reserve ratios in ef
fect during the reserve computation
period immediately preceding such
effective date were applied that ex
ceeds the amount of required
reserves imposed pursuant to this
subsection shall, in accordance with
such rules and regulations as the
Board may adopt, be reduced by 25
per centum during the first year
which begins after such effective
date, 50 per centum during the sec
ond year, and 75 per centum during
the third year.
and ending on the day before the
date of enactment of the Depository
Institutions Deregulation and
Monetary Control Act of 1980, shall
maintain reserves beginning on such
date of enactment in an amount
equal to the amount of reserves it
would have been required to m ain
tain if it had been a member bank
on such date of enactment. After
such date of enactment, any such
bank shall maintain reserves in the
same amounts as member banks are
required to maintain under this
subsection, pursuant to sub
paragraphs (B) and (CXi).
(ii)
If a bank becomes a
(ii)
Any bank which
member bank during the four-year
draws from membership in the
period beginning on the effective
Federal Reserve System on or after
date of the Monetary Control Act of
the date of enactment of the
1980, and if the amount of reserves
Depository Institutions Deregulation
which would have been required of
and Monetary Control Act of 1980,
such bank, determined as if the
shall maintain reserves in the same
reserve ratios in effect during the
amount as member banks are re
reserve computation period im
quired to maintain under this
mediately preceding such effective
subsection, pursuant to sub
date were applied, and as if such
paragraphs (B) and (CXi).
bank had been a member during
such period, exceeds the amount of
(E)
This subparagraph
reserves required pursuant to this
applies to any depository institution
subsection, the amount of reserves
that, on August 1, 1978, (i) was en
required to be maintained by such
gaged in business as a depository insti
bank beginning on the date on
tution in a State outside the continental
which such bank becomes a member
limits of the United States, and (ii)
of the Federal Reserve System shall
was not a member of the Federal Re
be the amount of reserves which
serve System at any time on or after
would have been required of such
such date. Such a depository insti
bank if it had been a member on
tution shall not be required to maintain
the day before such effective date,
reserves against its deposits held or
except that the amount of such ex
maintained at its offices located in a
cess shall, in accordance with such
State outside the continental limits of
rules and regulations as the Board
the United States until the first day of
may adopt, be reduced by 25 per
the sixth calendar year which begins
centum during the first year which
after the effective date of the Monetary
begins after such effective date, 50
Control Act of 1980. Such a deposi
per centum during the second year,
tory institution shall maintain reserves
and 75 per centum during the third
against such deposits during the sixth
year.
calendar year which begins after such
effective date in an amount equal to
one-eighth o f that otherwise required
(DXi) Any bank which was a
by paragraph (2), during the seventh
member bank on July 1, 1979, and
such year in an amount equal to onewhich withdraws from membership in
fourth of that otherwise required, dur
the Federal Reserve System during
ing the eighth such year in an amount
the period beginning on July 1, 1979,
24
equal to three-eighths of that otherwise
required, during the ninth such year in
an amount equal to one-half of that
otherwise required, during the tenth
such year in an amount equal to fiveeighths of that otherwise required, dur
ing the eleventh such year in an amount
equal to three-fourths of that
otherwise required, and during the
twelfth such year in an amount equal
to seven-eighths of that otherwise
required.
(9) Exemption. This subsection
shall not apply with respect to any
financial institution which—
with
(A) is organized solely to do
business with other financial institu
tions;
(B) is owned primarily by the
financial institutions with which it
does business; and
(C) does not do business with
the general public.
(10) Waivers. In individual cases,
where a Federal supervisory authority
waives a liquidity requirement, or
waives the penalty for failing to
satisfy a liquidity requirement, the
Board shall waive the reserve re
quirement, or waive the penalty for
failing to satisfy a reserve require
ment, imposed pursuant to this sub
section for the depository institution
involved when requested by the Fed
eral supervisory authority involved.
(cXl) Reserves held by a
depository institution to meet the re
quirements imposed pursuant to
subsection (b) shall, subject to such
rules and regulations as the Board
shall prescribe, be in the form of—
(A)
balances maintained f
such purposes by such depository in
stitution in the Federal Reserve Bank
of which it is a member or at which
it maintains an account, except that
(i) the Board may, by regulation or
order, permit depository institutions
to maintain all or a portion of their
required services in the form of vault
cash, except that any portion so per
mitted shall be identical for all
depository institutions, and (ii) vault
cash may be used to satisfy any sup
plemental reserve requirement im
posed pursuant to subsection (b)(4),
except that all such vault cash shall
be excluded from any computation of
earnings pursuant to subsection
(bX4XC); and
to satisfy liquidity requirements which
may be imposed under other provi
sions of Federal or State law.
[ U S . C . ti tle 12, se c . 461 I
* * * * *
(f) The required balance carried by
a member bank with a Federal
Reserve Bank may, under the regula
tions and subject to such penalties as
(B)
balances maintainedmay
by be
a prescribed by the Board of
Governors
of the Federal Reserve
depository institution which is not a
System,
be
checked against and
member bank in a depository institu
withdrawn
by
such member bank for
tion which maintains required reserve
the
purpose
of
meeting existing
balances at a Federal Reserve Bank,
liabilities.
in a Federal Home Loan Bank, or in
the National Credit Union Adminis
tration Central Liquidity Facility, if
such depository institution, Federal
Home Loan Bank, or National Credit
Union Administration Central Li
quidity Facility maintains such funds
in the form of balances in a Federal
Reserve Bank of which it is a
member or at which it maintains an
account. Balances received by a de
pository institution from a second de
pository institution and used to
satisfy the reserve requirement im
posed on such second depository in
stitution by this section shall not be
subject to the reserve requirements of
this section imposed on such first
depository institution, and shall not
be subject to assessments or reserves
imposed on such first depository in
stitution pursuant to section 7 of the
Federal Deposit Insurance Act (12
U.S.C. 1817), section 404 of the Na
tional Housing Act (12 U.S.C. 1727),
or section 202 of the Federal Credit
Union Act (12 U.S.C. 1782).
* * * * *
(e)
To add to the number o f cities
classified as reserve cities under ex
isting law in which national banking
associations are subject to the reserve
requirements set forth in section
[nineteen] of this Act; or to reclassify
existing reserve cities or to terminate
their designation as such.
I U . S . C . . t i t l e 12. s e c . 2 4 » e l . |
* * * * *
Section 25 of the Federal Reserve
Act provides, in part, as follows:
1. C apital an d su rp lu s req u ired to exercise
powers
IU .S .C .
t i t l e 12. s e c . 4 6 4 |
(g) In estimating the reserve
balances required by this Act,
member banks may deduct from the
amount of their gross demand
deposits the amounts of balances due
from other banks (except Federal
Reserve Banks and foreign banks)
and cash items in process of collec
tion payable immediately upon
presentation in the United States,
within the meaning o f these terms as
defined by the Board of Governors
of the Federal Reserve System.
I U . S . C . . t i t l e 12. s e c . 4 6 5 . |
Sec. 25. Any national banking
association possessing a capital and
surplus of $1,000,000 or more may
file application with the Board of
Governors of the Federal Reserve
System for permission to exercise,
upon such conditions and under such
regulations as may be prescribed by
the said board, the following powers:
I U . S . C . . t i t l e 12. s e c . 6 0 1 . 1
Section 25(a) of the Federal Reserve
Act provides, in part, as follows:
6. Banking powers
Section 11 o fth e Federal Reserve
Act provides, in part, as follows:
(a) To purchase, sell, discount, and
negotiate, with or without its endorse
ment or guaranty, notes, drafts,
The Board of Governors of the
checks, bills of exchange, accep
Federal Reserve System shall be
tances, including bankers’ accep
authorized and empowered:
tances, cable transfers, and other
evidences of indebtedness; to pur
* * * * *
chase and sell with or without its in
dorsement or guaranty, securities, in
(2)
The balances maintained to
meet the reserve requirements of
(c)
To suspend for a period not ex cluding the obligations of the United
States or of any State thereof but
subsection (b) by depository institution
ceeding thirty days, and from time to
not including shares of stock in any
in a Federal Reserve Bank or passed
time to renew such suspensions for
corporation except as herein pro
through a Federal Home Loan Bank
periods not exceeding fifteen days,
vided; to accept bills or drafts drawn
or the National Credit Union Ad
any reserve requirements specified in
upon it subject to such limitations
ministration Central Liquidity Facility
this Act.
and restrictions as the Board of
or another depository institution to a
Governors o f the Federal Reserve
Federal Reserve Bank may be used
I U . S . C . . t i t l e 12. s e c . 248 <c).|
25
System may impose; to issue letters
of credit; to purchase and sell coin,
bullion, and exchange; to borrow
and to lend money; to issue deben
tures, bonds, and promissory notes
under such general conditions as to
security and such limitations as the
Board of Governors of the Federal
Reserve System may prescribe; to
receive deposits outside of the United
States and to receive only such
deposits within the United States as
may be incidental to or for the p u r
pose of carrying out transactions in
foreign countries or dependencies or
insular possessions of the United
States; and generally to exercise such
powers as are incidental to the
SUPPLEMENT TO REGULATION D
As amended effective for reserves required to be maintained during the seven-day period beginning November 13,1980,
against deposits outstanding during the seven-day period beginning on October 30,1980.
SECTIO N 204.9— R ESERV E
R E Q U IR EM E N T RATIOS
(a) Reserve percentages. The
following reserve ratios are prescribed
for all depository institutions, Edge
and Agreement Corporations and
United States branches and agencies
of foreign banks:
Category
Net transaction
accounts
$0-$26 million
Over $26 million
Reserve
Requirements
(b) Reserve ratios in effect during
last computation period prior to
September 1, 1980.
Category
Deposit
Tranche:
over $2 million$10 million
over $10 million$100 million
Nonpersonal time
deposits
over $100 million$400 million
By original
maturity (or notice
period)
less than 3'/2 years
3 ‘/2 years or more
Eurocurrency
liabilities
3%
3%
powers conferred by this Act or as
may be usual, in the determination
of the Board of Governors of the
Federal Reserve System, in connec
tion with the transaction of the
business of banking or other finan
26
7%
$140,000 + 9V2%
of amount over
$2 million
Less than 180
days
$0-5 million
over $5 million
180 days to 4
years
4 years or more
3%
6%
2Vi%
1%
Accounts authorized pursuant to Sec
tion 303 of Public Law 96-221 of
$900,000+ l l 3/«%
fered by member banks located in
of am ount over
States outside Connecticut, Maine,
$10 million
Massachusetts, New Hampshire, New
Jersey, New York, Rhode Island and
$11,475,000 +
Vermont
12%
123/4% of
amount over
Club accounts
3%
$100 million
over $400 million
$49,725,000 +
16‘/4% of amount
over $400 million
Savings deposits
3%
0%
(subject to 3%
minimum
specified by law)
By initial m aturi
ty:
Net D emand
Deposits
0-$2 million
3% of amount
$780,000 plus
12% of amount
over $26
million
Reserve
Requirement
Time deposits
cial operations in the countries, col
onies, dependencies, or possessions in
which it shall transact business and
not inconsistent with the powers
specifically granted herein. Nothing
contained in this section shall be
construed to prohibit the Board of
Governors of the Federal Reserve
System, under its power to prescribe
rules and regulations, from limiting
the aggregate amount of liabilities of
any or all classes incurred by the
corporation and outstanding at any
one time. Whenever a corporation
organized under this section receives
deposits in the United States autho
rized by this section it shall carry
reserves in such amounts as the
Board of Governors of the Federal
Reserve System may prescribe for
member banks of the Federal
Reserve System.
parent foreign bank is controlled by
a foreign company which owns or
controls foreign banks that in the
aggregate have total worldwide con
solidated bank assets in excess of
$1,000,000,000; or (C) its parent
foreign bank is controlled by a group
of foreign companies that own or
control foreign banks that in the ag
gregate have total worldwide con
solidated bank assets in excess of
$ 1,000,000,000.
Section 7 of the International Bank
ing Act of 1978 provides, in part, as
follows:
the Federal Reserve Act and may
prescribe any ratio, not more than
22 per centum, for any obligation of
any such Federal branch or Federal
agency that the Board may deem
reasonable and appropriate, taking
into consideration the character of
business conducted by such institu
tions and the need to maintain
vigorous and fair competition be
tween and among such institutions
and member banks. The Board may
impose reserve requirements on
Federal branches and Federal agen
cies in such graduated manner as it
deems reasonable and appropriate.
Sec. 7 (aXIXA) except as provided
in paragraph (2) of this subsection,
subsections (a), (b), (c), (d), (f), (g),
(i), (j), (k), and the second sentence
of subsection (e) of section 19 of the
Federal Reserve Act shall apply to
every Federal branch and Federal
agency of a foreign bank in the
same manner and to the same extent
as if the Federal branch or Federal
agency were a member bank as that
term is defined in section 1 of the
Federal Reserve Act; but the Board
either by general or specific regula
tion or ruling may waive the
minimum and maximum reserve
ratios prescribed under section 19 of
For purposes of computing the
reserves under this Part, that would
haveinbeen required using the reserve
(B)
After consultation and
ratios that were in effect on August 31,
cooperation with the State bank
1980, the reserve ratio on time
supervisory authorities, the Board
deposits of a member bank shall be
may make applicable to any State
the average time deposit ratio of the
branch or State agency any require
member bank during the 14-day
ment made applicable to, or which
period ending August 6, 1980, except
the Board has authority to impose
that the reserve ratio on time de
upon, any Federal branch or agency
posits of a nonmember bank that was
under subparagraph (A) of this
a member bank on or after July 1,
paragraph.
1979, but which became a non
(2)
A branch or agency shall be member bank before March 31,
1980, may be the average time
subject to this subsection only if (A)
deposit ratio of the nonmember d u r
its parent foreign bank has total
worldwide consolidated bank assets
ing the 14-day period ending August
in excess of $1,000,000,000; (B) its
27, 1980.
IU .S .C ., t id e 12. ICC M 5 . |
[ U . S . C . . t i t l e 12. s e c . 3 I 0 S . |
27
APPENDIX B
Questions and Answers About Regulation D
NONTRANSFERABILITY
2. Not Negotiable.
Definition and Application
Q l. What does "Not Trans ferable"
mean?
A. “ Not Transferable” means that a
time deposit may not be transferred
by the named depositor except in the
following ways:
1. a change in ownership that is
reflected on the books or records
of the institution;
2. a pledge as collateral for a loan;
or
3. a transaction that occurs due to
circumstances arising from death,
incompetency, marriage, divorce,
attachment, or otherwise by op
eration of law.
In other words, in addition to pledges
and transfers by operation of law,
any transaction that is reflected on
the books of the institution (thus
giving the institution an opportunity
to reclassify the deposit, if necessary,
as personal/nonpersonal for reserve
reporting purposes) is permissible.
The following examples of legends
concerning transferability may be
used:
1. “ Not Transferable.”
2. “Transferable only on the rec
ords of the institution.”
3. “Transferable only with the per
mission of the institution.”
4. “Not transferable except as
collateral for a loan or as other
wise permitted by regulations of
the Federal Reserve Board.”
The following statements will not
satisfy the requirement concerning
nontransferability:
1. Not Assignable.
28
Q2. Explain the difference between
"nontransferable" and "non
negotiable. "
A. A negotiable instrument is one
which a buyer may take free of most
defenses that the debtor on the in
strument has against the original
creditor. For example, if a salesman
accepts a promissory note in ex
change for a product, and the
product is defective, the buyer may
refuse to pay the salesman when the
note becomes due; however, if the
salesman sells the note to another
person and the note is negotiable,
then the buyer’s contention that the
product is defective may not, in and
of itself, be a successful defense to
an action for payment brought by the
third person. Negotiability is con
cerned simply with the cutting off of
defenses. A nonnegotiable instrument
can be transferred; the difference is
that the buyer of the instrument is
subject to the same defenses to which
the original creditor was subject. A
person who is willing to accept the
risk of those defenses is willing to
buy a nonnegotiable instrument as
well as a negotiable one. The Board
of Governors is concerned that if
transferability were not prohibited, a
secondary market in nonnegotiable
certificates of deposit might develop
in order to avoid reserve require
ments, and that nonreservable personal
time deposits would be sold to cor
porations. Such a practice could have
an adverse impact upon the ef
fectiveness of monetary policy.
Q3. Does an institution have to notify
its customers who have accounts out
standing prior to October 1, 1980, o f
the new nontransferability provision
o f the regulation?
A. No. Deposits issued to natural
persons before October 1, 1980, do
not have to be nontransferable to be
regarded as personal time deposits.
However, if an institution modifies its
existing contracts to make such ac
counts nontransferable, then it should
notify its depositors of the change.
Nontransferability Legend
Q4. Do NO W account statements
need a nontransferability legend?
A. No. NOW accounts are transac
tion accounts which are reservable
even if held by a natural person.
Transaction accounts need not have
the nontransferable legend on any
document.
Q5. Passbook savings accounts opened
prior to October 1. 1980. need not
have a nontransferability legend
placed on them at the time o f
opening. Does the legend need to be
stamped on such accounts i f deposits
are made after October 1?
A. No. Any personal savings or time
deposit account originally issued
before October 1, does not have to
carry a legend concerning trans
ferability on any document evidencing
its existence, even if additional de
posits are made to the account or
the deposit is automatically renewed
after October 1, 1980.
Q6. The legend need not be placed on
a time deposit issued before October
I that is automatically rolled-over af
ter that date. I f the institution sends
a letter to the depositor reminding
him o f the upcoming roll-over, must
the letter indicate nontransferability?
A. No. However, if the institution
issues a new certificate to the
depositor when the old one matures,
the term nontransferable must appear
on the deposit.
Q7. Can depository institutions stamp
the words "nonnegotiable and
nonassignable." rather than "non
transferable." on time and savings
deposits documents?
A. No. It appears that in some
jurisdictions transfers may be made
that are not considered assignments.
Therefore, “ nonassignable” may not
be used in place of “nontransferable.”
The inclusion of other words along
with “nontransferable” is permissible
so long as the latter term is not con
ditioned by the other words. “ Nonne
gotiable” may be added to the legend
but may not be used as a substitute
for “nontransferable.”
Q8. In order for a deposit issued to a
natural person on or after October I,
1980. to be considered a personal time
deposit, where must the legend re
garding nontransferability appear?
A.
1. For certificates of deposit or share
certificates, it must appear on the
certificate itself.
2. For passbook accounts, it must be
on the passbook itself.
3. For any time or savings deposit not
evidenced by a certificate or pass
book, it must be on the agreement
or contract which evidences the ac
count if a copy of the agreement or
contract is given to the customer
when the account is opened.
A legend of nontransferability is not
required on any periodic statements
where such legend appears on a cer
tificate, passbook, contract or agree
ment given to the depositor. For any
time or savings deposit not evidenced
by a certificate or passbook, if a copy
of the agreement is not given to the
customer, then the nontransferability
legend must be on periodic statements
sent to the customer. The legend does
not have to appear on the following:
deposit slips, teller receipts, club ac
count coupons, identification cards.
IRS Form 1099. and signature cards
and other documents retained by the
depository institution as its own
records.
Q9. I f a time or savings deposit is not
evidenced by a certificate or passbook,
may the nontransferability legend ap
pear on a disclosure statement given
to the depositor by the institution at
the time o f opening the account?
A. Yes, under such circumstances the
nontransferability legend may appear
in a disclosure statement required by
Federal or State law or regulation that
sets forth the terms of the deposit ac
count.
Q10. Personal savings and tim e ac
counts for which depositors receive
only monthly statements rather than
passbooks or certificates o f deposit are
required to include the legend con
cerning nontransferability on the peri
odic statement i f no contract, agree
ment or disclosure statement required
by law is given to the depositor carry
ing the nontransferability legend. In
stead o f placing the legend on the
statement itself may the legend ap
pear in a separate piece o f paper
mailed to the depositor along with the
monthly statement?
A. No, the nontransferability legend
must appear on a document repre
senting the account such as a certifi
cate, passbook, contract, disclosure
statement, or periodic statement. A
separate piece of paper enclosed with
the monthly statement would not be
a document representing the account.
Q l l .A n institution issues a monthly
statement to its natural person deposi
tor on which is reported the balance
in a transaction account, as well as the
balance in a personal savings or time
deposit account. Need the statement
have the nontrans ferability legend?
A. Yes, unless the depositor previ
ously received a copy of the deposit
contract or disclosure statement with
the legend. If the statement indicates
funds held in a personal savings or
time deposit account, it must state
that such account is nontransferable
even though other types of accounts
are also listed.
Miscellaneous
Q12. A re Holiday Club accounts con
sidered to be trans ferable i f the
depository institution has accepted an
instruction to send the paym ent check
to a third party?
A. So long as the instruction is
received at the time of withdrawal,
transmittal of a payment check for a
Holiday G u b account to a third party
does not constitute a transfer. This is
the equivalent of closing a time or
savings account and remitting the
proceeds to someone other than the
depositor. If the instruction were ac
cepted at the opening of the account,
then the depositor is presumed to have
a transferable deposit.
Q13 . Six-month money m arket cer
tificates are required by Regulation Q
to be nonnegotiable. May the non
negotiability requirement be omitted
from such certificates i f they state that
they are nontransferable?
A. Yes
Q14./4 personal time deposit may be
trans ferred under Regulation D i f the
depository institution either changes
the name o f the account holder on its
books or issues a replacement deposit
instrument with the new owners'
name. I f the depository institution
takes either o f these actions, does this
constitute an early withdrawal o f a
time deposit under Regulation Q?
29
A. No. Under existing Board in
terpretations, the sale by a depositor
of his other time deposits does not
constitute early withdrawal and the
depository institution may record that
transfer on its books without having to
treat the transfer as an early with
drawal. The principal, maturity, and
interest rate of the deposit must be
unchanged.
TRANSACTION ACCOUNTS
Definition and Application
Qi . A re savings accounts subject to
A C H debits and credits included in
the definition o f transaction accounts?
A. Under the definition of “tran s
action account,” (section 204.2(eX6))
orders received from an automated
clearing house (ACH) to debit an ac
count constitute preauthorized trans
fers. Such an account must be
treated as a transaction account unless
the deposit contract limits the num ber
of such debits to three per month and
it is the practice of the institution to
limit such transfers to no more than
three. If credits only may be made to
the account, then it is not a tran s
action account, regardless of the
number of credits made per month.
Q2. I f a customer has a savings ac
count from which no third party or
automatic withdrawals are permissible
except for a weekly transfer to the
depositor's club account, is that sav
ings account a transaction account?
A. Yes. The weekly transfer falls
within the definition of a pre
authorized transfer. If the account
were limited to three such transactions
per month, then the account would
not be treated as a transaction ac
count. In this case, if the deduction
were made every two weeks, then the
three-transfer-per-month limitation
could be met.
30
Q3 . Money market certificate owners
are often allowed to have their interest
credited periodically by the institution
to another account. Does that make
the certificate a transaction account?
A. No. The crediting of interest earned
on one account to another account
is not a “transfer” from the account
on which the interest was earned.
Q4. Is a savings account a transaction
account merely because a depositor is
permitted to mail a request to an in
stitution to transfer funds to a third
party?
A. No. The Board o f Governors has
always treated letter requests as the
functional equivalent to the depositor
coming into the banking office; thus,
the ability to make transfers from a
personal account in response to a let
ter mail request does not make that
account a transaction account. Trans
fers in response to requests by
telephone or other electronic means
are not covered by this rule; the
capability to m ake such transfers may
cause the account to be a transaction
account.
Q5. Does an account which by its terms
or pursuant to an agreement per
mits transfers to a checking, NOW ,
or share draft account to cover oc
casional overdrafts fall within the
definition o f transaction account?
A. A num ber of institutions have en
tered into agreements with their
customers providing that in the event
the customer should overdraw a
checking, NOW, or share draft ac
count, the institution will transfer
from that customer’s savings account
an amount sufficient to cover the over
draft. Under Regulation D, an ac
count, including a regular savings ac
count or regular share account, is con
sidered to be a transaction account, if
under its terms, or by practice of the
depository institution, the depositor is
permitted or authorized to make more
than three withdrawals per month for
purposes of transferring funds to
another account or for making a
payment to a third party by means of
a preauthorized or telephone
agreement, order, or instruction. The
availability of the overdraft protection
plan that is described above would not
in and of itself require that the
savings account or share account from
which transfers could be made be
regarded as a transaction account if
no more than three such transfers are
permitted or authorized in a calendar
month. If, however, more than three
transfers from a savings account not
otherwise regarded as a transaction
account are permitted, or if the plan
is promoted as something other than
overdraft protection, then the savings
account would be regarded as a trans
action account and the entire balance
in the account would be subject to
transaction account reserve
requirements.
Q6. Is a savings account a transaction
account by virtue o f transfers being
made into the account by telephone
or preauthorized order?
A. No. The fact that transfers are
made into an account does not make
that account a transaction account.
Q7. I f under the terms o f a savings
account, a depositor appearing at the
depository institution is perm itted to
withdraw funds in the form o f a
cashier's or officer's check, endorse
the check and redeposit the funds in
an account o f another person at the
same institution, would such an ac
count be considered a transaction ac
count?
A. No. The ability of depositor to
make withdrawals from an account
by appearing at the institution in
person does not render an account a
transaction account regardless of the
m anner of payment of the with
drawal to the depositor. In this
regard, an account would not be a
transaction account merely because a
depositor appearing in person at the
institution can withdraw funds direct
ly in the form of cash, check (even if
made payable to a third party), money
order, or travelers' checks. Note, how
ever, that, if a depositor is able to trans
fer funds from his savings account
through an ATM or RSU to another
person’s account at the institution, that
savings account is a transaction
account.
Q8 . M any institutions offer their
depositors "prestige cards" which
allow the depositors to withdraw
funds from their savings accounts by
filling out a withdrawal slip at
another institution. This type o f ser
vice is also known as “traveler's con
venience." The institution disbursing
the fu n d s sends the withdrawal slip
to the depositor's institution and ob
tains paym ent through the collection
process. Does this service m ake the
savings account a transaction ac
count?
A. No. The transaction is viewed
simply as the depositor making a di
rect withdrawal from his savings ac
count.
Q9. A depositor with a savings ac
count leaves a supply o f deposit slips
with the depository institution. The
deposit slips are fo r a checking ac
count held by the depositor at
another depository institution. The
depositor telephones the institution
from time to time and requests that
funds he withdrawn from his savings
account in the form o f a check and
that the check, along with the de
posit slip, he mailed or delivered to
the institution holding his checking
account. In some instances the de
positor may have standing instruc
tions with the institution to mail or
deliver funds at certain intervals.
Does this practice make that savings
account a transaction account?
A. Yes. The capability of making
such telephone or preauthorized
transfers could render an account a
transaction account since the transfer
is made to a third party, i.e. the
depository institution at which the
checking account is maintained.
However, if such transfers were
limited to three or less per calendar
month (and the account did not
otherwise meet the definition of a
transaction account) then the account
would not be regarded as a transac
tion account.
Q10. How is a depository institution to
treat compensating balances o fth e
United States Government kept in
Treasury Tax and Loan deposit ac
counts?
A. If the deposit is subject to im
mediate withdrawal by the Govern
ment, then it must be treated as a
demand deposit of the Government
and reserved against as a transaction
account. Note balances in TT&L ac
counts are exempt from reserves and
other funds received from the U.S.
Government in the form of borrow
ings, rather than deposits, are ex
empt from reserves.
Three Transfers Per
Calendar M onth Rule
(A “Calendar M onth” includes any
statement cycle or similar period of
at least 4 weeks.)
Q l l . I f a depository institution permits
ACH debits to an account and does
not limit the num ber o f such debits
by contract to three per calendar
month, is the account regarded as a
transaction account?
A. Yes. A depository institution must
regard an account that may permit
in excess of three ACH debits per
month as a transaction account even
though three or fewer transfers per
calendar month actually are being
made. Since ACH debits are re
garded as preauthorized transfers,
they must be limited to three or
fewer per calendar month in order
for the account not to be regarded
as a transaction account.
Q12. Regulation E — Electronic Funds
Transfers (12 CFR Part 205) requires
that amendments to certain account
agreements cannot be effective unless
the customer is given 21 days' writ
ten notice. I f a depository institution
desires to am end its account agree
ment to limit the num ber o f preau
thorized or telephone transfers to
three or less per calendar m onth and
the account is subject to the Regula
tion E notice requirement, when is
the account agreement change effec
tive fo r Regulation D reserve require
ment purposes?
A. For purposes of reserve require
ments, an amendment to an account
agreement is regarded as effective
when sent by the depository institu
tion. Accordingly, an account for
which a Regulation E change of
terms notice has been sent may be
regarded as exempt from the defini
tion o f “transaction account” even
though more than three transfers
could be effected during the interim
period until the Regulation E notice
becomes effective.
Q13. Is notification to customers re
quired i f a depository institution de
sires to establish a limit on preau
thorized and telephone transfers o f
three per calendar month?
A. As a general matter, the Board
has had a long standing position
that customers should be notified in
writing of any change in the terms
of a deposit account that is adverse
to the customer (12 CFR 217.148).
31
The necessity of notifying customers
of a limit imposed on telephone and
preauthorized transfers depends on a
number of factors, including other
regulatory requirements, such as
Regulations E and 0 and those im
posed under state law. A depository
institution that has not explicitly pro
vided in its deposit agreement or
other representations the right of its
depositors to make withdrawals by
telephone may not necessarily have
to send notice to its customers that
such service will be limited in the
future. However, a depository institu
tion that provides by written contract
or agreement that telephone or pre
authorized orders may be made
would be required to notify each cus
tomer in writing of the change in
terms. This notice, however, may be
required by local law and disclosure
requirements of other Federal and
state regulatory requirements, not by
Regulation D.
Q 14. I f under the terms o f an account,
a depositor is not p erm itted to m ake
more than three telephone or preau
thorized transfers p e r calendar
month, what steps m ust a depository
institution take to prevent more than
three transfers? Is a fourth transfer
in a calendar month absolutely p ro
hibited?
A. As stated in the Federal Register
preamble to Regulation D, “ A depos
itory institution is required to establish
a system or other procedure to insure
that no more than three [telephone
or preauthorized] transfers are made
during any calendar month from such
accounts.” (AS Federal Register
56009) The purpose to be served by
a monitoring system is to establish
that it is not the practice of the de
pository institution (12 CFR
204.2(eX6)) to allow more than three
telephone or preauthorized transfers,
notwithstanding a deposit contract
term to that effect. A system under
which a depository institution can
identify prior to making a requested
32
transfer whether the limit is being
adhered to would meet this require
ment.
An institution also is permitted to
monitor on an ex post basis its ac
counts that have limited telephone
and preauthorized transfer privileges.
Under this procedure, an institution
may determine which accounts made
more than three transfers in a p ar
ticular month. If the institution con
tacts the customer and informs him
that the contract terms were violated
and/or that the institution has other
account services available if the cus
tomer desires an account for transac
tion purposes, this would indicate
that it is not the practice of the in
stitution to allow more than three
transfers. Other factors that would
be relevant in determining whether it
is the practice of the institution to
allow more than three telephone or
preauthorized transfers per month
under an ex post monitoring system
would be the number of accounts
that have restricted transfer privileges
and the relative num ber that exceed
the established limit.
It also is permissible for an institu
tion to provide by contract that a
fourth transfer in a calendar month
will constitute an agreement by the
customer to accept a new type of de
posit account that allows unlimited
telephone or preauthorized transfers.
In this regard, a change in pricing
in the new account may serve as a
disincentive to customers making the
fourth transfer. At the time the
fourth transfer is made and into the
future, the account would then be
classified as a transaction account.
(An institution may not establish an
arrangement whereby a transaction
account is converted to a nontransac
tion account because three or less
transfers are made in a particular
month.)
As an alternative approach to satisfy
the three transfer per month rule, in
stitutions may use a procedure of re
classifying as transaction accounts
those accounts that incur more than
three telephone or preauthorized
transfers in a calendar month. Once
an account is classified as a transac
tion account, then it may not revert
to nontransaction account status.
Q 1 5 ./4 re intra-family allocations o f a
direct payroll deposit regarded as
part o f th e three telephone or preau
thorized transfers allowable per
month in section 204.2(e)(6)?
A. Direct deposit transactions at
many depository institutions require
that all funds be deposited initially
only to one account of a customer.
Institutions and depositors have en
tered into agreements whereby funds
involving direct deposit transactions
are subsequently transferred to other
accounts of the employee or his or
her family at the same institution.
Where a deposit is made directly to
one account but within a very short
time routine disbursements of a por
tion of a payroll deposit are made to
family member accounts or other ac
counts of the depositor, such dis
bursements are an element of the de
posit transaction and are not to be
regarded as “transfers.” Thus, the
capability of a depositor to distribute
funds in this manner would not in
and of itself render an account to
which the payroll funds are initially
deposited to be a transaction ac
count.
T IM E D E P O S IT S
(AN D SA V IN G S D E P O S IT S )
D efinition— P ersonal/N onp ersonal
Q l . M ust passbook savings be broken
down between personal and nonper
sonal?
A . Yes. Savings accounts are treated
as a class of time accounts, and
therefore savings deposits must be
classified as personal or nonpersonal
and reported separately.
Q 2 .A re time deposits o f a “personal
corporation" considered to be per
sonal time deposits?
A. A time deposit of any corpora
tion, including a corporation owned
by one person, is non personal. In
order to be a personal time deposit,
the entire beneficial interest of a
nontransferable time deposit must be
held by a natural person(s) or a sole
proprietorship.
Q3 .A re tim e deposits o f a n ' ‘estate' ’
considered to be personal tim e d e
posits?
A. A time deposit held in the name
of an estate will be personal or non
personal depending on the status of
the named beneficiaries of the estate.
If all of the beneficiaries are natural
persons, the deposit is a personal
time deposit. If any beneficiary is
not a natural person, the deposit is
nonpersonal. Creditors of the estate
are not considered beneficiaries of
the estate.
shall be classified as personal only if
they are nontransferable and if the
entire beneficial interest is held by
natural persons. If any beneficial in
terest is held by other than a natural
person, no m atter how small the
beneficial interest held, the entire de
posit shall be classified as nonper
sonal.
Q 6 M re holiday or vacation club ac
counts reservable?
A. Club accounts are treated as
either time or savings deposits and
are either personal or nonpersonal. If
the deposit qualifies as a personal
time or savings deposit, it is not
reservable.
Q 7. Are Keogh (or Defined Benefit
Keogh) Accounts in the name o f a
partnership excluded from reserve
requirements?
A. Yes. Nontransferable time depos
its held in Keogh or IRA accounts
are presumed to be for the beneficial
interest of individuals under Section
204.2(fX2).
plans, profit-sharing plans, or other
similar plans classified as personal or
nonpersonal tim e deposits?
Q8./1 bearer certificate o f deposit is
sued to a natural person prior to
O ctober I, 1980, is exem pt from re
serve requirements on nonpersonal
tim e deposits. The institutions have
no record o f th e purchasers o f these
bearer CDs; a record o f the owner is
m ade only at maturity, when the
holder obtains the interest on the
CD and m ust record his identity for
tax purposes. Is a depository institu
tion required to regard the amount
o f all bearer CDs issued prior to O c
tober I, 1980, as nonpersonal time
deposits i f they cannot show that
they were issued to natural persons?
A. The classification of such deposits
as personal or nonpersonal depends
on the terms of the specific plan un
derlying the deposit. Such deposits
A. No. If bearer CDs have fixed
maturities, depository institutions are
permitted to estimate the distribution
of such deposits between personal
Q 4 . Is an account personal i f it is
held in the name o f an association
such as a bowling club or vacation
club, or o f a monastery or convent?
A. No. Accounts in which any
beneficial interest is held by anyone
other than a natural person are non
personal.
Q 5 .i4 re the trust deposits o f pension
and nonpersonal by use of reason
able sampling techniques. Estimates
may be based on past experience,
current redemptions, or other reason
able inquiry.
For deposits issued on or after Oc
tober 1, 1980, depository institutions
are required to record the actual
distribution between personal and
nonpersonal time deposits. O f course,
all transferable time deposits, in
cluding negotiable or bearer CDs,
are nonpersonal time deposits regard
less of to whom they are issued or
who holds any beneficial interest in
the deposit.
Q9 .Escrow accounts may be treated
as personal savings or time accounts
if the entire beneficial interest in the
funds is held by natural persons.
Does this rule apply to tenant secu
rity deposits?
A. Yes. If all of the tenants whose
security deposits are held in an ac
count by a landlord are natural per
sons, that account may be treated as
personal. If a landlord has both n a
tural person and corporate or organi
zational tenants, the landlord could
be asked to place the security depos
its of natural persons in a separate
account, and that account could be
treated as personal.
Q10./4 re tim e deposits issued to the
Bureau o f Indian Affairs as custo
dian for an Indian tribe holding the
entire beneficial interest in the funds
personal or nonpersonal?
A. Such deposits are nonpersonal
since an Indian tribe is considered to
be an organization or association.
D efinition— N atural Persons
o i l . Because a transfer o f a time d e
posit to an estate upon the death o f
33
the owner need not be done with no
tice to the institution, how can the
institution be required to determine
whether all o f the beneficiaries are
natural persons?
A. If such a transfer occurs without
notice to the institution, then it need
not make the determination. How
ever, if the institution is asked to
change the name on the account to
that of the estate, then it must make
that determination.
Q 12. The account o f a decedent's es
tate is personal only if all o f th e
beneficiaries are natural persons. In
many cases, this is impossible to d e
termine. For example, many wills
have contingent interests, in which
any remainder will go to a charity.
Also, many wills give the executor a
power o f appointment, and it may
not be known who the executor will
appoint. Also, many institutions do
not accept wills on advice o f counsel
in order to avoid being held liable
f o r not acting in accordance with the
will. The same is true in many cases
f o r trusts. How are these cases to be
treated?
A. The regulation requires that bene
ficiaries be natural persons in order
to treat the account as personal. Re
mainder interests and powers of a p
pointment may be ignored. In addi
tion, an institution may reasonably
rely on the representation of the ex
ecutor or trustee that all benefici
aries, with the exception of contin
gent interests and powers of appoint
ment, are natural persons, so long as
the institution does not know and
has no reason to know that the con
trary is true.
Q13 . M any deceden ts' estates are in
the hands o f the public administrator
because the person died intestate
(i.e., without a will). In such cases,
how is the beneficial interest to be
determined?
34
A. In the case of decedents’ estates
in the hands of the administrator,
the funds usually end up in the
hands of natural persons or are es
cheated to the State. For purposes of
convenience, these accounts may all
be treated as personal.
Q 14. M any trust departm ents often
place funds in a single time or sav
ings account in the commercial d e
partm ent o f th e institution. M ay an
institution determine the proportion
o f funds in that account that are al
locable to trusts or estates in which
the entire beneficial interest is owned
by natural persons and regard that
amount as a personal deposit? M ay
the institution establish a percentage
o f th e account that is personal and
use that percentage each day?
A. No. The trust department may
place its funds in two accounts, one
personal and one nonpersonal, but
the funds in the personal account
must be from trusts and estates in
which the beneficial interest is held
entirely by natural persons, and this
may not be determined by estimation
or percentages.
Q 15. Depository institutions may ac
cept the representations o f trustees, ex
ecutors, and escrow agents that the en
tire beneficial interest o f funds in a
time or savings account are natural
persons in order to regard the ac
count as personal. M ust that repre
sentation be m ade in writing?
A . Yes. However, the representation
may simply be noted on the signa
ture card or other instrument evi
dencing the account that is signed by
the trustee, executor or escrow agent.
Q 1 6 M savings or time deposit in the
name o f a trustee may be treated as p er
sonal only i f all o fth e beneficiaries are
natural persons. Does this rule apply
in the case o f Totten trusts?
A. No. Totten trusts are not true
trusts covered by this rule. A Totten
trust is one in which the owner of
the funds states that the account is
in the name of himself in trust for
another, and the intent of the depos
itor is simply to make it possible for
the other to obtain the funds from
the institution upon the depositor’s
death. The intent of the depositor is
not to give any beneficial interest to
the other during the depositor’s life
time; the depositor has the right to
revoke the Totten trust at any time,
and the other has no beneficial inter
est in the funds during that time.
Accordingly, a Totten trust in the
name of a natural person in trust for
an entity that is not a natural person
(for example, “Mary Jones in trust
for St. Lake’s Church” ) is personal,
and exempt from reserves, so long as
the depositor has the right to revoke
the designation. An institution is re
sponsible for determining that ac
counts in such names are in fact
Totten trusts rather than real trusts.
If the institution is satisfied that
there is no real trust involved in op
erating such an account, it may treat
the account as a Totten trust.
Escrow A ccounts
Q17 . How should escrow accounts be
classified on the reports?
A . If there is an agreement between
the depositor and the institution re
quiring the funds to be placed in a
specific type of account (demand,
savings, or time), the escrow funds
must be reported as that type of ac
count. If there is no such agreement,
the institution, acting as agent for it
self, may place those funds in the
type of account the institution deems
appropriate.
Q18 . Does an institution have to go
through its entire mortgage portfolio
in order to identify each mortgagor
as individual or corporate for the
purpose o f separating its mortgage
escrow account into two accounts,
one personal and one nonpersonal?
ing the outcome o f litigation. In the
case o f funds awaiting disposition
due to litigation, how may a deter
mination o f ownership be made?
A. In order to treat an escrow ac
count as a personal savings account,
all of the funds in the escrow ac
count must be received from natural
persons. Thus, if an institution has
both individuals and corporations as
mortgagors, the escrow account must
be treated as nonpersonal unless a
separation into two accounts is made
and personal and nonpersonal funds
are segregated.
A. In the case of funds awaiting dis
position due to litigation, the institu
tion will need to determine from
whom the funds were obtained. That
person is treated as having the bene
ficial interest until final disposition is
determined. If that person is a n atu
ral person, then the account may be
treated as personal.
Q 19 . How is the determination to be
m ade as to whether escrow funds
held in a tim e or savings account,
established in connection with a loan
extended by the same institution, are
personal or nonpersonal deposits?
A. Such escrow accounts are to be
identified as either personal or non
personal based on the identity of the
party who has the beneficial interest
in the account, as determined by
State law. If the beneficial interest is
held entirely by natural persons, the
account may be classified as per
sonal.
Q 20 . How are other escrow accounts
determ ined to be personal or nonper
sonal?
A. Other escrow accounts, such as
landlord security deposits and earnest
money deposits, are identified as per
sonal or nonpersonal deposits on the
basis of whether, under State law,
the entire beneficial interest in the
funds is held by a natural person.
M iscellaneous
Q21 . A financial administrator fora
court holds funds in time deposit ac
counts on behalf o f the court pen d
Q 22. Which type o f transactions involv
ing mortgage pass-through securities
and mortgage loan participations are
reservable under Regulation D?
turity o f eligible bankers acceptances
exempt from reserve requirements
changed under revised Regulation D?
A. Yes. Formerly any eligible bank
ers’ acceptance having not more than
six m onths’ sight to run would not
be exempt from reserve requirements
until the remaining maturity was 90
days or less at the time of discount.
Under revised Regulation D, all eligi
ble bankers’ acceptances described in
paragraph 7 of section 13 of the
Federal Reserve Act (12 U.S.C.
§ 372) having not more than six
m onths’ sight to run are exempt
from reserve requirements.
FEDERAL FUNDS
A. If the originating depository insti
tution is obligated to incur more
than the first ten per cent of loss as
sociated with a pool of conventional
non-Federally insured mortgages,
then any funds raised through is
suance and sale of such securities to
nonexempt entities are subject to re
serve requirements. This, however,
does not apply to normal mortgage
loan participation transactions where
the buyer and seller of a participa
tion in a mortgage loan or pool of
mortgages share all risk of loss bn a
pro rata basis. In such instances any
funds raised through the sale of such
participations are not subject to re
serve requirements.
BANKERS’ ACCEPTANCES
Q1. Does the sale o f an eligible ac
ceptance under a repurchase agree
ment create a reservable liability?
A. Yes. Only as government and
agency securities may be sold under
repurchase agreement to entities
other than depository institutions free
of reserves.
0 2 . Has the determination o fth e m a
Q1. A depository institution purchases
Federal funds through a broker (not
a depository institution) that is acting
as agent for a depository institution.
A re the Federal funds reserve-free?
A. Yes. Federal Funds purchased from
a depository institution are not con
sidered to be a deposit under Section
204.2(aXlXviiXAXl). If the broker acts
solely as agent, the funds in the
example are considered to have been
purchased from the depository
institution.
Q 2 .A re borrowings from corporate
central credit unions exempt from re
serve requirements?
A. Yes. All credit unions, including
corporate centrals, are “exempt” en
tities regardless of whether or not
they are required to hold reserves
with the Federal Reserve. Thus, bor
rowings by depository institutions
from corporate central unions are
not subject to reserve requirements.
Q 3. Repurchase agreements on securi
ties guaranteed as to principal and
interest by the U.S. Government or
35
an agency thereof ("RP") are exempt
from resetre requirements as are d i
rect borrowings from the U.S. G ov
ernment or an agency thereof. A re
Ginnie M ae (Government National
Mortgage Association). Fannie Mae
(Federal National Mortgage Associa
tion), Freddie M ac (Federal Home
Loan Mortgage Corporation), and
Sallie M ae (Student Loan M arketing
Association) agencies o f t h e U.S.
Government?
A. Yes. A list of obligations which
the Federal Reserve considers to be
U.S. Government and agency securi
ties for purposes of the RP exception
may be found at the Board’s Pub
lished Interpretations 925 (12 CFR
§ 201.108). Ginnie Mae, Fannie Mae,
and Freddie Mac are on that list.
Sallie Mae is also a Government
agency for this purpose.
In addition, direct borrowings in the
form of promissory notes or other
similar instruments in the name of
the U.S. Government or an agency
thereof are excluded from the defini
tion o f deposits and, thus, are ex
empt from reserves. Such exemption
applies to borrowings that are in the
name o f departm ents of the U.S.
Government such as the Bureau of
Indian Affairs. However, liabilities
that are booked as deposits by the
institution are regarded as deposits
because they are not “borrowings.”
Q 4. The permissible collateral for out
standing due bills consists o f securi
ties o f similar type and comparable
m aturity to the security underlying
the due bill. What is considered to
be comparable m aturity for this
purpose?
A. All Treasury bills may be treated
as being of comparable maturity to
each other because they are issued in
original maturities of one year or
less. Obligations that have maturities
within a range of time that is nor
mally referred to as a common group
36
may be substituted for each other. In
this regard, obligations that are re
ferred to as “long term ,” for exam
ple, may be substituted for each
other even though they might have
maturities that vary by as much as
10 years. This may be determined by
common usage in the market place.
Shorter term securities would have a
narrower time range for the purpose
of determining comparability of m a
turity. In determining the maturity
comparibility of two securities, m atu
rity may be determined on the basis
of the time remaining to maturity of
a particular obligation.
and ratios of .0325 and .0340, re
spectively, merge. The required re
serve ratio on time deposits for the
merged bank would be (0.0325 x
(15/50)) + (0.0340 x (35/50)) =
0.03355.
Q3. What is the definition o f total
deposits to be used to determine
whether quarterly reporters have
reached 15 million?
A. Gross deposits, the sum of items
7, 12, and 15 on the FR 2900, will
be used to determine the continuing
eligibility of quarterly reporters as set
forth in section 204.3(d)(3).
CALC ULATIO N S A N D
R E P O R T IN G
Q l . A re depository institutions that
have zero reserve requirements re
quired to report deposit and other
data to the Federal Reserve?
A. Yes. All depository institutions,
including “bankers’ banks,” are re
quired to submit data on Form
FR 2900 in accordance with Regula
tion D.
Q2 . How are tim e deposit ratios for
old reserve requirements to be calcu
lated for m em ber banks (and former
m em ber banks) that are involved in
mergers subsequent to August 6,
1980?
A. The time deposit ratios for a
combination of member banks (or
former member banks) will be calcu
lated as a weighted average of the
individual ratios. The weights are to
be based on the daily average
amount of time deposits for each of
the institutions involved over the re
serve computation period immediately
preceding the merger.
For example, suppose that two mem
ber banks that had total time depos
its of $15 million and $35 million
Q 4. Does Item 2, “U.S. Government
D em and Deposits. " apply only to
those institutions that have been des
ignated as Treasury tax and loan d e
positories?
A. No. Regardless of whether or not
an institution has been designated as
a depository, any institution that has
deposit accounts subject to with
drawal on demand that are due to,
or subject to control or regulation by
the U.S. Government must report
such balances in Item 2. For exam
ple, any institution that withholds
Federal income taxes, social security
taxes, or other Federal tax payments
from the salaries of its employees
must report the unremitted balance
of such deposits in Item 2. However,
TT&L note balances are not to be
reported as deposits in this item or
elsewhere on the report.
0 5 . How should transaction accounts
that meet the criteria for more than
one type o f account be reported on
the FR 2900?
A. All demand deposit accounts
should be classified as demand d e
posits (Items 1, 2, or 3) even if pre
authorized or telephone transfers or
third party payments through the use
of debit cards, ATMs, or RSUs are
allowed. Similarly, all NOW accounts
or share draft accounts should be
classified as NOW /share draft ac
counts (Item 6), even if preauthorized
or telephone transfers or third-party
payments through the use of debit
cards, ATMs, or RSUs are allowed.
Savings or time deposit accounts that
meet the criteria for ATS accounts
should be classified as ATS accounts
(Item 4), even if telephone or preau
thorized transfers or third-party pay
ments through the use of debit
cards, ATMs, or RSUs are allowed.
Savings or time deposit accounts
other than NOW, share draft, and
ATS accounts that permit more than
three telephone or preauthorized
transfers per month or that permit
third-party payments through the use
of debit cards, ATMs, or RSUs
should be reported as telephone or pre
authorized transfer accounts (Item 5).
Q 6.A re time deposits with a current
balance o f $100,000 or more reported
on line 16 o f FR 2900, or does it in
clude only time deposits with an ini
tial deposit o f at least $100,000?
A. All time deposits with balances of
$100,000 or more at the time of re
porting must be reported on line 16
of FR 2900.
Q7 . I f a corporation presents a credit
union with a check drawn on
another depository institution f o r the
purpose o f depositing in the credit
union the corporation employee's
withheld savings fro m a payroll but
does not provide the credit union
with a listing showing the distribu
tion o f such withheld savings, how
should the credit union report this
transaction on the FR 2900?
A. The credit union should report
the liability for the deposited payroll
savings in Item 3 (Other Demand) of
the FR 2900 but this amount may
be offset by the deduction for cash
items in process of collection during
the time required for the check to
clear.
After the check clears, if the distri
bution listing is still not provided to
the credit union or if the credit
union does not distribute the lump
sum deposit among the appropriate
members, the credit union is not en
titled to the cash items in process of
collection deduction from those
funds. The payroll deposit remains in
Other Demand and reserves must be
held against the deposit until the
funds are distributed to the proper
members’ accounts.
Q8 . M any banks receive payments
from other banks with unclear infor
mation as to whom the fu n d s should
be credited. The practice o f many in
stitutions is to credit those fu n d s to
a suspense account. The fu n d s re
main in that account until the insti
tution determines the party to whom
the fu n ds are to be credited or
transmitted. This process f o r each
such paym ent may take several days
or weeks. During that time, how
must an institution report that sus
pense account f o r reserve purposes?
M any foreign banks f in d that 90 per
cent o f paym ents m ade to them are
to be credited to their parent's ac
count, and thus most o f these funds
should have been subject to Eurocur
rency, rather than domestic, reserves
during that period.
A. Institutions must regard the en
tire amount of funds in suspense ac
counts each day as transaction ac
counts (to be reported as other
demand deposits in Item 3 o f the
FR 2900) unless they determine from
their past experience that a percent
age of such funds usually are to be
treated otherwise. For example, if a
United States branch of a foreign
bank finds that 90 per cent of the
funds placed in a suspense account
normally go to its parent, it may
treat 90 per cent of its suspense ac
count each day as a balance due to
its parent subject to the Eurocur
rency reserve requirement and 10 per
cent as a transaction account.
Q 9. The instructions to FR 2900 indi
cate that a bona fid e cash manage
ment arrangement m ust be evidenced
by a prior written agreement between
the reporting depository institution
and the customer authorizing trans
fers between transaction accounts o f
the customer. Does this mean that
there must actually be a reduction
on the books o f t h e institution in
order to reduce the balance by the
overdraft amount for purposes o f re
serves?
A. An actual transfer on the books
of the institution is not necessarily
required. Bona fide cash m an
agement purposes can be demon
strated in a number of situations.
The fact that a depository institution
has the ability to offset an overdraft
with funds in another account is suf
ficient to serve the purposes of
Regulation D.
Q 10 . How are ‘'loans in process ” to be
treated for purposes o f reporting on
the FR 2900?
A. “Loans in process” arise in at
least two different contexts.
(1) Where a depository institution is
sues a cashier’s check representing
mortgage or other loan proceeds and
delivers the check to a settlement
agent in advance of the loan closing,
the cashier’s check represents a de
mand deposit and the amount of the
check is reservable from time of issu
ance as a transaction account.
(2) Thrift institutions commonly have
a liability "contra” account entitled
“loans in process” that represents
unadvanced portions of construction
loan commitments. Such commit
ments are contingent liabilities of the
37
depository institution and are not
subject to reserves. When a portion
of the loan commitment is advanced,
a reservable liability would be cre
ated if disbursement were made by
issuance of an officer’s check or by
credit to a deposit account.
Wednesday, and for the first
Thursday o f t he next computation
p erio d ."
Does this reporting principle apply to
other similarly situated depository in
stitutions?
A . Yes. If a depository institution
Q l l . / I depository institution ( “seller’’)
sells money orders on consignment
from a second depository institution
( “issuer"). Funds are not rem itted to
the issuer until it notifies the seller
that the money orders have been re
ceived for paym ent and the funds
are then rem itted by the seller. How
are the funds representing the p ro
ceeds o f the money order sale to be
reported?
posts its general ledger daily or gen
erates a daily balance sheet, then all
amounts reported for reserve require
ments purposes on the FR 2900
must be updated daily. However, as
indicated above, if it is the accepted
accounting practice and standard for
a particular segment of the industry
to post the general ledger less fre
quently than daily, then weekly up
dating is permitted.
Q 12. The instructions to Form FR
2900 for credit unions provides under
“R ecord-keeping'
“Note: If. according to your stan
dard accounting practices, closing
balances for accounts reported on
this report are n o t available on a
daily basis, you may report the
same closing balance for subse
quent days p r o v id e d that your
closing balances for these accounts
are updated at least once a week.
For example, a credit union that
uses a weekly batch system may
have closing balances only as o f
each Friday. In this case, the bal
ances for the preceding Friday
should be reported for Thursday
o f t h e current computation week;
the balances for Friday o f t h e cur
rent computation week should be
reported not only for Friday but
also for the following Saturday.
Sunday, Monday, Tuesday, and
38
A . No. Vault cash consists of United
States currency and coin (except for
coin and currency whose numismatic
value exceeds face value, such as
gold and silver coin) owned and held
by the depository institution.
However, redeemed savings bonds
give rise to a “cash item in process
of collection” deduction while in the
collection process if shipped for col
lection on the next business day.
ELIGIBLE R E SE R V E A SSE T S
Q 4. Coin and currency must be in the
possession o f t h e reporting institu
tion, subject to the in-transit excep
tion, in order to be treated as vault
cash. Is currency and coin considered
to be in an institution’s possession if
placed in a vault on the premises o f
another institution that is rented by
the reporting institution?
V ault Cash
A . Yes, so long as (1) the reporting
A . The money order proceeds are a
deposit of the selling institution until
remitted to the issuer. If the issuer is
a depository institution, then the un
remitted amount held by the seller
represents a balance due to a deposi
tory institution.
counted as vault cash?
Q l . M ay coin sent by an institution
to a coin-wrapping servicer and kept
there fo r several days be treated as
vault cash?
A . Yes, so long as the institution
continues to book the coin as an as
set and has the right to obtain pos
session of the coin immediately to
satisfy depositors’ claims.
Q 2. M ay a depository institution sell
its excess vault cash to another insti
tution for use in satisfying reserve re
quirements by means o f an overnight
trust receipt? The selling institution
will continue to hold the currency
and coin in its vault.
A . No. Such transactions are re
garded as a device to avoid reserve
requirements and such temporary
“sales” are not regarded as effective
for reserve maintenance purposes.
Q3 .A re redeem ed savings bonds
institution has full rights of owner
ship of the coin and currency, (2) the
reporting institution has full rights to
obtain the coin and currency imme
diately in order to satisfy customer
demands (and accordingly must be
reasonably nearby), and (3) the insti
tution from which the vault is rented
does not include that coin and cur
rency as its own vault cash.
Pass-throughs
Q l. I f a correspondent is assessed a
penalty for a deficiency in reserves
maintained that arose because a re
spondent depository institution was
deficient, may the correspondent pass
the penalty on to the respondent?
A . Yes. The Reserve Bank will im
pose the penalty on the correspon
dent and the correspondent is not
prohibited by Federal Reserve rules
from passing it on to the respondent,
but is not required to.
Q2. Regulation D states that an insti
tution may have only one pass
through correspondent. Does this
rule apply to a foreign bank with of
fices in more than one State?
A. No. If a foreign bank has United
States offices that are required to
keep reserves at more than one
Reserve Bank, each reporting unit is
treated separately and may have a
different pass-through correspondent.
Q3. May a former member bank that
is required to maintain full reserves
pass the reserves through a corres
pondent?
A. Yes. Such a bank may maintain
its reserve account directly with the
Reserve Bank or it may pass its re
serves through a correspondent.
BALANCES DUE T O /D U E FROM
DEPOSITORY INSTITUTIONS
“ Due From ” Deductions
Q l .A re demand balances held by a
depository institution with the Fed
eral Home Loan Banks or with the
NCUA Central Liquidity Facility to
be reported in Item 8. “dem and bal
ances due from depository institu
tion, ” on the FR 2900?
A. No. Such balances are not eligible
for the ‘‘due from ” deduction since
neither the Federal Home Loan
Banks nor the NCUA Central Liqui
dity Facility will hold required re
serves on such balances.
0 2 .A r e ' 'checking-type'' accounts
that a credit union maintains at a
corporate central to he included as a
deduction under Item 8. "demand
balances due from depository institu
tions, " on the FR 2900?
A. Only those accounts in the form
of demand deposits (i.e., payable on
demand) that are due from a corporate
central are to be included as a de
duction under Item 8. If the corporate
central reserves the right to require
written notice before an intended with
drawal, regardless of whether or not
the corporate central actually exercises
this right and regardless of how the
credit union uses the account, such ac
counts do not meet the definition of
demand deposits and, therefore, may
not be included in Item 8.
tution will have written down a lia
bility account for the check that it
has issued, and, because that liability
account is likely to be a reservable
deposit account, it has already ob
tained a reduction in reserves on the
transaction. To permit a deduction
for that amount would permit an un
warranted double deduction for the
amount of the check.
CLASSIFICATION AND
RESERVABILITY QUESTIONS
Q3. Is a balance due from another
depository institution subject to im
mediate availability which the State
banking authorities count in satisfac
tion o f an institution 's State reserve
requirements deductible as a balance
due from other banks?
A. Yes. All balances at other deposi
tory institutions subject to immediate
availability are deductible from gross
transaction accounts in arriving at
required reserves.
0 4 . The actual balance in a reporting
institution’s demand account at an
other institution usually will be
greater than the amount shown on
the reporting institution’s books in
its due-from entry. This occurs be
cause the reporting institution will
write down the due-from account on
its books for checks and drafts that
have not yet been paid by the insti
tution holding the account. In re
porting the total amount o f balances
due from depository institutions,
must an institution report its book
amount, or may it report the amount
shown each day at the other institu
tion as balances due to the reporting
institution?
A. The reporting institution must use
its book amount as balances due
from depository institutions for pur
poses of Item 8. The reporting insti
Q5. What is the proper treatment o f
excess reserves o f a depository insti
tution that maintains reserves on a
pass-through basis?
A. As noted in the detailed reporting
instructions, all reserve balances
passed through to the Federal Re
serve by a correspondent on behalf
of a respondent must be excluded
from Item 8, “ Demand Balances
Due from Depository Institutions,” of
the respondent’s FR 2900, even if a
portion of the amount passed
through on behalf o f the respondent
was in excess of the respondent’s re
quired reserves. On the other hand,
a respondent may include as a “due
from” any demand balances that it
has at a correspondent that were not
passed through by a correspondent
to the Federal Reserve.
Q6. A n overdraft in an Edge Corpo
ration's demand deposit account at
its parent bank is raised to zero for
computing reserves and the amount
is considered a loan from the parent
to the Edge. Is the amount o f t h e
loan exempt from reserves?
A. The loan is not reservable to the
parent bank. The Edge Corporation
is permitted to treat the loan as a bor
rowing from another depository insti
tution (at page 21 of the instructions),
and therefore it is not reservable.
39
Q7-/4 re excess reserves maintained
with a pass-through correspondent in
a deposit subject to immediate with
drawal a reservable liability o f the
correspondent?
A. If the entire amount on deposit
with the correspondent is passed
through to a Federal Reserve office,
then none of it is to be treated as a
balance due to banks. Any amount
not actually passed through to a
Federal Reserve office must be
treated as a balance due to banks,
and accordingly is reservable.
Q8.i4 re balances due to bankers'
banks such as Savings Banks Trust
Company and balances due to pri
vate banks to be reported in Item
La. o f t h e FR 2900?
A. Yes. Savings Banks Trust Com
pany should be treated as a bank.
Balances due to private banks that
are not depository institutions are to
be reported as bank demand ac
counts in Item l.a. Balances due
from Savings Banks Trust Company,
but not from private banks, are to
be included in Item 8.
Q9. What is the proper classification
o f fu n d s received by a depository in
stitution representing payments for
loans that the institution is servicing
for others?
A. Funds received by a depository
institution in connection with servic
ing of loans for others represent de
posits. Where the loan is owned by
another depository institution, such
funds represent a balance due to an
other depository institution until re
mitted. Loan repayments received by
an institution for loans that it owns
represent reductions in an asset ac
count and do not give rise to re
serves notwithstanding that such pay
ments are carried temporarily in a
liability account pending proper post
ing to the loan accounts.
40
Q10. What is the proper treatment o f
a check drawn by a depository insti
tution on a zero balance account at
a correspondent?
A. If a credit union, savings and
loan association or other depository
institution draws checks on a zero
balance account at a correspondent
bank and remits funds when advised
that the checks have been presented,
then the amount of the checks repre
sent an amount due to another de
pository institution. Although Regula
tion D (12 CFR 204.2(bX2)) provides
that a check or draft drawn by a de
pository institution on another depos
itory institution are not demand de
posits, such rule applies only where
the check or draft is drawn against a
positive balance at another institution
and would properly represent a re
duction in an asset account. In the
case of checks drawn on a zero bal
ance account, a depository institution
is regarded as having issued a reserv
able liability.
EUROCURRENCY LIABILITIES
0 1 . How are balances due to foreign
offices o f other depository institutions
treated?
A. Borrowings from such offices are
treated as nonpersonal time deposits
and are reported on the Eurocur
rency report form. Balances due to,
and borrowings from, an institution’s
own foreign branches, whether or not
subject to immediate withdrawal, are
reported as Eurocurrency liabilities
and are reservable net of balances
due from those offices. Demand bal
ances and borrowings due to foreign
offices of affiliated banks are treated
as balances and borrowings due to
other banks.
Q2. I f a foreign bank parent places
funds with its United States branch
in a capital account, is that account
exempt from Eurocurrency reserves?
A. No. That must be treated as a
balance due to parent. The capital
equivalency deduction takes the place
of capital for reserve requirement
purposes.
Q3. There are two de minimis ex
ceptions to the Eurocurrency reserve
requirement on loans to United
States residents, i.e., the $1 million
per branch exception and the
S I00.000 per borrower exception.
How do these exceptions interrelate?
A. Example One: If Mr. Jones, a
U.S. resident, has a $50,000 loan at
a b an k ’s Nassau branch and a
$90,000 loan at the ban k ’s London
branch and both branches have more
than $1 million in loans outstanding
to U.S. residents, then the resident
exception does not apply since aggre
gate loans to Mr. Jones exceeds
$ 100,000.
Example Two: In Example One, if
the London branch had less than $1
million in loans to U.S. residents
and the Nassau branch had more
than $1 million, only the Nassau
branch loans would be subject to re
serve requirements. Reservable loans
to Mr. Jones would be $50,000 since
aggregate credit extended to him by
the ban k ’s foreign branches exceeds
$100,000. The London branch loan
to Mr. Jones is not reservable, how
ever, because total loans to U.S. resi
dents at that branch do not exceed
$1 million.
Exam ple Three: If a b an k ’s Nassau
branch has twelve loans of $90,000
each to twelve different U.S. resi
dents and no other foreign branch
has any loans to any of the twelve
U.S. residents, then the Nassau
branch would have no reportable
loans. The branch’s total loans are
more than $1 million, but its loan to
any one U.S. resident is less than
$ 100,000.
Example Four: In Example Three, if
one of those U.S. residents had an
additional loan at the London
branch of $20,000, the Nassau
branch must report $90,000 in loans.
This is true regardless of whether
London has more or less than $1
million in loans. If London has more
than $1 million, it must report the
$20,000 loan to the resident because
in the aggregate the b an k ’s loan to
that resident totals more than
$100,000.
Q4 .A re direct borrowings from for
eign corporations regarded as Euro
currency liabilities?
A. Direct borrowings from foreign
and domestic corporations that are
not depository institutions are liabili
ties subject to reserve requirements
but are not Eurocurrency liabilities.
They are nonpersonal time deposits
if their maturity is 14 days or more.
They are demand deposits and re
ported as transaction accounts if
their maturity is less than 14 days.
The exemption for Federal funds and
Eurocurrency borrowings cover bor
rowings from banks and depository
institutions.
Q5 . I f a foreign bank issues commer
cial paper in the United States and
the bank's United States branch or
agency borrows the proceeds from
the bank's head office, are those
funds subject to reserves at the
domestic ratios?
A. No. Commercial paper issued in
the United States by a foreign
b an k ’s head office is not subject to
Federal reserve requirements. How
ever, when the proceeds of the sale
are channeled to the United States
branch or agency, the proceeds be
come subject to Eurocurrency reserve
requirements as an advance from the
foreign bank's head office.
Q6. A re balances due from a Federal
Reserve Bank to be subtracted from
total assets in calculating a foreign
bank's United States office's capita!
equivalency deduction?
A. No.
Q7. The calculation by foreign banks
o f their capital equivalency deduction
requires that the definition o f total
assets correspond to the definition on
their quarterly call report (FFIEC
002). (However, the amount o f total
assets will, in many cases, need to be
adjusted to take into account the dif
ferent definitions o f “related” institu
tions on the two reports.) In order to
calculate total assets in Schedule A
o f that report, unearned income on
loans is to be subtracted. M any for
eign banks do not calculate unearned
income on loans each day; rather
they calculate it only monthly or
quarterly. M ust such foreign banks
calculate this figure daily?
domestic reserve requirements as de
mand or time deposits depending on
maturity; if the borrowing is a de
mand deposit (because the maturity
is less than 14 days), then Regulation
0 and Part 329 of the FDIC’s regu
lations prohibit the payment of inter
est on the borrowing.
Q9./4 depository institution has sep
arate dem and accounts for each o f
several foreign branches o f a single
unrelated foreign bank. May
amounts due to some o f t h e
branches be "netted" against
amounts due from other branches for
computing amounts due to banks?
A. No, unless the separate accounts
of the foreign institution serve a
bona fide cash management function
and if netting is permitted under the
law(s) of the country or countries in
which the branches are located.
A. No. Foreign banks may use the
most recently available figure on a
consistent basis.
Q8. Eurocurrency liabilities include
borrowings from “non-United States
offices" o f t h e reporting domestic in
stitution. Do "non-United States of
fices" include foreign o ffices o f a
nonbank corporation that is an affili
ate o f t h e reporting institution?
A. No. “Non-United States offices”
in this context means only foreign
offices of the foreign bank operating
the U.S. agency or branch. Affiliates
are separate corporate entities, and
their foreign offices are not foreign
offices of the foreign bank itself.
Borrowings from foreign offices of
affiliated depository institutions are
reported together with borrowings
from other foreign depository institu
tions in Column 1 of the FR 2950.
Borrowings from foreign offices of
affiliated nonbank corporations are
treated as deposits and are subject to
41
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Report of Transaction Accounts, Other Deposits and Vault Cash
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th e d e s ig na te d Federal Re se rv e Bank □
FR 2 9 0 0
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Approval Expire*
Septem ber 1982
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Tha Federal R eserve Sy st em r ega rd s t h e inform ation prov id e d b y e a c h r e s p o n d e n t a s
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th is fo rm m ust be release d, re s p o n d e n ts will be notified
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PLEASE READ IN S T R U C T IO N S PRIO R TO C O M P L E TIO N OF T H IS REPORT
Items
3
3
T R A N S A C T IO N ACCO UNTS
Demand Deposits
1
p
Due to dep osito ry in stitutio ns
a
h-(
Banks ............................................
ss
co
b Other depository in stitutio ns
2
U.S. G overnment
3-
O ther d e m a n d .................
r+
•-t
e
o
M*
O
3
<*>
Olher Transactio n Accounts
I
4
A T S a c c ou nt s
5
Telephone and preauthor ued transfers .
6
NOW Accounts/Share Drafts
..........
..................................
...
.
To tal (m ust equal sum o f Items I through 6 a b o v e ). .
D E D U C T IO N S FRO M T R A N S A C T IO N ACCO UNTS
8
Demand balances due fro m depository in stitu tio n s
in th e U S ...........................................................................
9.
Cash items in process o f c o lle c t i o n ...........................
O T H E R S AV IN G S A N D TIM E DEPOSITS
Other Savings Deposits
10.
B-. X
Personal ..........
11.
N o n p e rs o n a l...........................
12
Total (m ust equal sum o f Items 10 and 11)
.................
Please con tinu e on page 2
f R 2900
Paga 3
R e p o 'i an balances as o l th e c i o u o f busin ess each d a y to th e nearest th o u sa n d dollars
Item s
other
S A V IN G S
and
TIM E D E P O S IT S I c o n t i n u e d I
T.m e D e o o t 't t
13
14
P ersonal I r rg a r d ie s t of m a t u r i t y ) . ..............
N on p e rs o n ai
a
Original maturity o ' '•»»* than 3 1 2 yaara
b
Original maturity of 3 I 7 yaa>a or more
15
T otal lm u s t e q u a l s u m o f Item s 13 a n d 141
16
All tim e d e p o s its >n d e n o m i n a t i o n of $ 1 0 0 0 0 0 or
m o r e (in c lu d e d m Ite m s 13 a n d 141
17
V A U L T CASH
.............
..........................................
If y o u r in s t it u t i o n h a d n o ineligible a c c e p ta n c e s o r o b lig a tio n s b y a f filia tes , please ch e ck th is b o x a n d d o n o t c o m p l e t e S c h e d u le A. □
_________________________________________________________________________ 1 c e rtify t h a t t h e i n f o r m a ti o n s h o w n o n th is re p o rt is co r re c t
N « m e a n d A d d r c t i o* R e p o r t i n g m t i > i u | i o n
A u t h o n ta d Signature
Please re t u rn by n o later th a n
A re # C o d a a n d T » la * jn o n « N u m b * '
To
title
F R 2950
O M B N o . 7 1 0 0 -0 0 8 7
A pproval E x p ire *—S ep tem b er 1 9 8 2
Report of Certain Eurocurrency Transactions
For All Depository Institutions Other Than U.S. Branches and Agencies of Foreign Banks
F o r the week ended_____________________________________ _ 19______
If v o u r in s t i t u t i o n had n o o u ts ta n d in g balances t o r e p o r t , please c h e ck
t h is
b o x , sign
th e
re p o r t, a nd
re tu r n
to
th e
T h is re p o rt is r e q u ire d b y la w [1 2 U .S .C . § 2 4 8 ( a ) a n d § 4 6 1 1 .
Fede ral R eserve Ban k
d esign ate d b e lo w □
T h e Fede ra l Reserve S y ste m regards t h e i n fo r m a tio n p ro v id e d b y each
respondent as co nfid en tia l. I f i t should be determ ined subsequently tha t
any in fo rm a tio n collected on th is fo rm must be released, respondents w ill
be n o tifie d .
P L E A S E R E A D I N S T R U C T IO N S P R IO R T O C O M P L E T IO N O F T H I S R E P O R T
C o lu m n 1
B o rro w in g s f r o m
N o n -U .S O ffic e s o f
O th e r D e p o s ito ry
□a y of
Week
Date
in s t itu tio n s and
f r o m C e rta in
D e s ign ate d N o n -U .S .
E n titie s
M o n th
Day
M ils.
T hous.
C o lu m n 2
C o lu m n 3
Gross L ia b ilitie s
G r o u C laim s
to O w n
On O w n N on-
N o n -U .S . Branches
U.S. Branches
pfus N et
plus N et
O w n I B F 1-/
O w n I B F 1^
M ils .
T ho us.
M ils.
Assets H e ld by
O w n IB F a nd
O w n N o n -U .S .
Clajma on
L ia b ilitie s t o
C o lu m n 4
T ho us.
Branches A c q u ir e d
fro m
M ils .
U.S. O ffic e s
T h o u s.
C o lu m n 5
C re d it E x te n d e d b y
O w n N o n -U .S .
Bran ch es to
U.S. R e side nts
M ilt .
T hou s.
T h u rs d a y
F rid a y
S atu rd ay
Ssj nday
M onday
1 uesdav
W ednesday
TOT AL
T^apor t o n l y a u n g ie n e t p o s itio n in e ith e r C o l u m n 2 or 3 t h a t represents v o u r n e t due fro m /d u e to p o sitio n w ith yo u r o w n IB F . R efer to th a D etailed
in s t ru c t i o n s for th e Prepara tion of the R e p o r t o f C e rta in E u ro cu rren cy T ransactions to dete rm in e th is am o u n t. U n d er n o circum stance should an am o u n t
be re p o rt e d m bo th C o l u m n s 2 and 3 t h a t represents yo u r n a t po sitio n w ith y o u r own IB F.
______________________________________________________________ I certify t h a t the in fo rm atio n show n o n this rep o rt is correct.
N am e
a n d A ddres s o t In s titu ti o n
A u th o rized Signature
Parson to be contacted concerning this rep o rt
Area Coda and T ele ph o n e N u m b e r
Please re tu rn b y no later than
To
Tltfe
F R 29 51
OMB No. 7 1 0 0 -0 0 8 7
A p p ro val E x p ire s -S e p tem bar 1 9 8 2
Report of Certain Eurocurrency Transactions
From U S. Branches and Agencies of Foreign Banks
For the week ended_________________________________ _ 19_____ .
I f y o u r in s t itu tio n h a d n o o u ts ta n d in g balances to r e p o r t, please c h e c k
th is
b o x , sign
th e
r e p o r t, a nd r e tu r n
to
th e
Federal
T h is re p o rt is r e q u ire d b y la w [ 1 2 U .S .C . § 2 4 8 1 a ), § 4 6 1 , a n d § 3 1 0 5 ] .
R eserve B ank
d esign ate d b e lo w . □
T h e Fe dera l R eserve S ys te m reg ards th e i n fo r m a t io n p r o v id e d b y each
re s p o n d e n t as c o n fid e n tia l. I f i t s h o u ld be d e te r m in e d s u b s e q u e n tly th a t
a n y i n f o r m a t io n c o lle c te d o n t h is f o r m m u s t b e released, re s p o n d e n ts w i l l
be n o t ifie d .
P LEAS E R E A D IN S T R U C T IO N S PR IO R TO C O M P L E T IO N O F T H IS R E P O R T
C o lu m n 1
B o rro w in g s fr o m
Day of
W eak
D aie
N o n -U .S . O ffic e s o f
t o N o n -U .S .
O th e r D e p o s ito ry
Parent Bank
I n s t itu t io n s a n d
and Its N on -U .S .
f r o m C e rta in
O ffic e s p lu s N e t
D e s ig nated N o n -U .S .
L ia b ilitie s to
E n titie s
M o n th
□a y
C o lu m n 2
Gross L ia b ilitie s
M i is.
T h ous .
C o lu m n 4
C o lu m n 3
T o ta l Assets M in u s
G ross C laim s
on N on-U -S.
Pa rent B ank
a n d Its N on-U .S .
O ffic e s P5us N et
C e rta in Assets a n d
P o s itiv e N e t Balances
D ue f r o m O w n IB F
C laim s on O w n I B F ^
M ils .
T hous.
M ils .
T ho us .
IB F a n d C e rta in
R e la te d N o n -U .S .
I n s tit u tio n s th a t
a n d th e Parent
B a n k 's U.S. a n d
N o n - U.S. O ffic e s
Own I B F ^
C o lu m n 5
Assets Meld b y O w n
M ils.
v w e A c q u ir e d
f r o m U .S . O ffic e s
T ho us .
M ils.
Thoua.
T h u rs d a y
F rid a y
S atu rd ay
S unday
M onday
T uesday
W ednesday
TOTAL
- ^ R e p o r t o n ly a s in g le n e t p o s itio n in e it h e r C o lu m n 2 o r 3 t h a t rep re s e n t* y o u r n e t d u e f r o m / d u e t o p o s itio n w i t h v o u r o w n IB F , R e fe r t o th a D e ta ile d
I n s tr u c tio n * f o r th e P re p a ra tio n o f th e R a p o r t o f C e rta in E u r p c u r r e n c y T ra n s a c tio n s t o d e te r m in e th is a m o u n t. U n d e r n o c irc u m s ta n c e s h o u ld an a m o u n t
be re p o rte d in b o th C o lu m n s 2 and 3 t h a t re pres en ts y o u r n e t p o s it io n w i t h y o u r o w n IB F .
________________________________________________________I c e rtify that the inform ation shown on this report is correct
N a m e and A dd re s s o f I n s t itu t io n
A u t h o r iz e d S ig n a tu r e
Person to b e c o n ta c te d con<
Ares Co de and T e le p h o n e N u m b e r
Please return by no later than
Title
Summary Instructions for the Preparation of the Report of
Transaction Accounts, Other Deposits and Vault Cash (FR 2900)
Under the Monetary Control Act of
1980, a depository institution that has
transaction accounts or nonpersonal
time deposits is required to file with
the Federal Reserve System a Report
o f Transaction Accounts, Other
Deposits and Vault Cash (FR 2900).
These summary instructions provide a
general description o f the items to be
reported and focus on those tran s
actions that are more common to
smaller depository institutions. More
detailed instructions, including a com
prehensive discussion o f the items to
be reported, a discussion of certain
special topics, and a glossary that
defines important terms, are provided
in the Detailed Instructions for the
Preparation o f t h e Report o f Trans
action Accounts. Other Deposits and
Vault Cash that is available from the
Federal Reserve B anks.1
This report is used for the calculation
of Federal required reserves and for
construction of the monetary ag
gregates used by the Federal Re
serve System in the formulation and
conduct of monetary policy. Efficient
management of required reserves
begins with the accurate and timely
preparation of this report. Rules
governing the reserve requirement
provisions of the Monetary Control
Act are contained in the Federal
Reserve’s Regulation D, “ Reserve
Requirements of Depository In
stitutions,” which is available from the
Federal Reserve Banks.
GENERAL INSTRUCTIONS
Who must report. The following
depository institutions that have trans
action accounts or nonpersonal time
deposits must submit the Report o f
Transaction Accounts, Other Deposits
and Vault Cash:
1. Federally-insured commercial or
industrial banks (or any bank that
is eligible to apply for FDIC in
surance);
2. mutual or stock savings banks;
3. building, savings and loan, or
homestead associations and
cooperative banks that are mem
bers of a Federal Home Loan
Bank or that are insured by the
FSLIC (or any institution that is
eligible to apply for FSLIC in
surance);
4. credit unions that are insured by
the NCUA Board (or any credit
union that is eligible to apply for
such insurance);
5. Edge Act and Agreement cor
porations;
6. U.S. branches and agencies of
foreign banks with consolidated
worldwide bank assets in excess of
$1 billion; and
7. other U.S. branches of foreign
banks that are eligible to apply
for FDIC insurance.
Frequency of report. Commercial or
industrial banks, mutual or stock
savings banks, savings and loan
associations, and credit unions with
total deposits of less than $15 million
as of December 31, 1979, may file one
weekly report each calendar quarter as
specified by the Federal Reserve Bank.
All such institutions with total
deposits of $15 million or more, as
well as all U.S. branches and agencies
of foreign banks, and all Edge Act
and Agreement corporations, must file
a report each week.2
How to report. The reporting (or com
putation) period is the seven-day
period that begins on Thursday and
ends the following Wednesday. The
report shall reflect amounts out
standing as of the close of business
each day of the reporting period. For
any day on which the reporting in
stitution was closed, the institution
should report the closing balances as
of the preceding day. Amounts re
ported should be rounded and reported
to the nearest thousand U.S. dollars.
Banks, savings and loan associations,
and credit unions shall prepare and
file a report that consolidates the
head office and all branches (and
operations subsidiaries or service cor
porations, if applicable) located in the
50 states of the United States or the
District o f Columbia. U.S. branches
and agencies of foreign banks and
Edge Act and Agreement corporations
shall prepare and file a report that
combines all offices located within the
same state and within the same
Federal Reserve District.
Negative or overdrawn balances in ac
count should be regarded as zero
when computing deposit totals.
Similarly, balances “due from ” or
“due to ” other depository institutions
must not be regarded as negative
when such accounts are overdrawn;
rather, these accounts should be
regarded as having a zero balance
when computing deposit totals.
With the exception of Item 16 “ All
Time Deposits in Denominations of
$100,000 or more” , which includes
large time deposits also reported in
Items 13 and 14, deposits should be
classified according to the instructions
in this booklet or in the related
Detailed Instructions booklet and
reported in only a single item on this
report. Such single-category reporting
is essential in order to avoid the im
position of unnecessary reserve re
^ Every depository institution th a t o b ta in s fu n d s from a n o n -U .S. so u rce o r th a t h as non-U .S. offices (excluding those located on U.S. m ilitary facilities o u ts id e th e U.S.) m u s t also
file with the F ederal Reserve a Report ol Certain Eurocurrency Transactions. Korins an d in stru c tio n s for this rep o rt m ay be o b ta in e d from th e F ed eral Reserve B anks.
^The Federal Reserve Board has deferred reporting and reserve requirements for those depository institutions other than Edge Act and Agreement corporations, U.S. branches
and agencies of foreign banks and member commercial banks, with total deposits of less than S2 million as of December 31, 1979 and less than SI 5 million as of December 31,
1980 and as of December 31, 1981. Reporting by such institutions organized de novo since December 31, 1979 with less than S15 million in total deposits as of December 31,
1980 and as of December 31, 1981 is also deferred. When total deposits of such institutions exceed $15 million after December 31, 1981, the institution must begin reporting on a
quarterly basis.
46
quirements and to provide accurate
monetary statistics.
D E F IN IT IO N S
U .S ./n o n -U .S . For purposes of this
report, the term “United States” (or
“ U.S.” ) is defined as the 50 states of
the United States and the District of
Columbia. The terms “non-U.S.” and
“foreign” are defined as Puerto Rico,
territories and possessions of the
United States, and all countries other
than the United States.
D ep osits. The term “deposits” has a
special meaning in Regulation D and
in this report. Deposits include not
only funds received by the depository
institution for which credit has been
or is obligated to be given to a deposit
account maintained by the institution,
but also certain other liabilities of the
institution. Such liabilities arise from
“primary obligations” that are issued
or undertaken by the depository in
stitution as a means of obtaining
funds, and consist of (1) promissory
notes (including commercial paper,
credit union certificates of in
debtedness, and mortgage-backed
bonds), acknowledgements of advance,
and other similar obligations that are
issued to “nonexempt entities” (as
defined below); (2) repurchase
agreements entered into with
“nonexempt entities” on any asset
other than an obligation of, or fully
guaranteed as to principal and interest
by, the U.S. Government or Federal
agencies; and (3) due bills, regardless
of to whom issued, that have not been
collateralized within three business
days from the date of issuance by a
similar security. Except for due bills
described above, primary obligations
undertaken with “exempt entities”
are not deposits under Regulation D.
Note, however, that those liabilities
which your institution books as
deposits (or shares) are always
deposits, regardless of the status of
the depositor.
Many of the transactions giving rise to
a deposit liability are described in the
instructions for specific items to be
reported. There are, however, many
deposit liabilities, such as those
arising from “primary obligations”
described above, that are not
discussed in detail in these summary
instructions. For a thorough
discussion of deposits and these types
of transactions, please refer to the
Detailed Instructions for the
Preparation o f t h e Report o f Trans
action Accounts, Other Deposits and
Vault Cash.
Exem pt en tities. The term “exempt
entities” that is used in these in
structions consists of U.S. offices of
the following institutions:
National Credit Union Ad
ministration Central Liquidity
Facility, Federal Financing Bank,
Student Loan Marketing
Association, and National Credit
Union Share Insurance Fund;
10. Export-Import Bank of the U.S.;
11. Government Development Bank of
Puerto Rico;
12. Minbanc Capital Corporation;
13. securities dealers, but only when
the borrowing (a) has a maturity
of one day, (b) is in immediatelyavailable funds, and (c) is in con
nection with the clearance of
securities;
1. U.S. commercial banks and trust
companies and their operations
subsidiaries;
14. the U.S. Treasury (Treasury Tax
and Loan Account note balances);
and
2. U.S. branches or agencies of a
bank organized under foreign
(non-U.S.) law;
15. New York State investment com
panies (chartered under Article
XII of the New York State
Banking Code) th at perform a
banking business and are m a
jority-owned by one or more nonU.S. banks.
3. Edge Act and Agreement cor
porations;
4. industrial banks;
5. mutual and stock savings banks;
6. building or savings and loan
associations and homestead
associations;
7. cooperative banks;
16. Investment companies and trusts in
which the entire beneficial interest
is held by depository institutions.
N onexem pt en tities. The term
“nonexempt entities” includes any in
stitution other than those listed above
under “exempt entities.”
8. credit unions;
Personal deposits. Personal savings
9. the U.S. Government and its
agencies and instrumentalities,
such as the Federal Reserve
Banks, Federal Home Loan Bank
Board, Federal Home Loan
Banks, Federal Intermediate
Credit Banks, Federal Land
Banks, Banks for Cooperatives,
the Federal Home Loan Mortgage
Corporation, Federal Deposit In
surance Corporation, Federal
National Mortgage Association,
and time deposits include non
transferable deposits in which the en
tire beneficial interest is held by a
natural person (an individual or a sole
proprietorship). For any such deposit
issued on or after October 1, 1980, the
document that evidences the ac
count—whether in certificate,
passbook, statement, contract, or
book-entry form— must contain a
statement indicating that the deposit
is nontransferable; however, a deposit
47
issued to and held by a natural person
prior to October 1, 1980, regardless of
its transferability, is also a personal
deposit. Any deposit in which the
entire beneficial interest is held by a
natural person in an Individual
Retirement Account or Keogh Plan
Account, in a nontransferable time
deposit account held by an employer
as part of an unfunded deferred com
pensation plan established pursuant to
subtitle D of the Revenue Act of 1978
(Pub. L No. 95-600, 92 Stat. 2763), in
an escrow account, or in an account
held by a trustee or other fiduciary is
also a personal time deposit.
N onpersonal deposits. Nonpersonal
savings and time deposits are defined
to include deposits in which any
beneficial interest is held by a
depositor other than a natural person,
or any deposit issued on or after Oc
tober 1, 1980, that does not
specifically state that it is non
transferable. A depositor other than a
natural person includes a partnership,
a governmental unit, and any cor
poration, even if owned solely by an
individual.
T reatm ent o f pass-through balances.
A depository institution may satisfy
reserve requirements by holding vault
cash or by holding its required reserve
balance at the Federal Reserve. A
depository institution that is not a
member of the Federal Reserve
System, a U.S. branch or agency of a
foreign bank, or an Edge Act or
Agreement corporation (“respondent” )
is authorized to hold its required
reserve balance at the Federal Reserve
in one of two ways. The respondent
may deposit its required reserve bal
ance directly with the Federal Reserve
Bank or Branch which serves the
territory in which it is located. Alter
natively, in accordance with
procedures adopted by the Board, the
respondent may elect to pass its
required reserve balance through a
“correspondent.” The correspondent
may be a Federal Home Loan Bank,
48
the NCUA Central Liquidity Facility,
a depository institution that holds a
required reserve balance directly at a
Federal Reserve Bank or Branch, or
an institution that has been
authorized by the Board to pass
through required reserve balances.
The correspondent must pass through
these required reserve balances to the
Federal Reserve Bank or Branch in
the territory in which the main office
of the nonmember respondent in
stitution is located.
The correspondent institution shall ex
clude from this report all balances
received from nonmember respondent
institutions and subsequently passed
through to the appropriate Federal
Reserve Bank or Branch. A respon
dent institution shall exclude from this
report all balances that the correspon
dent passes through to the Federal
Reserve Bank or Branch on behalf of
the respondent.
IT E M -B Y -IT E M IN ST R U C T IO N S
T ransaction A ccounts (Item s 1
through 7)
Transaction accounts include all
demand deposits and all other ac
counts from which the depositor or ac
count holder is permitted to make
withdrawals by (1) negotiable or trans
ferable instruments (such as checks,
drafts, negotiable orders of with
drawal, or share drafts); (2) the use of
a debit card; (3) telephone or
preauthorized transfers to third p ar
ties or to another account, when more
than three such transfers per month—
defined as a calendar month, or any
period approximating a month that is
at least four weeks long, such as a
statement cycle— are permitted; and
(4) transfers to third parties through
the use of an automated teller
machine (ATM) or remote service unit
(RSU). Transaction accounts are
reported in Items 1 through 7 as
defined below.
Demand deposits, to be reported in
Items 1 through 3, are defined as
deposits that are payable immediately
on demand or issued in original
maturities of less than 14 days, or that
are payable with less than 14 days
notice, or for which the depository in
stitution does not reserve the right to
require at least 14 days written notice
of an intended withdrawal. For pur
poses of this report, demand deposits
include, but are not limited to, (1)
checking accounts (excluding NOW or
share draft accounts); (2) certified, of
ficers’, bank, tellers’, and cashiers’
checks drawn on the reporting in
stitution; (3) unremitted funds from
the sale of travelers’ checks or money
orders; (4) taxes, insurance premiums
or other funds withheld from the
salaries o f employees o f the reporting
institution; (5) matured time deposits
or credit union share certificates
(unless the deposit agreement
specifically provides for automatic
renewal at maturity or for transfer of
the funds to a savings or share ac
count); (6) credit balances that meet
the definition of demand deposits; (7)
funds received or held in connection
with letters of credit sold to cus
tomers; and (8) funds received or
held in escrow or trust accounts that
may be withdrawn on demand or
within 14 days from the date of
deposit.
Demand deposits also include those
liabilities referred to as “primary
obligations” that are described earlier
under Definitions, and that are issued
in original maturities of less than 14
days or payable with less than 14 days
notice.
Item l.a : D em an d D ep osits D u e to
B anks. Report in this item the balance
of all demand deposits (excluding
“primary obligations” other than due
bills that are not collateralized within
three business days as described
earlier) that are due to U.S. offices of
the following institutions located in
the United States: (1) commercial
banks (including private banks) or
industrial banks and trust companies
conducting a commercial banking
business; (2) U.S. branches and agen
cies of foreign banks; (3) Edge Act
and Agreement corporations; and (4)
New York State investment companies
(chartered under Article XII of the
New York State Banking Code) that
perform a banking business and that
are majority-owned by one or more
non-U.S. banks; and (5) banker’s
banks that are organized as commer
cial banks. All demand balances due
to these institutions may be reported
gross or net (on an institution-byinstitution basis) of balances due from
these institutions.
Also include in this item all demand
balances due to non-U.S. offices of
other U.S. banks, of other Edge Act
and Agreement corporations, and of
foreign banks. All demand balances
due to these institutions must be
reported gross.
Item l.b : D em a n d D ep osits D u e to
O ther D epository In stitu tions. Report
in this item the balance of all demand
deposits (excluding “primary obliga
tions” other than due bills that are
not collateralized within three business
days as described earlier) th at are due
to m utual or stock savings banks, in
cluding those that are bankers’ banks;
building or savings and loan associa
tions, homestead associations, or
cooperative banks, including those
that are bankers’ banks, and credit
unions (including corporate central
credit unions). All dem and balances
due to these institutions must be
reported gross.
Item 2: U .S . Govern m en t D em an d
D ep osits. Report in this item the
balance of all demand deposits (ex
cluding “primary obligations” other
than due bills that are not collateral
ized within three business days as
described earlier) that are subject to
control or regulation by the U.S.
Government, including U.S. Treasury
Tax and Loan Accounts (such as
Federal income tax payments, social
security tax deposits, other Federal tax
payments, and the proceeds trom the
sale o f U.S. Savings Bonds); U.S.
Treasury general accounts; U.S.
Treasury compensating balance ac
counts; Postmaster’s demand deposit
accounts; and demand deposits of the
Tennessee Valley Authority and
disbursing officers of the Department
of Defense and the Department of the
Treasury.
Exclude demand deposits due to U.S.
Government agencies and in
strumentalities and demand deposits
due to state or local governments or
their political subdivisions (reported in
Item 3). Exclude from this item and
from this report Treasury Tax and
Loan Account note balances.
Item 3: O ther D em an d D ep osits.
Report in this item the balance of all
demand deposits (excluding “primary
obligations” other than due bills that
are not collateralized within three
business days except as described in
the following paragraph) th at are held
for individuals, partnerships, and cor
porations; state and local governments
and their political subdivisions; U.S.
Government agencies and in
strumentalities; foreign governments
and international institutions; non
deposit or limited purpose trust com
panies; and trust departments o f the
reporting institution and of other in
stitutions. This item should also in
clude withheld state and local govern
m ent taxes, insurance premiums and
similar items; certified, officers’, bank,
tellers’, and cashiers’ checks; unremit
ted funds from the sale of travelers’
checks and money orders; and nonin
terest-bearing deposits subject to
negotiable orders of withdrawal
(NINOWS); and deposits subject to
payment order of withdrawal (POWs).
Also include in this item those
liabilities referred to as “primary
obligations” that are described earlier
under Definitions, and that are issued
in original maturities of less than 14
days or payable with less than 14 days
notice.
Item 4: ATS A ccoun ts. Report in this
item the balance of all savings
deposits of individuals that are
authorized for automatic transfer to
demand deposit or other accounts
pursuant to written agreement
arranged in advance between the
reporting institution and the
depositor. A savings account from
which more than three transfers could
be m ade in a month to a checking,
NOW, or share draft account to cover
overdrafts shall be regarded as a
transaction account and reported in
this item. A month is defined as a
calendar month, or any period ap
proximating a month that is at least
four weeks long, such as a statement
cycle.
Item 5: T eleph one or Preauthorized
Transfer A ccoun ts. Report in this item
the balance of savings deposits, share
accounts, or time deposits from which
the depositor is permitted or
authorized to make more than three
withdrawals per month for purposes of
transferring funds to another account
or for making a payment to a third
party by means of preauthorized or
telephone agreement, order, or in
struction. An account that permits or
authorizes more than three such with
drawals in a calendar month is in
cluded in this item whether or not
more than three such withdrawals ac
tually are made. A month is defined
as a calendar month, or any period
approximating a month that is at least
four weeks long, such as a statement
cycle.
Also report in this item the balance of
all savings deposits and time deposits
(including share and share certificate
accounts) from which payments may
be made to third parties by means of
a debit card, an automated teller
machine, remote service unit, or other
electronic device, regardless o f the
num ber o f payments made.
An account is not a transaction ac
count merely by virtue of an
arrangement that permits withdrawals
49
for the purpose of repaying loans and
associated expenses at the same report
ing institution (as originator or ser
vicer). In addition, an account is not a
transaction account merely because
withdrawals to be paid directly to the
depositor can be effected by telephone
or preauthorized order.
Exclude from this item those accounts
that permit no more than three
telephone or preauthorized transfers a
month, and all demand deposits, ATS
accounts, and NOW accounts, even if
telephone or preauthorized tran s
actions are permitted from such ac
counts.
Item 6: N O W A ccou n ts/S h are D rafts.
Report in this item the balance of all
interest-bearing negotiable order of
withdrawal (NOW) accounts and all
share draft accounts.
Item 7: Total Transaction A ccounts.
Report in this item the sum of Items
l.a, l.b , 2, 3, 4, 5, and 6.
D ed uctions (Items 8 and 9)
Item 8: D em and B alances D u e From
Depository Institutions in the U .S .
Report in this item the balance of all
deposits (excluding “primary obli
gations” other than due bills that are
not collateralized within three business
days as described earlier) subject to
immediate withdrawal that are due
from U.S. offices of the following in
stitutions located in the U.S.: (1)
commercial or industrial banks and
trust companies conducting a commer
cial banking business; (2) Edge Act
and Agreement corporations; (3) U.S.
branches and agencies of foreign (nonU.S.) banks; (4) mutual or stock sav
ings banks; (5) credit unions; and (6)
building or savings and loan asso
ciations, homestead associations, or
cooperative banks; and (7) all deposi
tory institutions that are bankers’
banks as defined in 12 CFR
S 204.121.
Exclude from this item all balances
50
due from Federal Reserve Banks, in
cluding (1) your institution’s reserve
balances held directly with the Federal
Reserve; (2) your institution’s reserve
balances that were passed through to
the Federal Reserve by a correspon
dent; (3) reserve balances of another
institution for which your institution is
serving as pass-through agent
(correspondent) and that were passed
through by your institution to the
Federal Reserve; and (4) your in
stitution’s clearing balances m ain
tained at a Federal Reserve Bank (see
the paragraph above under Definitions
on “Treatment of pass-through bal
ances” ).
Also exclude (1) all balances due from
any non-U.S. office of a U.S.
depository institution; any non-U.S.
office of a foreign bank; trust com
panies that do not conduct a com
mercial banking business; and New
York State investment companies
(chartered under Article XII of the
New York State Banking Code) that
perform a banking business and that
are majority-owned by one or more
non-U.S. banks; private banks;
Federal Home Loan Banks; and Na
tional Credit Union Administration
Central Liquidity Facility; (2) ballances due from other depository in
stitutions that are pledged by your in
stitution; (3) time and savings deposit
balances held at other depository in
stitutions; (4) trust funds deposited in
other depository institutions by your
institution’s trust department; and (5)
cash items in process of collection.
Item 9: Cash Item s in Process o f
C ollection. Report in this item the
tion and checks or drafts on hand
that will be presented for payment
or forwarded for collection on the
following business day. If the
reporting institution is given im
mediate credit for checks or drafts
deposited with its correspondent,
report such checks or drafts as
“due from” balances in Item 8.
2. Government checks drawn on the
Treasury of the United States that
are in the process of collection.
3. Such other items in the process of
collection that are payable im
mediately upon presentation in the
United States and that are
customarily cleared or collected by
depository institutions as cash
items, including (a) drafts payable
through another depository in
stitution; (b) NOW or NINOW ac
count drafts; (c) credit union share
drafts; (d) redeemed bonds and
coupons; (e) food coupons and cer
tificates; (f) postal and other money
orders, and traveler’s checks; (g)
amounts credited to deposit ac
counts in connection with
automated payment arrangements
where such credits are made one
business day prior to the scheduled
payment date to insure that funds
are available on the payment date;
(h) returned items and unposted
debits; and (i) broker security
drafts.
Exclude from cash items in process of
collection any items handled as non
cash collections, credit card sales slips
and drafts, and debit slips.
balance of all cash items in process of
collection, including:
Other Savings D ep osits (Items 10
and 11)
1. Checks or share drafts in the
process of collection, drawn on a
bank or other depository in
stitution, that are payable im
mediately upon presentation in the
United States, including checks or
drafts forwarded to a Federal
Reserve Bank in process of collec
Savings deposits (including credit
union regular share accounts) are
defined as deposits (including
“primary obligations” as described
earlier) that are not payable on a
specified date or after a specified
period of time from the date of
deposit, but for which the depository
institution expressly reserves the
right to require at least 14 days writ
ten notice before an intended with
drawal.
organization operated for profit are
limited to $150,000. “ Savings”
deposits in excess of this amount must
be reported as demand deposits.
Report in Item 10 or 11 the balance
of all savings deposits not reported
as transaction accounts in Items 1
through 6. Other savings deposits in
clude: (1) savings deposits subject to
telephone or preauthorized transfer
where the depositor is not permitted
or authorized to make more than
three withdrawals per calendar month,
or any period approximating a month
that is at least four weeks long,
for purposes of transferring funds to
another account or for making a
payment to a third party; (2) savings
deposits in the form of IRA or Keogh
Plan Accounts; (3) escrow and trust
accounts that meet the criteria for
savings deposits; (4) credit balances
that meet the criteria for savings
deposits; (5) matured time deposits if
the contract calls for conversion to a
savings deposit upon maturity; and (6)
interest or dividends paid by crediting
savings deposits accounts.
Exclude from other savings deposits
any NOW or share draft accounts
(reported in Item 6); NINOW and
POW accounts (reported in Item 3);
ATS accounts (reported in Item 4);
special passbook or statement ac
counts, such as “ ninety-day notice ac
counts,” “golden passbook accounts” ,
or savings certificates, that have a
specified original maturity or required
notice period of 14 days or more
(reported in Items 13 or 14); and in
terest or dividends accrued but not yet
paid or credited to a savings deposit
or share account.
All club accounts or special purpose
accounts, such as Christmas, vacation,
or similar accounts (whether in the
form of savings or time deposits),
should be reported as savings deposits
by all Edge Act and Agreement cor
porations and by all commercial
banks that were members of the
Federal Reserve System (1) on Sep
tember 1, 1980 or (2) on or after July
1, 1979 but that withdrew from m em
bership prior to September 1, 1980.
For all other depository institutions,
only those club accounts in the form
of savings deposits should be reported
as savings deposits; those club ac
counts in the form of time deposits
should be reported as time deposits
(Item 13 or 14).
Note that for commercial banks. Edge
Act and Agreement corporations, and
U.S. branches and agencies of foreign
banks, savings deposits held by a cor
poration, association, or other
Item 10: O ther Savings D ep osits—
Personal. Report in this item the bal
ance of all other savings deposits or
share accounts that represent funds in
which the entire beneficial interest is
held by one or more natural persons.
Also include as “ personal” savings de
posits: (1) all Individual Retirement Ac
counts (IRA) and Keogh Plan Accounts
in the form of savings deposits, and (2)
trust funds held in the name of a trustee
or other fiduciary if the entire benefi
cial interest is held by a natural person
and other conditions of a savings depos
it are met. In addition, escrow accounts
are regarded as “personal” savings
deposits if the depositor is a natural
person and the other conditions of a
savings deposit are met, even if the
funds are held by the reporting in
stitution as escrow agent.
Item 11: Other Savings D ep osits—
N onpersonal. Report in this item the
balance of all other savings deposits
or share accounts that are tran s
ferable and that represent funds in
which any beneficial interest is held by
a depositor that is not a natural
person.
Item 12: T otal O ther Savings
D ep osits. Report in this item the sum
of Items 10 and 11.
T im e D ep osits (Item s 13 through 16)
Time deposits are defined as deposits
that are payable on a specified date,
after a specified period of time from
the date of deposit, or after a specified
notice period, which in all cases may
not be less than 14 days from the date
of deposit. Time deposits may be in
terest-bearing or noninterest-bear
ing. For purposes of this report,
time deposits include, but are not
limited to, (1) time certificates of
deposit or share certificate accounts
(whether negotiable or nonnegotiable);
(2) time deposit or share certificate
open accounts; (3) savings certificates,
notice accounts, and passbook ac
counts; (4) money m arket time
deposits; (5) escrow funds or trust ac
counts that meet the criteria o f time
deposits; (6) credit balances that meet
the definition of time deposits; (7) all
Individual Retirement Accounts (IRA)
and Keogh Plan Accounts held in the
form o f time deposits; (8) Non
transferable time deposits held by an
employer as part of an unfunded de
ferred compensation plan established
pursuant to subtitle D of the Reserve
Act o f 1978 (Pub. L No. 95-600, 92
Stat. 2763); (9) time deposits or share
certificates maintained as compen
sating balances or pledged as col
lateral for loans; and (10) all interest
or dividends paid by crediting time
deposit accounts.
Time deposits also include those
liabilities referred to as “primary
obligations” that are described earlier,
and that are issued in an original
maturity or with a required notice
period of 14 days or more.
In addition, all depository institutions
other than Edge Act and Agreement
corporations, commercial banks that
were members of the Federal Reserve
System on September 1, 1980, and
commercial banks that were members
of the System on or after July 1, 1979
but withdrew from membership prior
to September 1, 1980, should include
as time deposits those club accounts
51
in the form of time deposits (see p ara
graph under “Other Savings Depos
its” for treatment of club accounts).
$100,000 or more, do not combine
separate accounts or certificates, even
if held by the same customer.
Exclude from time deposits matured
time deposits that are not auto
matically renewed (to be reported
as a demand or savings deposit, as a p
propriate). Exclude from time deposits
and from this report subordinated
notes and debentures, borrowings
from “exempt entities” , and interest
or dividends accrued but not yet paid
or credited to a time deposit or share
certificate account.
Item 17: V ault Cash (tellers’ cash,
Item 13: T im e D ep osits— Personal.
Report in this item all time deposits,
regardless of maturity, that meet the
criteria for “personal” deposits as
specified in the Definitions section.
Item 14: T im e D ep osits— Nonpersonal. Report in Item 14.a the
balance of all time deposits that meet
the criteria for “nonpersonal” time
deposits as specified in the Definitions
section with original maturities of less
than 3 l/2 years. Report in Item 14.b
the balance of all time deposits that
meet the criteria for “nonpersonal"
time deposits as specified in the Defi
nitions section with original maturities
of 3'/2 years or more.
Item IS: T otal T im e D ep osits. Report
in this item the sum of Items 13, 14.a,
and 14.b.
Item 16: A ll tim e deposits in
d enom ination o f $100,000 or m ore.
Report in this item the balance of all
time deposits (including share cer
tificate accounts), both personal and
nonpersonal, of $100,000 or more
reported in Item 13 or 14. Include
deposits issued in denominations of
less than $100,000 that, because of in
terest or dividends paid or credited,
have a current balance of $100,000 or
more. Also include all “ primary
obligations” that are reported in Item
13 or 14.
In determining if a time deposit is
52
cash working funds). Include as vault
cash only U.S. currency and coin
owned and held by the reporting in
stitution, whether or not held on the
premises, that may, at any time, be
used to satisfy depositors’ claims; U.S.
currency and coin in transit to a
Federal Reserve Bank or a correspon
dent depository institution if the
reporting institution has not yet
received credit; and U.S. currency and
coin in transit from a Federal Reserve
Bank or a correspondent depository
institution if the reporting institution
has already been charged.
Exclude foreign currency and coin;
currency and coin whose numismatic
or bullion value is in excess of face
value; and currency and coin that the
reporting institution does not have the
full right to use, such as coin collec
tions held for safekeeping, or currency
and coin sold under a repurchase
agreement or purchased under a
resale agreement.
Schedule A: O ther R eservable
O bligations by R em aining M aturity.
For a discussion of the items to be
reported in this schedule (obligations
by affiliates and ineligible ac
ceptances), refer to the Detailed In
structions for the Preparation o f t h e
Report o f Transaction Accounts,
Other Deposits and Vault Cash.
APPENDIX D
1982 Reporting and Reserve Maintenance Schedules
Member and Nonmember Quarterly Respondents
Group A
Reporters'
Group B
Reporters'
Group C
Reporters'
Oct. 15 - 21
Nov. 12 - Feb. 17
Nov. 19 - 25
Dec. 17 - Mar. 17
Dec. 17 - 23
Jan. 14 - Apr. 14
Jan. 2 1 - 2 7
Feb. 18 - May 12
Feb. 18 - 24
Mar. 18 - June 16
Mar. 1 8 - 2 4
Apr. 15 - July 14
Apr. 15 - 21
May 13 - Aug. 11
May 20 - 26
June 17 - Sept. 15
June 17 - 23
July 15 - Oct. 13
July 15 - 21
Aug. 12 - Nov. 17
Aug. 19 - 25
Sept. 16 - Dec. 15
Sept. 16 - 22
Oct. 14 - Jan. 12
Oct. 2 1 - 2 7
Nov. 18 - Feb. 16
Nov. 18 - 24
Dec. 16 - Mar. 16
Dec. 16 - 22
Jan. 13 - Apr. 13
1981— 4th Quarter
Computation Period
Maintenance Period
1982—1st Quarter
Computation Period
Maintenance Period
1982—2nd Quarter
Computation Period
Maintenance Period
1982—3rd Quarter
Computation Period
Maintenance Period
1982— 4th Quarter
Computation Period
Maintenance Period
1U n d er t h e stagge red reporting c y c le , G r o u p A rep o rters rep o rt d u rin g the first month o f each calen d ar q u arter ( i. e . , J an u ary , A p ril, J u ly , and O cto b e r); G r o u p B reporters
report d u rin g the second m onth o f e ach calen d ar quarter ( i. e . , F e b ru ary , M ay, A ugust, and N o v em b e r); and G ro u p C reporters rep o rt d u rin g th e third m o n th o f ea ch calendar
quarter ( i.e ., M arch , J u n e ,.S e p te m b e r , and D ecem b er).
53
List o f Federal Reserve Banks and Branches
FEDERAL RESER VE B A N K
A D D R E SS
B OSTON*
600 A tla n tic A venu e. Boston, M assachusetts 0 21 0 6
NEW YO RK*
33 L ib e rty Street (Federal Reserve P .O . S tation ). N ew Y o r k , N ew Y o r k 10045
B u ffa lo Branch
160 D e la w a re A venu e (P .O . Box 961), B u ffa lo . N ew Y o rk 14240
P H IL A D E L P H IA
100 N o rth S ixth Street ( P .O . B ox 66), P h ila d e lp h ia . Pennsylvania 19105
CLEVELAND*
1455 East S ixth Street (P .O . Box 6 38 7 ), C leveland. O h io 44101
C in c in n a ti B ranch
150 E ast F o u rth Street (P .O . Box 999), C in c in n a ti, O h io 45201
P ittsburgh B ranch
717 G r a n t Street (P .O . B ox 867), P itts b u rg h , Pennsylvania 15230
R IC H M O N D *
701 East B yrd Street (P .O . Box 27622), R ic h m o n d , V ir g in ia 232 1 9
B altim o re B ranch
114 -1 2 0 E ast Lexing ton Street (P .O . Box 1378), B a ltim o re , M a ry la n d 2 12 0 3
C h a rlo tte B ranch
401 South T ry o n Street (P .O . Box 30248), C h a rlo tte , N o rth C a ro lin a 2 82 3 0
C u lp ep er C om m u n ic a tio n s
and Records C en ter
ATLANTA
P .O . D ra w e r 2 0, C u lp ep er, V ir g in ia 22701
104 M a r ie tta Street, N .W . , A tla n ta , G e o rg ia 3 0 3 0 3 (P .O . Box 1731, A tla n ta , G e o rg ia 30301)
B irm in g h a m B ranch
1801 F ifth A ve nu e, N o rth (P .O . B ox 10447), B irm in g h a m , A la b a m a 35202
Jacksonville B ranch
5 15 Julia Street, Jacksonville, F lo rid a 32231
M ia m i B ranch
3 77 0 S .W . 8th Street, C oral G ables, F lo rid a 3 3 1 7 8 (P .O . Box 520 8 7 , M ia m i. F lo rid a 3 31 5 2 )
N ashville B ranch
301 E ig h th A venue, N o rth , N ashville, Tennessee 37203
N ew O rleans B ranch
5 25 St. C harles A venue (P .O . B ox 616 3 0 ), New O rle a n s , Louisiana 70161
C H IC A G O *
2 30 South La S a lle Street (P .O . B ox 834), C hicago, Illin ois 6 0 6 9 0
D e tro it B ranch
160 F o rt Street, W e s t (P .O . Box 1059), D e tro it, M ic h ig a n 48231
S T . L O U IS
411 Locust Street (P .O . B ox 442 ), St. Louis, M is s o u ri 63166
L ittle R ock B ranch
325 W e s t C a p ito l A venu e (P .O . Box 1261), L ittle R ock, A rk a ns a s 72203
Louisville B ranch
4 1 0 South F ifth Street (P .O . Box 327 1 0 ), Louisville, K e n tu c k y 4 0 2 3 2
M e m p h is B ranch
200 N o rth M a in Street (P .O . Box 407), M e m p h is , Tennessee 38101
M IN N E A P O L IS
250 M a rq u e tte A venue, M in n e a p o lis , M in n e so ta 5 54 8 0
H e le n a B ranch
4 0 0 N o rth P a rk A venu e, H e le n a , M o n ta n a 59601
K A N S A S C IT Y
925 G r a n d Avenue, K ansas C ity , M is s o u ri 6 4 1 9 8
D en ver B ranch
1020 16th Street (P .O . Box 5228, T e r m in a l A n n e x ), D en ve r, C o lo ra d o 80217
O k la h o m a C ity B ranch
226 D e a n A . M c G e e , A ve n u e (P .O . B ox 2 5 1 2 9 ), O k la h o m a C ity , O k la h o m a 73 1 2 5
O m a h a B ranch
102 South Seventeenth Street, O m a h a , N eb ra s k a 68 1 0 2
DALLAS
4 0 0 South A k a r d Street (S ta tio n K ), D a lla s , T e xas 75222
El Paso B ranch
301 E ast M a in Street (P .O . Box 100), E l Paso, Tex as 79999
Houston B ranch
1701 San Jacinto Street (P .O . B ox 2578), H ouston , Texas 77001
San A n to n io B ranch
126 E ast N ueva Street (P .O . B ox 1471), San A n to n io , Texas 78295
S A N F R A N C IS C O
4 0 0 Sansom e Street (P .O . Box 7702), San Francisco, C a lifo rn ia 94120
Los Angeles B ranch
4 0 9 W e s t O ly m p ic B oulevard (P .O . Box 2077), Los A ngeles, C a lifo rn ia 90051
P o rtla n d B ranch
9 1 5 S .W . S ta rk Street (P .O . Box 3436), P o rtla n d , O regon 9 72 0 8
Salt L a k e C ity B ranch
120 South State Street (P .O . Box 30780), Salt L a k e C ity, U t a h 8 4 1 3 0
Seattle B ranch
1015 Second A venue (P .O . Box 3567), Seattle, W a s h in g to n 981 2 4
• A d d itio n a l offices o f th e se B an k s are located a t Lewiston, M a in e 04240; W in d so r Locks. C o n n ec tic u t 06096; C ra n fo rd , New Jersey 07016; Jerich o, New Y ork 11753;
Utica at O ris k an y . New Y ork 13424; C o lu m b u s, O h io 43216; C o lu m b ia , S o u th C aro lin a 29210; C h arles to n , W est V irginia 25311; Des M oines, Iowa 50306; I n d ia n a p o lis. I n
d ia n a 46204; and M ilw aukee. W isco n sin 53202.
54
Boundaries of Federal Reserve Districts and Their Branch Territories
M i n n e a p o l i s <g.
D e tr o it
'land i ^
.p li& n r
Chicago
O m ah i
?*C'SCO
Kansas Ci t y
t. Loui s
p fji g r lo tt y
V
\Oktahoma City
I
. H /* " ‘ f
/ ./f f /f flo e *
\
B irm in g h a m 1
/ / fe o
jack*®"
Houston
NewOrlroni
San Antonio
o
Q>
HAWAII
©
Legend
Boundaries o f
©
Federal Reserve Districts
Boundaries ol
Federal Reserve Branch
(i)
Board o f G overnors o f the
•
Federal Reserve Branch
Federal Reserve System
Cities
Federal Reserve Bank Cities
Federal Reserve Bank
F a c ility
T e rrito rie s
FRB 3-10000-0582-C
55
@FedFRASER