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Fe d e r a l R e s e r v e bank of Dalla s D ALLAS, TEXAS June 9,1966 RESERVES OF MEMBER BANKS To the Member Banks of the Eleventh Federal Reserve District: Reference is made to my letter of May 30, 1966, transmitting the text of an interpretation issued by the Board of Governors of the Federal Reserve System under date of May 25, 1966, concerning re serves against funds received by member banks in connection with instalment loans and treated by the member bank as hypothecated “ deposits.” The Board’s interpretation specified that where the agree ment between the bank and the borrower is such that instalment pay ments on loans are irrevocably assigned to the bank and cannot be reached by the borrower or his creditors, such payments are not “ deposits” regardless of the terms used in relevant State statutes or in the bank’s books and records and, therefore, are not subject to the reserve requirements of Regulation D. In accordance with this interpretation and effective with reserve computation periods beginning June 9, 1966, funds of this type should no longer be reported in Column 7, “ Time Deposits,” of the Report of Deposits and Related Data submitted to this Bank by member banks on Form AC-8, in the case of reserve city banks, and on Form AC-62, in the case of nonreserve city banks. The Report of Deposits and Related Data forms referred to above will be revised as promptly as possible to give effect to this change, as well as certain minor changes concerning which you were advised in my letter of January 25, 1966. Yours very truly, Watrous H. Irons President This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
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