View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

Consumer News
The Bank Customer’s Publication

Volume I No. 11

EDITOR: Josie Downey

November 1982


Deposit Insurance
Since 1933 the Federal Deposit Insurance Corporation has been protecting the
funds of bank customers by insuring
deposits up to the legal limit in national
banks and most State-chartered banks.
All types of deposits received by a bank
in its usual course of business are insured,
including savings deposits, checking
deposits, Christmas savings and other
certificates of deposit, uninvested trust
funds, certified checks, cashiers' checks,
officers' checks, money orders and drafts,
letters of credit and travelers' checks for
which an insured bank is primarily liable.
The basic insured amount for each depositor is $100,000. Deposits maintained in
different rights or capacities are each
separately insured up to $100,000. Thus, a
person may hold or have an interest in
more than one separately insured ac- count
in the same insured bank. Funds owned in
the same right and capacity, such as a
checking and savings account owned by
the same depositor are added together and
insured up to a total of $100,000. If a
depositor has deposit accounts in different
insured banks, the maximum insurance is
applicable separately to the insured
deposits in each insured bank.
Joint accounts and individually owned
accounts are held in separate rights and
capacities and thus are separately insured. As a result, two or more persons
may have, in addition to their individually
insured accounts, a joint account in the
same bank insured separately to $100,000.
Each co-owner must person- ally sign an
account signature card and

have equal withdrawal rights. Time certificates of deposits usually do not re- quire
a signature card.
Rearranging the names of the owners of
more than one joint account for the same
owners does not gain added insurance
protection. No joint account qualifies for
more than $100,000 in insurance.
When an individual has an interest in
more than one joint account, all such
accounts held by the same combination of
individuals are added together for
insurance purposes and the limit is
$100,000. Since each co-owner is deemed to
have an equal interest in the account —
unless another arrangement is made with
the bank – the interest of each co-owner (in
the case of two owners) is considered onehalf and the interest of each would be
insured up to $50,000.
Revocable trust accounts, or any sim- ilar
accounts in which the funds are intended to
pass on the death of the owner to a named
beneficiary, are considered testamentary
accounts and are insured as a form of
individual account. If the beneficiary is a
spouse, child or grandchild of the owner,
the funds are insured for each beneficiary
up to a total of $100,000 separately from
any other individual accounts of the
owners. If the beneficiary is other than
those listed, the funds in the account are
added to any other individual accounts of
the owner and insured up to the limit of
More detailed information about FDIC
insurance coverage may be found in “Your
Insured Deposit,” a booklet obtainable free
at FDIC Regional Offices.
Kathy True
Consumer Affairs Specialist

Congress, in an effort to simplify the
“Truth-in-Lending” Act, has reduced
some of the areas covered and introduced
new rules which became effective on
October 1, 1982.
Although the Act (Regulation Z) has
been simplified, it still contains more than
15,000 words and may be confusing to
some consumers. Basically, the new rules
require grouping of disclosure information
and keeping it separate from other
contract terms.
Among the more important changes are:
1. Credit for agricultural purposes,
option contracts, letters of credit,
layaway plans, home fuel budget
loans, loans issued from trusts, and
loans for rental properties not
owner- occupied no longer are
2. For many residential mortgages the
creditor is required to furnish the
customer with a Truth-in-Lending
disclosure form within three days
after accepting an application.
3. Demand loan disclosures now are
based on a one-year maturity
rather than six months.
4. Disclosure requirements are limited
to legal obligations rather than informal understandings.

Seller's points – but not buyer's
points – are excluded from the
finance charge.

Federal Deposit Insurance Corporation
Washington, D.C. 20429

(Continued on Page 3)

H-1 – Credit Sale Model Form

H-2 – Loan Model Form




(continued from Page 1)


Reference to any payment larger
than the other payments is eliminated. However, these “balloon
payments” must be disclosed as
part of the payment schedule.

7. Credit life insurance authorization
requirements are less stringent
Regulation Z.
8. Prepayment penalties must be disclosed but detailed descriptions of
them no longer are required.
9. The time period for correcting
errors to avoid civil liability has
been extended from 15 days to 60
days following discovery of the
error. Creditors also are freed
from liability for improper
disclosures which do not involve
material provisions or which result
from clerical errors.
If you have any questions about the Truthin-Lending Simplification and Re- form
Act you can obtain information from the
Federal Reserve System, the Office of the
Comptroller of the Cur- rency (for
national banks), the Federal Trade
Commission, the Federal Home Loan
Bank Board, the National Credit Union
Administration, or the Federal Deposit
Insurance Corporation Regional Offices.
Simona Frank
Review Examiner

Balancing Check Books
Balancing your checkbook each month
will be made easier if you keep accurate
records of the checks at the time they are
written. An example of how to do this is
provided in an accompanying illustration.

In reconciling an account it is important to account for all outstanding items.
These include checks you have written
which have not yet been returned to your
bank and therefore not charged to your
account. Deposits made after the closing
date of the bank statement also will not be
included on your statement but will have to
be added during the reconciliation.
Here are some tips on how to make the
job easier.
1. Review your bank statement for
charges other than checks that have
been made against your account.
These could include service charges,
or charges for a supply of checks.
These amounts must be subtracted
from your balance. If you have an
interest-bearing checking account
the amount of interest earned must
be added.
2 . Sort cancelled checks in numerical
order. The missing checks will tell
you which ones have not yet been
returned to the bank.


3. Compare the amounts of the cancelled checks and deposits shown on
the statement with the amount you
show in your check register and
mark off each item as you verify it.

Now, you are ready to begin the
reconciliation. Record the last balance
shown on the bank statement. Add any
deposits which have not been credited to
your account. List all outstanding checks
and subtract them from the subtotal you
obtained after adding the deposits not yet
credited. The total should agree with the
balance in your checkbook register.
(See illustration).
If the figures do not agree, here's how to
locate the discrepancy.
1. Recheck your calculations in your
check register and reconciliation
2. Verify the balance carried over from
page to page in the check register.
3. Be sure you have deducted service
charges and added any interest.
4. Match the amounts on the checks in
the check register with those shown
on the statement.
5. Check to see if any outstanding checks
from previous statements remain
When you have satisfactorily com- pleted
your reconciliation, file the rec- ords. They
are useful in completing tax forms or
proving a payment has been made.
Simona Frank
Review Examiner

The above example shows the number of the checks, the date pf the checks and deposits, the payees, the purpose
of the checks, and the amount of the checks.


Verificando el balance
de su talonario
de cheques
La tarea de verificar mensualmente
el balance de su talonario de cheques se
le facilitará si usted mantiene
expedientes detallados cuando extiende sus cheques. En la ilustración a
continuación le ofrecemos un ejemplo
de como lograr esto.
Es importante considerar los artículos pendientes de pago en la concilación de una cuenta. Estos incluyen
cheques que usted ha extendido pero
que no han sido devueltos a su banco y
por consiguiente no han sido debitados
a su cuenta. Los depósitos efectuados
después de la fecha de cierre del estado
bancario no se incluirán en su estado de
cuenta, pero tendrán que ser sumados
durante la conciliación.
A continuación les ofrecemos algunos consejos de como facilitar esta
1. Repase su estado bancario para
verificar si estuvo sujeto a otros

cargos adicionales además de las
cantidades debitadas de sus cheques. Estos
pueden incluir Cargos por servicio y
mantenimiento, o cargos por suministrarle cheques adicionales. Estas cantidades deben ser restadas de su balance. Si
usted tiene una cuenta de cheques que
devenga interés tiene que sumar la
cantidad de interés acumulada.
2. Clasifique los cheques cancelados en
orden numérico. Los cheques que eche de
menos le indicarán aquellos que no han
Sido devueltos al banco.

Compare las cantidades de los Cheques
cancelados y los depósitos incluídos en el
estado de cuenta con la cantidad que
usted muestra en su registro de cheques.
Coteje cada artículo según lo verifique.


Ahora estará preparado para comenzar la conciliación. Anote el último
balance indicado en su estado bancario.
Sume cualquier depósito que no ha sido
abonado a su cuenta. Haga una lista de
los cheques pendientes de pago y réstelos
del subtotal obtenido después de sumar
los depósitos que no han sido abonados.
El total debe concordar con el balance en
el registro del talonario de cheques. (Vea
el modelo que incluímos a continuación)
Si las cifras no concuerdan, aquí
detallamos como puede determinar
donde existe la discrepancia.
1. Revise sus cálculos en su registro de
cheques y su formulario de
2. Verifique el balance que lleva de
página a página en su registro de
3. Deduzca los cargos por servicio y
mantenimiento y sume cualquier
interés devengado.
4. Compare las cantidades de los
cheques en el registro de cheques
con las cantidades incluídas en el
estado de cuenta.
5. Verifique si en los estados de
cuentas atrasados los cheques
pendientes de pago todavía no han
sido devueltos al banco.
Cuando concluya la conciliación
satisfactoriamente archive sus expedientes. Estos expedientes le serán
útiles cuando este completando su
formulario de contribuciones o cuando
necesite verificar si una cuenta ha Sido
Material in this newsletter maybe reprinted
without permission, but may not be copyrighted according to Public Law 94-553. Section 105, title 17 of the United States Code.

Shown above is a format that may be helpful to you in balancing your account.


Questions From Bank Customers


Can a bank ask an applicant to show her/his paycheck stub when
applying for a credit card?


Yes. Many banks use this procedure to verify income.


Does FDIC issue waivers of early withdrawal penalty provisions
for certificates of deposits?


Generally not. However, the FDIC, by regulation, grants such
waivers in cases involving presidentially declared disaster areas.


Can a bank refuse to delete a spouse's name from a credit card
although the couple is divorced?


Yes. The bank is under no obligation to remove a husband's or
wife's name.


Does the FDIC insure U.S. Government Bonds?



No. The U.S. Government issues are direct obligations of the U.S.
Treasury Department.

– 800-424–5488–


Can a bank renew a 2-1/2 year certificate automatically?


Yes. There is no Federal law that requires the bank to notify the
customer upon renewal.


Are early withdrawal penalties provided by Federal regulation?




Are there FDIC regulations concerning borrowing funds against
certificates of deposit?


Generally not. However, the interest charged on the loan must be
at least 1% higher than the interest earned on the certificate.
GPO 900-526