Full text of Federal Reserve Bank of New York Circulars : 5134. Amendments to Regulations Q and D

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FEDER AL R E SER VE BANK
O F NE W YORK

r Circular No. 5 1 3 4 1

L January 8, 1962 J

AMENDMENTS TO REGULATIONS Q AND D
Effective January 15,1962

To the Member Banks of the
Second Federal Reserve District:

Enclosed are copies of an amendment to Regulation Q and of an amend­
ment to Regulation D of the Board of Governors of the Federal Reserve
System, both effective January 15, 1962.
The puipose of the amendment to Regulation Q is (1) to prevent certain
practices that facilitate the use of a savings deposit as a regular means for
drawing checks on the depository bank, and (2) to add certain liberalizing
provisions that would permit payment of a savings deposit to anyone holding
title to the deposit in a fiduciary capacity or pursuant to a court order, or as
security for credit extended to the depositor. The purpose of the amendment
to Regulation D is to conform the definition of “savings deposits” as con­
tained in Regulation D to the definition of this term in Regulation Q.




Additional copies of the enclosures will be furnished upon request.

A lfred H

ayes,

President.

PAYM ENT

OF

IN T E R E S T

ON

D E P O S IT S

AMENDMENT TO REGULATION Q
I ssued

by

th e

B oard

of

G o vernors

of t h e

F ederal R eserve S y s t e m

Effective January 15, 1962, section 217.1(e) is amended to read as
follows:
SECTION 217* 1--DEFINITIONS

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*

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*

(e)
Savings deposits.—(1) The term "savings deposit* means a
deposit
(i) which consists of funds deposited to the credit of one or
more individuals, or of a corporation, association, or other organi­
zation operated primarily for religious, philanthropic, charitable,
educational, fraternal, or other similar purposes and not operated
for profit; 4 or in which the entire beneficial interest is held by one
or more individuals or by such a corporation, association, or other
organization; and
(ii) with respect to which the depositor is required, or may at
any time be required, by the bank to give notice in writing of an
intended withdrawal not less than 30 days before such withdrawal
is made.
(2)
Subject to the provisions of subparagraph (3) of this paragraph,
a member bank may permit withdrawals to be made from a savings de­
posit only through payment5to the depositor himself (but not to any
other person whether or not acting for the depositor), except
(i)
where the deposit is represented by a pass book, to any
person presenting the pass book; 5

D eposits in joint accounts of two or more individuals may be c la ssifie d as savings
d ep osits if they meet the other requirements of the above definition but deposits of a
Partrtership operated for profit may not be so c la ssifie d .
D e P0 *lts to the credit of an
individual of funds in which any beneficial, interest is held by a corporation, partner­
ship, asso cia tio n , or other organization operated for profit or not operated primarily for
religious, philanthropic, charitable, educational, fraternal, or other similar purposes may
not be c la ssifie d as savings d ep osits.
Payment from a savings deposit or presentation of a p a ss book may be made over
the counter, through the m alls, or otherwise.




(O ver)

(ii) to an executor, administrator, trustee, or other fiduciary
holding the savings deposit as part of a fiduciary estate, or to a
person, other than the bank of deposit, holding a general power of
attorney granted by the depositor;
(iii) to any person, including the depository bank, that has ex­
tended credit to the depositor on the security of the savings de­
posit, where such payment is made in order to enable the creditor
to realize upon such security;
(iv) pursuant to the order of a court of competent jurisdiction;
(v) upon the death of the depositor, to any person authorized by
law to receive the deposit; or
(vi) with respect to interest paid to a third person pursuant to
written instruction or assignment by the depositor accepted by the
bank, and placed on file therein.
(3) Notwithstanding the provisions of subparagraph (2) of this para­
graph, no withdrawal shall be permitted by a member bank to be made
from a savings deposit after January 1 5 , 1962, through payment to the
bank itself or through transfer of credit to a demand or other deposit
account of the same depositor (other than of interest on the savings de­
posit) if such payment or transfer is made pursuant to any advertised
plan or any agreement, written or oral,
(i) which authorizes such payments or transfers of credit to be
made as a normal practice in order to cover checks or drafts drawn
by the depositor upon the bank; or
(ii) which provides that such payments or transfers of credit
shall be made at daily, monthly, or other such periodic intervals,
except where made to enable the bank, on the depositor’s behalf
and pursuant to his written instructions, to effect the payment of
installments of principal, interest, or other charges (including
taxes or insurance premiums) due on a real estate loan or mortgage.
(4) Where a savings deposit is evidenced by a pass book, every with­
drawal made upon presentation of the pass book shall be entered in the
pass book at the time of withdrawal, and every other withdrawal from
such a deposit shall be entered in the pass book as soon as practicable
after the withdrawal is made.




RESERVES

OF M EM BER

BANKS

AMENDMENT TO REGULATION D
I ssu ed

by

th e

B oard

of

G ov e r n o r s

of t h e

F ed eral R eserve S y s t e m

Effective January 15, 1962, section 204.1(e) is amended to read as
follows:
SECTION 204. l —DEFINITIONS.

*
( e)

uno
pro

*

*

*

*

Savings deposits.—The term "savings deposit* means a deposit

(1) which consists of funds deposited to the credit of one or more
individuals, or of a corporation, association, or other organization oper­
ated primarily for religious, philanthropic, charitable, educational,
fraternal, or other similar purposes and not operated for profit; 4 or in
which the entire beneficial interest is held by one or more individuals
or by such a corporation, association, or other organization; and
(2) with respect to which the depositor is required, or may at any
time be required, by the bank to give notice in writing of an intended
withdrawal not less than 30 days before such withdrawal is made.

pu

of

D eposits in joint accounts of two or more individuals may be c la s s ifie d as savings
d eposits if they meet the other requirements of the above deiinition but dep osits of a
partnership operated for profit may not be so c la s s ifie d .
D eposits to the credit of an
individual of funds in which any beneficial interest is held by a corporation, partner­
sh ip , a sso cia tio n , or other organization operated for profit or not operated primarily for
re ligiou s, philanthropic, charitable, educational, fraternal, or other similar purposes may
not be c la ssifie d as savings d e p o sits.