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F E D E R A L R E S E R V E BA N K O F NEW YO R K r Circular No. 6 6 1 4 "1 L October 7, 1970 AMENDMENT TO REGULATION D Transfers from Trust Department Savings Deposits to Cover Checks T o A ll M e m b e r B a tik s, a n d O th ers C on cern ed, in th e S eco n d F e d e ra l R e se r v e D i s t r ic t : Enclosed is a copy of an amendment, effective November 9, 1970, to Regu lation D, “ Reserves of Member Banks,” of the Board of Governors of the Federal Reserve System. The amendment is designed to prevent the use of funds deposited by a member bank’s trust department in a savings deposit in the com mercial department of that bank in tandem with a checking account so as to avoid the higher demand-deposit reserve requirements. A broader version of this amendment, covering all time deposits of trust departments, was submitted by the Board of Governors for public comment in March 1970; the text of that version was sent to you in our Circular No. 6517, dated April 3, 1970. In confining the final version of the amendment to savings deposits of a tru st department, the Board stated, “ it is intended that the trust department of a member bank may continue to classify a certain por tion of the funds on deposit in its commercial department as a time deposit in accordance with the interpretation set forth at § 204.102 (1959 Federal Reserve Bulletin 1475).” Additional copies of the amendment will be furnished upon request. A lfred H a yes, President. J B o ard o p G overnors of t h e F ederal R eserv e S y st e m RESERVES OF MEMBER BANKS A M E N D M E N T TO R E G U L A T IO N D Effective November 9, 1970, section 204.1(e)(1) is amended to read as follows: SECTION 204.1—D EFIN ITIO N S • * * (e) Savings deposits. The term “savings de posit” means a deposit— (1) which consists of funds deposited to the credit of one or more individuals, or of a corpora tion, association, or other organization 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, except where the deposit is to the credit of the bank’s own trust department and the funds involved are utilized to cover checks; and * « » 4Deposits in joint accounts of two or more individuals may be classified as savings deposits ifthey meet the other require ments of the above definition, but deposits of a partnership operated for profit may not be so classified. Deposits to the credit of an individual of funds in which any beneficial interest is held by a corporation, partnership, association, or other organization operated for profit or not operated primarily for religious, philanthropic, charitable, educational, fraternal, or other similarpurposes may not be classifiedas savings deposits. P R IN T E D I N N E W YORK
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