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FEDERAL RESERVE BANK
OF NEW YORK
[
Circular No. 9414 ~J
December 6, 1982
J
REGULATIONS D AND Q
— $2.1 Million Exemption from Reserve Requirements
— Reserve Requirements for Money Market Deposit Accounts
— Maintenance of NOW Accounts by Governmental Units
— Low-Reserve Tranche Expanded
To All Depository Institutions, and Others Concerned,
in the Second Federal Reserve District:
Following is the text of a statement issued by the Board of Governors of the Federal Reserve System:
The Federal Reserve Board has made several changes in its rules to implement recently enacted legislation affecting
reserve requirements and the availability of NOW accounts.
The Gam-St Germain Depository Institutions Act of 1982 provides:
— That the first $2 million of reservable liabilities in depository institutions are to be subject to a zero percent reserve
requirement;
— That depository institutions are to be authorized to issue a new type of account, designated a Money Market
Deposit Account (MMDA), to be competitive with money market mutual funds; and
— That governmental units are eligible to maintain NOW accounts.
To conform its regulations to the requirements of the Gam-St Germain Act affecting reserve requirements, the Board
revised its Regulation D — Reserve Requirements of Depository Institutions — as follows:
1. Effective with the reserve computation period beginning December 9, 1982, and with the reserve maintenance
period beginning December 23, the first $2.1 million of deposits subject to reserve requirements at depository institutions
are subject to a zero percent reserve requirement. The exemption amount of $2.1 million takes into account the growth in
deposits for the one-year period ending June 30, 1982, as required by the Act.
This will completely exempt some 24,600 institutions, including approximately 18,400 institutions with total
deposits of less than $2 million that have previously been exempted from reserve requirements by Board order, or that have
no reservable liabilities.
Institutions that are now reporting their reserve liabilities to the Federal Reserve should continue to report until
further notice, even if they are exempt from holding reserves under this provision of the Act.
2. With respect to the new Money Market Deposit Account authorized by the Gam-St Germain Act, the Depository
Institutions Deregulation Committee (DIDC) has authorized depository institutions to issue an MMDA with the following
principal features: an account available to all depositors, including businesses; with no regulatory interest rate ceiling so
long as a balance of $2,500 is maintained; up to six automatic or pre-authorized transfers monthly, up to three of which can
be by draft; no restriction on withdrawals made in person, by messenger or by mail.
The DIDC also authorized — but said it would reconsider at its December 6 meeting — unlimited telephone transfers
by the account holder from an MMDA to other accounts of the depositor at the same institution.
The Act and its legislative history provide that the MMDA account is not to be subject to transaction account reserve
requirements (generally 12 percent) even though up to six third-party transfers, including up to three by draft, are
permitted.
(OVER)
The Board established for such accounts the same reserve requirements that apply to savings accounts: a zero percent
requirement for personal M M DA’s and a 3 percent requirement for nonpersonal M M DA’s.
For M M DA’s established with telephone transfer privileges beyond the six authorized transfers, the transaction
account reserve requirement of 12 percent will apply.
The reserve percentages are those that will apply when the current phasing-in of new reserve requirements under the
Monetary Control Act is completed. Member banks are phasing down to the new requirements on a 3% year schedule to
end in February 1984. Nonmember institutions are phasing up to the reserve requirements of the Monetary Control Act
over a period ending in September 1987.
The Board also amended its Regulation Q — Interest on Deposits — to authorize member banks to permit
governmental units — not previously eligible — to place deposits in NOW accounts. This action conformed Regulation Q
to provisions of the Gam-St Germain Act. Entities eligible to maintain NOW accounts as a result of this action include the
Federal Government, State governments, county and municipal governments and their political subdivisions, the District
of Columbia, the Commonwealth of Puerto Rico, American Samoa, Guam, any territory or possession of the United States
and their political subdivisions.
This action was made effective October 15, 1982, the date of enactment of the Gam-St Germain Act.
Finally, under the terms of the Monetary Control Act of 1980, the Board increased from $26 million to $26.3 million
the amount of transaction account deposits subject to a reserve requirement ratio of 3 percent. The Monetary Control Act
requires that this low reserve tranche be recalculated yearly based on the change in total transaction accounts at all
depository institutions determined as of June 30.
The text of the amendments to Regulations D and Q will be sent to you shortly. Questions may be directed to the
following:
Reporting Requirements:
Richard J. Gelson, Assistant Vice President (Tel. No. 212-791-8225)
Nancy Bercovici, Manager, Statistics Department (Tel. No. 212-791-8227)
Paula B. Schwartzberg, Chief, Deposit Reports Division (Tel. No. 212-791-8590)
Maintenance Requirements:
John M . Eighmy, Assistant Vice President (Tel. No. 212-791-7766)
Kathleen A . O ’Neil, Manager, Accounting Department (Tel. No. 212-791-7768)
Patricia H. Lupack, Chief, Accounting Control Division (Tel. No. 212-791-5250)
Interpretation of Regulations D and Q:
George R. Juncker, Manager, Consumer Affairs and Bank Regulations Department
(Tel. No. 212-791-5910)
Joyce E. Motylewski, Attorney, Legal Department (Tel. No.. 212-791-5038)
A nthony
M.
S olom on,
President.
FEDERAL RESERVE SYSTEM
[12 C F R Part 204]
Regulation D
[Docket No.
R-0441]
R E S E R V E R E Q U I R E M E N T S OF D E P O S I T O R Y INSTIT U T I O N S
E x e m p t i o n for First $2 M i l l i o n of Reservable L i a b i l i t i e s
AGENCY:
Boa r d of G o v e r n o r s of the F e d e r a l Reserve System.
ACTION:
Fin a l rule.
S U M M A R Y : The B o a r d has amended R e g u l a t i o n D — Reserve R e q u i r e m e n t s of
D e p o s i t o r y I n s t i t u t i o n s (12 C F R P a r t 204) to implement sec t i o n 411 of the
Garn-St G e r m a i n D e p o s i t o r y I n s t i t u t i o n s Act of 1982 (Pub. L. 97-320; 96
Stat. 1520) ("Garn-St G e rmain Act").
Under this provision, the first $2
m i l l i o n of r e s e r v a b l e l i a b i l ities of each d e p o s i t o r y i n s t i t u t i o n are
subject to a res e r v e req u i r e ment of zero percent.
The e f f e c t of this
p r o v i s i o n is to c o m p l e t e l y e x empt from b a s i c Federal r e serve requir e m e n t s
small d e p o s i t o r y institutions.
E F F E C T I V E DATE:
December 9, 1982.
This date is the b e g i n n i n g of the
first r e serve c o m p u t a t i o n p e riod to w h i c h the exemp t i o n from reserve
r e q u i r e m e n t s will apply.
F O R F U R T H E R I N F O R M A T I O N CONTACT:
G i l b e r t T. Schwartz, A s s o c i a t e General
C ounsel
(202/452-3625),
or
Paul
S.
Pilecki,
Senior
Attorney
(202/452-3281), Legal Division, B oard of G o v e r n o r s of the F e d e r a l Reserve
System, W a s h i n g t o n , D.C. 20551.
S U P P L E M E N T A R Y INFORMATION:
The M o n e t a r y C o n t r o l Act of 1980 (Title I of
Pub. L. 96-221)
("MCA") r equires all d e p o s i t o r y i n s t i t u t i o n s that
m a i n t a i n t r a n s a c t i o n accounts or n o n p e r s o n a l time d e p o s i t s to m a i n t a i n
reserve r e q u i r e m e n t s that are u n i f o r m l y a p plied r e g a r d l e s s of an
instit u t i o n ' s size.
However, in i m p l e m e n t i n g the MCA in O c tober 1980,
the Board d e f e r r e d for six months, until M a y 1981, reserve and deposit
reporting r e q u i r e m e n t s of n o n member d e p o s i t o r y i n s titutions that had less
than $2 m i l l i o n in total deposits as of December 31, 1 9 7 9 . 2 / The
d eferral was g r a n t e d on the basis that imm e d i a t e l y requ i r i n g such
1/ The deferral was not applicable to member banks, Edge or Agreement
corporations, or U.S. branches and agencies of foreign banks.
[Ref. Cir. No, 9414]
http://fraser.stlouisfed.org/
Federal Reserve Bank
____of St. Louis
-
2
-
i n s t i t u t i o n s to s u bmit r e ports and m a i n t a i n reserves m i g h t have caused
s i g n i f i c a n t o p e r a t i o n a l d i f f i c u l t i e s for the System and would have
i n t e r f e r e d w i t h the o r d e r l y i m p l e m e n t a t i o n of the MCA.
Reserve
r e q u i r e m e n t s on such i n s t itutions were deferred for three add i t i o n a l
six - m o n t h p e r i o d s bec a u s e of p e n d i n g C o n g r e s s i o n a l c o n s i d e r a t i o n of
w h ether a p e r m a n e n t e x e m p t i o n from reserve requirements should be granted
to smaller d e p o s i t o r y institutions.
S e c t i o n 411 of the G a r n - S t G e r m a i n Act, which was e nacted on
October 15, 1982, p r o v i d e s that $2 m i l l i o n of reservable liabilities.?./
of each d e p o s i t o r y i n s t i t u t i o n shall be subject to a zero per c e n t reserve
r equirement.
The B o a r d is to adjust the amount of reservable l i a b i l i t i e s
su b j e c t to this zero p e r c e n t reserve r e q u i r e m e n t each year for the next
s u c c e e d i n g c a l e n d a r year by 80 p e r c e n t of the per c e n t a g e increase in the
total r e s e r v a b l e l i a b i l i t i e s of all d e p o s i t o r y institutions, m e a s u r e d on
an annual bas i s as of June 30.
No c o r r e s p o n d i n g adjustment is to be made
in the event of a d e c r e a s e in total r e s ervable liabilities of all
d e p o s i t o r y instit u t i o n s .
The G a r n - S t G e r m a i n Act permits each d e p o s i t o r y
institution, in a c c o r d a n c e with the rules and regulations of the Board,
to d e s i g n a t e the r e s e r v a b l e l i a b i l i t i e s to w h ich this reserve r e quirement
e x e m p t i o n is to apply.
However, if t r a n s a c t i o n accounts are designated,
o n l y those t hat w o u l d o t h e r w i s e be s u b j e c t to a three per c e n t reserve
requirement
(i . e . , t r a n s a c t i o n a c c o u n t s wit h i n the low reserve
r e q u i r e m e n t tranche) m a y be so d e s i g nated.
As a result, the eff e c t of
this a m e n d m e n t is to m o d i f y the low re s e r v e tranche (which is c u r r e n t l y
$26 million) to a p p l y a zero p e r c e n t reserve r e quirement on the first $2
m i l l i o n of t r a n s a c t i o n aco u n t s and a 3 p e r c e n t reserve req u i r e m e n t on the
r e m a inder of the l ow reserve tranche, or to provide a zero pe r c e n t
r e serve r e q u i r e m e n t t r anche on n o n p e r s o n a l time deposits with m a t u r i t i e s
of less than 3-1/2 y e a r s or E u r o c u r r e n c y liabilities, both of w h ich are
s u b j e c t to a res e r v e r e q u i r e m e n t r a tio of three percent.
The legislative
h i s t o r y of the G a r n - S t Ger m a i n Act i n dicates that the Board has 60 days
to imp l e m e n t this p r o v i s i o n (H. R. Rep. No. 775, 97th Cong., 2nd Sess. 5
(1982)).
The B o a r d has amended R e g u l a t i o n D to implement the e x e m p t i o n
from r e serve r e q u i r e m e n t s p r o v i d e d by the G arn-St Germain Act.
W h i l e the
G a r n - S t G e r m a i n A c t p r o v i d e s that i n s t i t u t i o n s m a y d e s i g n a t e the
l i a b i l i t i e s a g a i n s t w h i c h the e x e m p t i o n will be applied, the Board has
a d o p t e d a p r o c e d u r e for a l l o c a ting the e x e m p t i o n that will facilitate the
o p e r a t i o n s of the R e s e r v e Banks and p r e c l u d e the need for an a d d itional
r e p o r t from d e p o s i t o r y i n s t i t utions to desi g n a t e allo c a t i o n of the
e x e mption.
T he Bo a r d will use these p r o c e d u r e s since the choice of
l i a b i l i t i e s w i l l not a f f e c t the amou n t of reserve requir e m e n t s of a
d e p o s i t o r y i n stitution.
However, should reserve requirements be changed
2/
The Act d e f i n e s r e s e r v a b l e l i a b i l i t i e s
n o n p e r s o n a l time deposits, and E u r o c u r r e n c y
s e c t i o n 19(b)(5) of the F e d e r a l R e s e r v e Act.
as transaction accounts,
liabilities as d e fined in
-3-
in the future such that n o n p e r s o n a l time d e p osits or E u r o c u r r e n c y
l i a b i lities had a higher r e serve re q u i r e m e n t , the Board w o u l d reconsider
the order of a l l o c a t i n g the exemption.
Under the Boa r d ' s action, the F e deral Reserve B a n k s will
c a l c u l a t e a d e p o s i t o r y i n s t i t u t i o n ' s r e s e r v e r e q u irements taking into
account the $2 m i l l i o n of r e s e r v a b l e l i a b i l i t i e s that are s u bject to a
zero per c e n t re s e r v e requirement.
The e x e m p t i o n will be app l i e d first to
transa c t i o n a c c o u n t s and then to o t her types of reservable liabilities.
The amount of the e x e m p t i o n a p plied to total t r ansaction accou n t s will be
s u b tracted f rom a d e p o s i t o r y i n s t i t u t i o n ' s low reserve r e q u i r e m e n t
tranche.
The e x e m p t i o n will be a p p l i e d to r e s e rvable l i a b i l i t i e s as
follows:
For inst i t u t i o n s
NOW accounts
that
are
not
N e t N O W a c c o u nts
deductions)
2.
Ne t other t r a n s a c t i o n a c c o u n t s (other
a c c o u n t s less a l l o w a b l e deductions)
3.
N o n p e r s o n a l time
and
s a v i n g s d e p osits
m a t u r i t i e s of less than 3-1/2 years
4.
E u r o c u r r e n c y l ia b i l i t i e s
that
are
accounts
a phase-in
1.
For i n s t i t u t i o n s
accounts
(NOW
a l lowed
allowed
less
on
a l lowable
transa c t i o n
a phase-in
1.
N et t r a n s a c t i o n accou n t s
2.
N o n p e r s o n a l time
and
s a v i n g s deposits
m a t u r i t i e s of less than 3-1/2 years
3.
E u r o c u r r e n c y l ia b i l i t i e s
with
on
NOW
with
A s i n g l e d e p o s i t o r y i n s t i t u t i o n will be allowed on l y one $2
m i l l i o n e x e m p t i o n from reserve requi r e m e n t s .
Thus, for d e p o s i t o r y
i n s t itutions w i t h o f f i c e s in m o r e than one state or in more than one
F e d e r a l R e s e r v e District, an a l l o c a t i o n of the exemp t i o n will be
required.
Initially, the Reserve B a n k s w i l l allocate the $2 m i l l i o n
e x e m p t i o n in the same p r o p o r t i o n that the low reserve tranche for
t r a n s a c t i o n a c c o u n t s has been a l l o c a t e d by a depo s i t o r y institution, an
Edge or A g r e e m e n t c orporation, or a f o r e i g n bank's U.S. br a n c h e s or
agencies.
B e g i n n i n g in 1983, such i n s t i t u t i o n s will be p e r m i t t e d to
d e s i g n a t e the s p e c i f i c o f fices to w h i c h the exemp t i o n will apply.
The
a m o u n t of e x e m p t i o n a l l o c a t e d to a p a r t i c u l a r office ma y not exceed the
a m o u n t of the low reserve tranche that is alloc a t e d to that office.
-4The G a r n - S t Ger m a i n Act also p r o v i d e s that the B o ard shall issue
a r e g u l a t i o n b e f o r e December 31 of each year, b e ginning in 1982,
adj u s t i n g for the next calendar year the dollar amount of r e s e rvable
l i a b i l i t ie s e x e m p t from reserve requi r e m e n t s .
The change in the amount
is to be m a d e o n l y if the total r e s e r v a b l e liabil i t i e s held at all
d e p o s i t o r y i n s t i t u t i o n s increases from one year to the next.
The
increase in the t r anche is to be 80 p e r c e n t of the p e r c e n t a g e increase in
total r e s e r v a b l e lia b i l i t i e s of all d e p o s i t o r y institutions d e t e r m i n e d as
of June 30 each year.
The g r owth in total rese r v a b l e l i a b i l i t i e s of all
d e p o s i t o r y i n s t i t u t i o n s from June 30, 1981 to June 30, 1982, was 4.33
percent.
In a c c o r d a n c e with this p r o v i s i o n of the G a rn-St G e r m a i n Act,
the Boa r d is also a m e n d i n g R e g u l a t i o n D to increase the amount of the
r eserve r e q u i r e m e n t e x e m p t i o n to $2.1 mi l l i o n .
In order to aid Fe d e r a l
R e s e r v e B a n k s in the t r a n s i t i on to the n e w exemption, this increased
amou n t will a p p l y w ith the i m p l e m e n t a t i o n of the reserve r e q u i r e m e n t
exemption.
This a m e n d m e n t will be e f f e c t i v e for the reserve c o m p u t a t i o n
p e r i o d that b e g i n s on December 9, 1982.
For a d e p o s i t o r y ins t i t u t i o n
that r eports d e p o s i t s and m a i n t a i n s r e s e r v e s on a q u a r t e r l y basis,
res e r v e r e q u i r e m e n t s will be reduced for the reserve m a i n t e n a n c e week
that begins on D e c e m b e r 23, 1982,
r e g a r d l e s s of wh e n such an
i n s t i t u t i o n ' s m o s t rece n t reserve c o m p u t a t i o n period occurred.
In
addition, all e n t i t i e s c u r r e n t l y s u b m i t t i n g F o r m FR 2900 will co n t i n u e to
s u bmit rep o r t s
to the Fed e r al R e s e r v e under c u rrent r e porting
proced u r e s .
The Boa r d will be c o n s i d e r i n g revised reporting p r o c e d u r e s
in the near future.
The p r o v i s i o n s of 5 U.S.C. S 553(b) relating to not i c e and
p u b l i c p a r t i c i p a t i o n have not been f o l l o w e d in c o n n e c t i o n with adoption
of this a m e n d m e n t b e cause the change involves the i m p l e m e n t a t i o n of a
s t a t u t o r y p r o v i s i o n that is e f fec t i v e w i t h i n 60 days of enactment.
Thus,
the Boa r d has d e t e r m i n e d that noti c e and p u b l i c p a r t i c i p a t i o n is
u n n e c e s s a r y in c o n n e c t i o n w ith this action.
The e f fective date of the
a m e n d m e n t has not been d e f e r r e d p u r s u a n t to 5 U.S.C. S 553(d), since the
Boa r d ' s ac t i o n r e l i e v e s a r e s t r i c t i o n by reducing reserve re q u i r e m e n t s of
d e p o s i t o r y institu t i o n s .
List of S u b j e c t s in 12 C F R Part 204
Banks, banking;
Reporting requirements.
Currency;
Federal
Reserve
System;
Penalties;
P u r s u a n t to its a u t h o r i t y under sec t i o n 411 of the G a rn-St
G e r m a i n D e p o s i t o r y Inst i t u t i o n s Act of 1982 (P.L. 97-320; 96 Stat. 1520;
to be c o d i f i e d at 12 U.S.C. § 4 6 1 ( b ) (11)), the Board amends R e g u l a t i o n D
(12 C FR Part 204) eff e c t i v e D ecember 9, 1982, as follows: 1
1.
In p a r a g r a p h (a) of section
to read as follows:
204.3,
by adding a new s u b p a r a g r a p h
(3)
-5-
SECT10N 204.3— COMPUTATION AND MAINTENANCE
*
*
*
*
*
(3)
A l l o c a t i o n of exemp t i o n from reserve requirements.
In de t e r m i n i n g the reserve r e q u i rements of a depo s i t o r y institution, the
exe m p t i o n p r o v i d e d for in s e ction 204.9(a) shall apply in the following
order of p r i o r ities:
(A) first, to net t r a n s action accounts that are
first a u t h o r i z e d by f e deral law in any state after April 1, 1580, (B)
second, to other net t r a n s a c t i o n accounts; and (C) third, to n o n p e r s o n a l
time d eposits or E u r o c u r r e n c y l iabil i t i e s starting with those with the
highest reserve ratio under s e ction 204.9(a) and then to succeeding lower
reserve ratios.
(ii)
A d e p o s i t o r y institution, United States branc h e s and
agencies of the same foreign bank, or an Edge or A g r e e m e n t c o r p o r a t i o n
shall, if possible, assi g n the reserve r e q u i r e m e n t e x emption of section
204.5 (a) to only one o f f i c e or to a g r o u p of off i c e s filing a single
aggre g a t e d report of deposits.
If the reserve requirement e x e m p t i o n
cannot be fully u t i l i z e d by a single o f f i c e or by a group of off i c e s
filing a single report of deposits, the unused p o rtion of the e x e m p t i o n
may be a s s i g n e d to ether o f f i c e s of the same institution until the amount
of the e x e m p t i o n or r e s e r v a b l e l i a b i lities is exhausted.
A depository
institution, f oreign bank, or Edge or A g r e e m e n t c o r p o r a t i o n shall
d e t e r m i n e this a s s i g n m e n t s ubject to the r e s t r i c t i o n that if a por t i o n of
the exe m p t i o n is a s s i g n e d to an office in a p a r t icular state, any unused
p o rtion must first be assig n e d to other o f f i c e s located with i n the same
state and w i t h i n the same F ederal Reserve District, that is, to other
o f fices included on the same a g g regated report of deposits.
The
exe m p t i o n may be r e a l l o c a t e d at the begi n n i n g of a calendar year, or, if
nec e s s a r y to avoid u n d e r u t i l i z a t i o n of the exemption, at the b e ginning of
a calendar month.
The amount of the reserve r e q u i r e m e n t e x e m p t i o n
allocated to an o f f i c e or g r o u p of o f fices may not exceed the amount of
the low reserve t r anche a l l o c a t e d to such office or o f fices under this
paragraph.
*
2.
In
section
*
204.9,
*
by
*
revising
*
paragraph
(a)
to
read
as
follows:
S B C l I O N 2 0 4 . 5 - - R ESERVE R E Q U I REMENT RATIOS
is; (1)
R e serve p e r c e n t a g e s . The following reserve ratios are
p r e s c r i b e d for all d e p o s i t o r y
institutions,
Edge
and A g r e e m e n t
c o r p o r a t i o n s and Unit e d S t ates branc h e s and agencies of foreign banks:
*
*
*
(2)
E x e m p t i o n from reserve r e q u i r e m e n t s ,
Each depo s i t o r y
inst i tut ion, Edge or A g r e e m e n t corporation, and U.S. branch or agency of
c for eig n bank is sub j e c t to a zero per cent reserve r e quirement on an
(i)
-6-
a m o u n t of its t r a n s a c t i o n accounts su b j e c t to the low reserve tranche in
p a r a g r a p h ( a ) (1), n o n p e r s o n a l time deposits, or E u r o c u r r e n c y liabil i t i e s
or any c o m b i n a t i o n the r e o f not in exce s s of $2.1 mil l i o n d e t e r m i n e d in
a c c o r d a nc e w i t h sec t i o n 204.3(a)(3) of this Part.
*
*
*
*
*
By order of the Board of G o v ernors, December 1, 1982.
(signed)
W i l l i a m W. W i l e s
W i l l i a m W. W i l e s
S e c r e t a r y of the B o a r d
[SEAL]
FEDERAL RESERVE SYSTEM
[12 CF R Part 204]
Regulation D
[Docket No. R-0440]
R E S E R V E R E Q U I R E M E N T S OF D E P O S I T O R Y I N S TITUTIONS
M o n e y M ar k e t D e p o s i t A c c o u n t
AGENCY:
Board of G o v e r n o r s of the Fe d e r a l Re s e r v e System.
ACTION:
Final rule.
SUMMARY:
The Board of G o v e r n o r s has a m e n d e d R e g u l a t i o n D — R e s e r v e
R e q u i r e m e n t s of D e p o s i t o r y I nstit u t i o n s (12 C F R Part 204) to e s t a b l i s h
reserve r e q u i r e m e n t s on the m oney m a r k e t d e p o s i t account ("MMDA"), w h ich
was e s t a b l i s h e d by the D e p o s i t o r y I n s t i t u t i o n s De r e g u l a t i o n C o m m i t t e e
("DIDC"), e f f e c t i v e D e c e m b e r 14, 1982.
The B o ard has dete r m i n e d that the
same reserve r e q u i r e m e n t s that apply to s a vings d e p osits will a p ply to an
M M D A that does not p e r m i t more than six internal or third party transfers
or p a y m e n t s per m o n t h (no more three of w h i c h m a y be checks under DIDC
rules).
Such an M M D A in w h i c h the entire b e n e f i c i a l interest is held by
a n a tural p e r s o n or nat u r a l p ersons and w h i c h is n o n t r a n s f e r a b l e will be
rega r d e d as a p e r s o n a l sav i n g s deposit, w h i c h is not subject to reserve
requirements; such an M M D A that is trans f e r a b l e , or in w h ich any
b e n e f i c i a l i nterest is held by other than a nat u r a l person will be
rega r d e d as a n o n p e r s o n a l time d e posit w i t h a m a t u r i t y of less than 3-1/2
y e a r s and sub j e c t to a r e serve r e q u i r e m e n t of three percent.
An MM D A
that p ermits the d e p o sitor m o n t h l y to make m o r e than six a u tomatic or
p r e a u t h o r i z e d tra n s f e r s or third p a r t y payments, including t e lephone
t r a nsfers to another acc o u n t of the d e p o s i t o r at the same i n stitution
w i l l be subject to t r a n s a c t i o n account r e s e r v e requirements.
This action
was taken in order to e s t a b l i s h a r e serve r e q u i r e m e n t on the M M D A
r e c e n t l y a u t h o r i z e d by the DIDC.
E F F E C T I V E DATE:
Dece m b e r 14, 1982.
F O R F U R T H E R I N F O R M A T I O N CONTACT:
G i l b e r t T. Schwartz, Asso c i a t e General
Counsel
(202/452-3625),
or
Paul
S.
Pilecki,
Senior
Attorney
(202/452-3281), Legal Division, Board of G o v e r n o r s of the Federal Reserve
System, Was h i n g t o n , D.C. 20551.
S U P P L E M E N T A R Y INFORMATION:
The D e p o s i t o r y In s t i t u t i o n s D e r e g u l a t i o n
C o m m i t t e e ("DIDC") has e s t a b lished a n ew d e p o s i t account that ma y be
o f f e r e d by f e d e r a l l y - i n s u r e d c o m m ercial banks,
savings and loan
a s s o ciations, and m u t u a l savings banks, as required by the Ga r n - S t
G e r m a i n D e p o s i t o r y I n s t i t u t i o n s Act of 1982 (Pub. L. 97-320) ("Garn-St
G e r m a i n Act").
The n ew m o n e y mark e t d e p o s i t account ("MMDA") has the
f o l l owing p r i n c i p a l c h a r a c t e r i s t i c s:
(1) an initial and average balance
r e q u i r e m e n t of no less than $2,500? (2) no m i n i m u m m a t u r i t y requirement,
but i n s t i t u t i o n s are r e q u i r e d to reserve the right to require at least
seven days' n o t i c e prior to withdrawal; (3) no interest rate c e iling on
d e p o s i t s that s a t i s f y the initial and average balance requirements; and
(4)
no m o r e than six p r e a u t ho r i z e d , a u t o m a t i c or other third party
tra n s f e r s per month, of w h i c h no more than three can be checks, and an
u n l i m i t e d number of t e l e p h o n e transfers from the MM D A to another account
of the dep o s i t o r at the same institution.
Institutions may offer the
M M D A to d e p o s i t o r s b e g i n n i n g December 14, 1982.
The G a r n - S t G e r m a i n A ct p r o vides that an account e s t a b l i s h e d
under that A ct that is not a "trans a c t i o n account" as defined by
R e g u l a t i o n D on A u g u s t 1, 1982, "shall not be subject to tra n s a c t i o n
a ccount r e s e rves, e v e n though no m i n i m u m m a t u r i t y is required, and even
thou g h up to three p r e a u t h o r i z e d or a u t o m a t i c transfers and three
t r a n s f e r s to third p a r t i e s are perm i t t e d month l y " (96 Stat. 1501).
Under
the DIDC ' s rules, d e p o s i t o r y i n s titutions m a y offer the MMDA with the
fol l o w i n g t r a n s a c t i o n s features:
(1) a m a x i m u m of six transfers per
m o n t h (or s t a t e m e n t cyc l e of at
least four weeks) from the M M D A to
a n other a c c o u n t of the d e p o s i t o r or to a third p a rty that are
p r e a u t h o r i z e d or a u t o m a t i c , but no more than three of these transfers ma y
be by check; (2) t e l e p h o n e t r ans f e r s to a third party or transfers to a
third pa rt y e f f e c t u a t e d th r o u gh a p o i n t - o f - s a l e terminal or an autom a t e d
teller m a c h i n e are r e g a r d e d as "preauth o r i z e d transfers" and are subject
to the m a x i m u m of six t r a n s f e r s per month; and (3) an unlimited number of
t r a n s f e r s by t e l e p h o n e from the M M D A to another account of the depositor
at the same i n s t itution.
The DID C ' s rules also allow institutions to
p e r m i t w i t h d r a w a l s not s u b j e c t to the limit of six per month in person,
by m e s s e n g e r , or by m a i l to the depositor d i r e c t l y in cash, by check, by
c r e d i t to another a c c o u n t of the depositor, or to a third party by cash,
check, or credit.
The D I D C has noted that it will reconsider at its
D e c e m b e r 6, 1982 m e e t i n g w h e t her u n l i m i t e d t e lephone transfers from the
M M D A to another a c c o u n t of the depositor should continue to be p e r m i t t e d
and it has a d v i s e d d e p o s i t o r y i n s t itutions of this possi b l e change.
The B o a r d has ame n d e d R e g u l a t i o n D to apply reserve r e q uirements
to M M D A s as follows: 1
1.
An M M D A will be subject to r e serve requirements
t r a n s a c t i o n a c c o u n t if it a u t h o r i z e s more than six transfers per m o nth
(or s t a t e m e n t cycle of at least four weeks) to another account of the
d e p o s i t o r at the same institution, to the i n stitution itself, or to a
third party by m e a n s of p r e a u t h o r i z e d , auto m a t i c or telephone agreement,
orde r , or i n s t r uction; or w i t h i n these transfers, the depositor is
p e r m i t t e d to d r a w m o r e than three checks or drafts per month.
An MM D A
that has the c a p a c i t y for t r a nsfers in excess of these limits will be
r e g a r d e d as a t r a n s a c t i o n a c c ount whether or not the depositor a c t u a l l y
as
a
-3-
e xceeds the limits.
However, an M M D A will not be regarded as a
" t r a n saction account" if an i nstit u t i o n follows the D I D C ’s p r o c e d u r e s in
12 C F R S 1204.122(e)(2) for limiting the number of transfers that m ay be
m a d e by an a c c o u n t h o l d e r .
(Depository ins t i t u t i o n s should not offer to
o p e n m u l t i p l e M M D A s for c u s t o m e r s in order to enable custo m e r s to have
the a bility to e f f e c t u a t e in aggre g a t e more than six transfers per month
from such accounts.
Each M M D A subject to such a r r a n g e m e n t s will be
r e g a r d e d as a t r a n s a c t i o n account.)
2.
An M M D A w ill be subject to reserve re q u i r e m e n t s as a
non p e r s o n a l time d e posit with a m a t u r i t y of less than 3-1/2 years, w h i c h
p r e s e n t l y have a res e r v e r e q u i r e m e n t of three p e r c e n t under the M o n e t a r y
C o n t r o l Act, if:
a. any b e n e f i c i al interest in the a ccount is held by a
depositor that is not a natural p e r s o n or the acc o u n t is
transferable; and
b. no m o r e than six t r ansfers per m o n t h (or s t a t e m e n t cycle
of at least four weeks) to another ac c o u n t of the d e positor at
the same d e p o s i t o r y institution, to the i n s t i tution itself, or
to a third p a r t y by m e ans of a p r e a u t h o r i z e d , a u t o m a t i c or
telephone a g r e e m e n t order or instruction, and no more than three
of such six t r a n s f e r s ma y be by che c k s or drafts drawn by the
depositor.
3.
An M M D A will be regarded as a pe r s o n a l time de p o s i t not
s u b j e c t to basic reserve r e q u i r e m e n t s under the M o n e t a r y Control Act if:
a.
the entire b e n e f i c i a l interest in the account
a natural p e r s o n or natural persons;
is held by
b the a c c o u n t is n o n t r a n s f e r a b l e ; and
c. no m o r e than six trans f e r s per m onth (or state m e n t c y cle
of at least four weeks) to another acc o u n t of the d e positor at
the same d e p o s i t o r y institution, to the i n s t i tution itself, or
to a third p a r t y by m e ans of a p r e a u t h o r i z e d , a u t o m a t i c or
t e l ephone a g r e e m e n t order or instruction, and no more than three
of such six tra n s f e r s m a y be by checks or drafts drawn by the
depositor.
For member banks and i n s t i t u t ions m a i n t a i n i n g reserves in the same manner
as member banks, M M D A s will be regar d e d as savings d e p o s i t s for p u r p o s e s
of applying the t r a n s i t i o n a l a d j u s t m e n t s of R e g u l a t i o n D.
Thus, MMDAs
issued by member banks that are pe r s o n a l time de p o s i t s will be s u bject to
a small reserve r e q u i r e m e n t until the c o m p l e t i o n of the p h a s e - i n p e r i o d
r e q u i r e d by the M o n e t a r y C o n t r ol Act.
-4 -
W i t h r e s p e c t t o t h e r e s e r v e r e q u i r e m e n t t r e a t m e n t o f MMDAs t h a t
p e r m i t t e l e p h o n e t r a n s f e r s b e y o n d s i x t r a n s f e r s p e r month, th e Board
b e l i e v e s t h a t t h e a b i l i t y t o make s u c h t r a n s f e r s i n c r e a s e s t h e p o t e n t i a l
f o r tt^DAs t o s u b s t i t u t e f o r t r a n s a c t i o n a c c o u n t s .
The c a p a c i t y f o r d a i l y
t r a n s f e r s t o a d e p o s i t o r ' s c h e c k i n g a c c o u n t makes t h e hMDA a much more
u s e f u l c a s h management d e v i c e .
The B o a r d b e l i e v e s t h a t r e g a r d i n g s u c h
a c c o u n t s as t r a n s a c t i o n a c c o u n t s i s f u l l y c o n s i s t e n t w ith the Garn-St
Germain A c t .
B e c a u s e c o m m e r c i a l b a n k s , m u t u a l s a v i n g s b a n k s , and s a v i n g s and
l o a n a s s o c i a t i o n s may o f f e r t h e KMDA a s o f D e c e m b e r 1 4 , 1 9 8 2 , t n e B o a r d
f i n d s t h a t t h e a p p l i c a t i o n o f t h e n o t i c e and p u b l i c p a r t i c i p a t i o n
p r o v i s i o n s o f 5 U . S . C . § 553 t o t h i s a c t i o n w o u l d b e c o n t r a r y t o t h e
p u b l i c i n t e r e s t and t h a t g o o d c a u s e e x i s t s
f o r m a ki n g t h i s a c t i o n
e f f e c t i v e December 1 4 , 1 9 8 2 .
L ist
of
Subjects
Reporting
in
12 CFR P a r t
Banks, b a n k in g ;
requirem ents.
204
Currency;
Federal
Reserve
System;
P en alties;
P u r s u a n t t o i t s a u t h o r i t y u nd e r s e c t i o n s 1 9 , 25 and 2 5 ( a ) o f t h e
F e d e r a l R e s e r v e A c t (12 U . S . C . § 461 , 601 ejt s e q . , 611 e_t s e q . ) , u nd e r
s e c t i o n 7 o f t h e I n t e r n a t i o n a l B a n k i n g A c t o f 1 9 7 8 ( 12 U . S . C . § 3 1 0 5 ) ,
and u n d e r s e c t i o n 327 o f t h e G a r n - S t Ger mai n D e p o s i t o r y I n s t i t u t i o n s A c t
o f 1 9 8 2 ( 12 U . S . C . § 3 5 0 3 ; 96 S t a t . 1 5 0 1 ) t h e B o a r d o f G o v e r n o r s amends
R e g u l a t i o n D, e f f e c t i v e D e c e m b e r 1 4 , 1 9 8 2 , b y r e v i s i n g p a r a g r a p h s ( b ) ( 2 ) ,
( d ) , and ( e ) o f s e c t i o n 2 0 4 . 2 t o r e a d a s f o l l o w s :
SECTION 2 0 4 . 2
*
( c )
*
*
( 2)
institu tion
on
the
*
—
*
DEFINITIONS
*
*
does
not
*
A "demand d e p o s i t "
include
c h e c k s o r d r a f t s dra wn by t h e
(i)
F e d e r a l R e s e r v e o r on a n o t h e r d e p o s i t o r y
depository
in stitu tion ;
(ii)
a d e p o s i t o r a c c o u n t i s s u e d p u r s u a n t t o 12 CFR
§ 1 20 4 . 1 2 1 , , i n c l u d i r . g t h o s e w i t h an o r i g i n a l m a t u r i t y o r r e q u i r e d n o t i c e
p e r io d of seven to 13 days;
(iii)
a d e p o s i t o r a c c o u n t i s s u e d p u r s u a n t t o 12
CFR § 1 20 4 , . 12 ;i u nd e r w h i c h t h e d e p o s i t o r y i n s t i t u t i o n r e s e r v e s t h e r i g h t
t o r e q u i r e a t l e a s t s e v e n d a y s ' n o t i c e o f an i n t e n d e d w i t h d r a w a l b e f o r e
wi t b d r a wa l i s made , i n c l u d i n g t h o s e w i t h an o r i g i n a l m a t u r i t y o r r e q u i r e d
n o t i c e p e r ]Lod o f o n e t o 13 d a y s ; o r
(iv)
r u l e s o f the D e p o s i t o r y I n s t i t u t i o n s
U . S . C . § 3501 et. s e q . ,
for
D eregulation
depository in s titu tio n s
C o m m i t t e e u nd e r 12
not
subject
to
(A) a d e p o s i t o r a c c o u n t i s s u e d w i t h an o r i g i n a l
m a t u r i t y o r r e q u i r e d n o t i c e p e r i o d o f s e v e n t o 13 a a y s i f s u c h d e p o s i t o r
a c c o u n t i s n o n n e g o t i a b l e , s u b g e c t t o a minimum b a l a n c e o f $ 2 0 , 0 0 0 , and
n o t o t h e r w i s e a t r a n s a c t i o n a c c o u n t u nd e r s e c t i o n 2 0 4 . 2 ( e ) o f t h i s P a r t ;
or
(B)
a d e p o s it or account
under
which
the
d e p o s i t o r y i n s t i t u t i o n r e s e r v e s the r i g h t t o r e q u i r e a t l e a s t seven d a y s '
n o t i c e o f an i n t e n d e d w i t h d r a w a l b e f o r e w i t h d r a w a l i s made, i n c l u d i n g
t h o s e w i t h an o r i g i n a l m a t u r i t y o r r e q u i r e d n o t i c e p e r i o d o f o n e t o 13
d a y s , and n o t o t h e r w i s e a t r a n s a c t i o n a c c o u n t u n d e r s e c t i o n 2 0 4 . 2 ( e ) o f
th is Part.
*
( q ) ( 1)
"Savings
*
d eposit"
*
*
*
means a d e p o s i t
or
account
(i)
(A) w i t h r e s p e c t t o w h i c h t h e d e p o s i t o r
r e q u i r e d by t h e d e p o s i t c o n t r a c t b u t may a t a ny t i m e b e r e q u i r e d b y t h e
d e p o s i t o r y i n s t i t u t i o n t o g i v e w r i t t e n n o t i c e o f an i n t e n d e d w i t h d r a w a l
n o t l e s s t h a n 14 d a y s b e f o r e w i t h d r a w a l i s m a d e , ana t h a t i s n o t p a y a b l e
on a s p e c i f i e d d a t e or a t the e x p i r a t i o n o f a s p e c i f i e d time a f t e r the
d a t e o f d e p o s i t ; and
(B) f o r d e p o s i t o r y i n s t i t u t i o n s s u b j e c t t o 12 CFR
F a r t 21? o r 12 CfR P a r t 3 2 S , f u n d s d e p o s i t e d t o t h e c r e d i t o f , o r i n
w h i c h any b e n e f i c i a l i n t e r e s t i s h e l d b y , a c o r p o r a t i o n , a s s o c i a t i o n ,
p a r t n e r s h ip or oth e r o r g a n i z a t i o n opera ted to r p r o f i t do not exceed
$ 1 5 0 ,0 0 0 per d e p o s i t o r a t the d e p o s i t o r y i n s t i t u t i o n ; o r
(ii)
i s s u e d p u r s u a n t t o 12 CFR § 1 2 0 4 . 1 2 2 u nd e r w h i c h
th e d e p o s i t o r y i n s t i t u t i o n r e s e r v e s the r i g h t t o r e q u i r e a t l e a s t seven
d a y s ' n o t i c e o f an i n t e n d e d w i t h d r a w a l b e f o r e w i t h d r a w a l i s ma de , o r f o r
d e p o s i t o r y i n s t i t u t i o n s n o t s u b j e c t t o the r u l e s o f th e D e p o s i t o r y
I n s t i t u t i o n s D e r e g u l a t i o n C o m m i t t e e u nd e r 12 U . S . C . S 350 1 et. s e q . , a
d e p o s i t o r a c c o u n t under w h ich th e d e p o s i t o r y i n s t i t u t i o n r e s e r v e s th e
r i g n t t o r e q u i r e a t l e a s t s e v e n d a y s ' n o t i c e o f an i n t e n d e d w i t h d r a w a l
b e f o r e w i t h d r a w a l i s ma de.
( 2)
A d e p o s i t may c o n t i n u e t o b e c l a s s i f i e d a s
d e p o s i t even i f the d e p o s i t o r y i n s t i t u t i o n e x e r c i s e s i t s r i g h t
n o t ic e o f withdrawal.
at
a credit
( 3)
union
a savings
to require
A "sa v in g s d e p o s it " in c lu d e s a re g u la r share account
and a r e g u l a r a c c o u n t a t a s a v i n g s and l o a n a s s o c i a t i o n .
is
not
-6( 4)
"S a v in g s d e p o s i t " d oes n ot i n c l u d e funds
t h e c r e d i t o f t h e d e p o s i t o r y i n s t i t u t i o n ' s own t r u s t d e p a r t m e n t w h e r e t h e
funds in v o lv e d are u t i l i z e d t o c o v e r ch e ck s or d r a f t s .
Such f u n d s a r e
"tran saction a ccou n ts."
deposited
(e)
(1)
" T r a n s a c t i o n a c c o u n t " means a d e p o s i t o r a c c o u n t
w h i c h t h e d e p o s i t o r o r a c c o u n t h o l d e r i s p e r m i t t e d t o make w i t h d r a w a l s b y
n e g o t i a b l e or t r a n s f e r a b l e i n s t r u m e n t / payment o r d e r s o f w i t h d r a w a l /
t e l e p h o n e t r a n s f e r s , o r o t h e r s i m i l a r d e v i c e f o r t h e p u r p o s e o f ma ki ng
payments or t r a n s f e r s t o t h i r d p e rs o n s or o t h e r s .
"Transaction account"
in clu d es:
(i)
negotiable
(ii)
order o f
to
on
demand d e p o s i t s ?
d e p o s it s or accounts
su bject
to check,
draft,
w ith d r a w a l, share d r a f t , or o th e r s im i la r item ;
(iii)
s a v in g s d e p o s i t s or a c c o u n t s in which w ith draw als
may be made a u t o m a t i c a l l y t h r o u g h p a y m e n t t o t h e d e p o s i t o r y i n s t i t u t i o n
i t s e l f o r t h r o u g h t r a n s f e r o f c r e d i t t o a demand d e p o s i t o r o t h e r a c c o u n t
i n o r d e r t o c o v e r c h e c k s o r d r a f t s drawn upon t h e i n s t i t u t i o n o r t o
m a i n t a i n a s p e c i f i e d b a l a n c e i n , o r t o make p e r i o d i c t r a n s f e r s t o , s u c h
accou n ts (autom atic tr a n s fe r a c c o u n t s ) ;
(iv)
d e p o s i t s o r a c c o u n t s i n w h i c h p a y m e n t s may be made t o
t h i r d p a r t i e s b y means o f an a u t o m a t e d t e l l e r m a c h i n e , r e m o t e s e r v i c e
u n it or other e l e c t r o n i c d ev ice?
third
parties
(v)
d e p o s it s or accou n ts
b y means o f a d e b i t c a r d ?
in
which
p a y m e n t s may be made
to
(vi)
e x c e p t as p r o v i d e d in s u bp arag ra p h ( 2 ) ,
a c c o u n t s under the terms o f w h i c h , or which by p r a c t i c e o f the d e p o s i t o r y
i n s t i t u t i o n , t h e d e p o s i t o r i s p e r m i t t e d o r a u t h o r i z e d t o make mor e t h a n
t h r e e w i t h d r a w a l s p e r month f o r p u r p o s e s o f t r a n s f e r r i n g f u n d s t o a n o t h e r
a c c o u n t or f o r
ma ki n g a p a y m e n t t o a t h i r d p a r t y b y means o f
p r e a u t h o r iz e d or telep h on e agreement, ord er or i n s t r u c t i o n .
An a c c o u n t
t h a t p e r m i t s o r a u t h o r i z e s more than t h r e e s uch w i t h d r a w a l s in a c a l e n d a r
month, or statem ent c y c l e (or s i m i l a r p e r i o d ) o f at l e a s t fou r weeks, i s
a " t r a n s a c t i o n a c c o u n t " w h e t h e r o r n o t mor e t h a n t h r e e s u c h w i t h d r a w a l s
a c t u a l l y a r e made d u r i n g s u c h p e r i o d .
A "preauthorized
transfer"
i n c l u d e s any a r r a n g e m e n t by t h e d e p o s i t o r y i n s t i t u t i o n t c pay a t h i r d
p a r t y f r o m t h e a c c o u n t o f a d e p o s i t o r u pon w r i t t e n o r o r a l i n s t r u c t i o n
( i n c l u d i n g an o r d e r r e c e i v e d t h r o u g h an a u t o m a t e d c l e a r i n g h o u s e ( A C H ) ) ,
o r a n y a r r a n g e m e n t by a d e p o s i t o r y i n s t i t u t i o n t o p a y a t h i r d p a r t y f r o m
t h e a c c o u n t o f t h e d e p o s i t o r a t a p r e d e t e r m i n e d t i m e o r on a f i x e d
schedule.
An a c c o u n t i s n o t a " t r a n s a c t i o n
account,"
u n de r t h i s
s u b p a r a g r a p h ( e ) ( 1 ) ( v i ) , by v i r t u e
o f an a r r a n g e m e n t t h a t p e r m i t s
w i t h d r a w a l s f o r t h e p u r p o s e o f r e p a y i n g l o a n s and a s s o c i a t e d e x p e n s e s a t
t h e same d e p o s i t o r y i n s t i t u t i o n ( a s o r i g i n a t o r o r s e r v i c e r ) ;
deposits
or
-7 (vii)
d e p o s it s or a ccou n ts m aintained in co n n e c tio n
an a r r a n g e m e n t t h a t p e r m i t s t h e d e p o s i t o r t o o b t a i n c r e d i t d i r e c t l y o r
i n d i r e c t l y through the drawing o f a n e g o t i a b l e or n o n n e g o t i a b le c h e c k ,
d r a f t , order or i n s t r u c t i o n or oth er s im i la r d e v ic e ( in c lu d in g telephone
o r e l e c t r o n i c o r d e r o r i n s t r u c t i o n ) on t h e i s s u i n g i n s t i t u t i o n t h a t c a n
b e u s e d f o r t h e p u r p o s e o f m a ki n g p a y m e n t s o r t r a n s f e r s t o t h i r d p e r s o n s
o r o t h e r s , or t o a d e p o s i t a c c o u n t o f the d e p o s i t o r .
D ep osits that are
s u b j e c t t o a r r a n g e m e n t s e s t a b l i s h e d b e f o r e O c t o b e r 5 , 1 9 8 2 , w i l l n o t be
r e g a r d e d as t r a n s a c t i o n a c c o u n t s
(A)
u n til
the d e p o s i t
issued
in
c o n n e c t i o n w i t h t h e l i n e o f c r e d i t i s e x t e n d e d , o r m a t u r e s and i s
r e n e w e d , o r (B) i f t h e d e p o s i t i s s u e d i n c o n n e c t i o n w i t h t h e l i n e o f
c r e d i t m a t u r e s and i s a u t o m a t i c a l l y r e n e w e d on o r b e f o r e De c ember 3 1 ,
1 5 8 2 ; and
(viii)
a d e p o s i t or account issu ed pursuant
§ 1204.122 (o r , fo r a d e p o s it o r y i n s t i t u t i o n th a t i s not s u b je c t t o the
r u l e s o f t h e D e p o s i t o r y I n s t i t u t i o n s D e r e g u l a t i o n C o m m i t t e e u nd e r 12
U . S . C . § 3501 ejt s e q . , a d e p o s i t o r a c c o u n t u n d e r w h i c h t h e d e p o s i t o r y
i n s t i t u t i o n r e s e r v e s t h e r i g h t t o r e q u i r e s e v e n d a y s ' n o t i c e o f an
i n t e n d e d w i t h d r a w a l p r i o r t o w i t h d r a w a l ) ana u n d e r t h e t e r m s o f w h i c h , o r
w h i c h by p r a c t i c e o f t h e d e p o s i t o r y
in stitu tion ,
the d e p o s it o r
is
p e r m i t t e e o r a u t h o r i z e d t o make mor e t h a n s i x t r a n s f e r s p e r c a l e n d a r
month, o r s t a t e m e n t c y c l e (o r s i m i l a r p e r i o d ) o f a t l e a s t f o u r weeks t o
a n o t h e r a c c o u n t o f t h e same d e p o s i t o r a t t h e same i n s t i t u t i o n , t o t h e
i n s t i t u t i o n i t s e l f o r t o a t h i r d p a r t y b y means o f p r e a u t h o r i z e d ,
a u to m a tic, or telep h on e agreement, o r d e r , or i n s t r u c t i o n o r , w ith in these
t r a n s f e r s , t o d r a w mor e t h a n t h r e e c h e c k s o r d r a f t s p e r c a l e n d a r month o r
s t a t e m e n t c y c l e (or s i m i l a r p e r i o d ) o f a t l e a s t f o u r w e e k s .
An a c c o u n t
t h a t a u t h o r i z e s t r a n s f e r s in e x c e s s o f t h e s e l i m i t s i s a t r a n s a c t i o n
a c c o u n t w h e t h e r o r n o t t h e d e p o s i t o r a c t u a l l y makes a n y t r a n s f e r s .
( 2)
N o t w i t h s t a n d i n g s u b p a r a g r a p h s ( 1) ( i i ) , (1) ( i i i ) ,
( 1) ( i v ) ,
and (1) ( v) o f t h i s p a r a g r a p h , a " t r a n s a c t i o n a c c o u n t " d o e s n o t i n c l u d e a
d e p o s i t o r a c c o u n t i s s u e d p u r s u a n t t o 12 CFR S 1 2 0 4 . 1 2 2
(or, for a
d e p o s i t o r y i n s t i t u t i o n t h a t i s n o t s u b j e c t t o th e r u l e s o f the D e p o s i t o r y
I n s t i t u t i o n s D e r e g u l a t i o n C o m m i t t e e u n d e r 12 U . S . C . § 350 1 et. s e q . , a
d e p o s i t o r a c c o u n t under w h ich t h e d e p o s i t o r y i n s t i t u t i o n r e s e r v e s t h e
r i g h t t o r e q u i r e s e v e n d a y s ' n o t i c e o f an i n t e n d e d w i t h d r a w a l p r i o r t o
w i t h d r a w a l ) under th e te rm s o f w h ich th e d e p o s i t o r i s n o t p e r m i t t e d o r
a u t h o r i z e d t o make mor e t h a n s i x t r a n s f e r s p e r c a l e n d a r rn.onth, o r
s t a t e m e n t c y c l e (or s i m i l a r p e r i o d ) o f a t l e a s t f o u r w e e k s , t o a n o t h e r
a c c o u n t o f t h e d e p o s i t o r a t t h e same i n s t i t u t i o n , t o t h e i n s t i t u t i o n
i t s e l f , o r t o a t h i r d p a r t y b y means o f p r e a u t h o r i z e d , a u t o m a t i c o r
t e l e p h o n e a g r e e m e n t , o r d e r , o r i n s t r u c t i o n and n o mor e t h a n t h r e e o f s u c h
s i x t r a n s f e r s may be b y c h e c k s o r d r a f t s d ra wn by t h e d e p o s i t o r .
*
By o r d e r
of
the
*
Board o f
*
*
G o v e r n o r s , December
(signed)
[SEAL]
*
1,
1962.
W i l l i a m K.
W iles
W i l l i a m W. W i l e s
S e c r e t a r y o f th e Board
to
12
with
CFR
FEDERAL RESERVE SYSTEM
R egulation
D
[ 12 CFR PART 2 0 4 ]
[ D o c k e t No.
R-0439]
RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS
Reserve
AGENCY:
Board o f
ACTION:
Final
Governors
of
Requirement R a tio s
the
Federal
Reserve
System.
rule.
SUMMARY:
The B o a r d i s a m e n di n g R e g u l a t i o n D— R e s e r v e R e q u i r e m e n t s o f
D e p o s i t o r y I n s t i t u t i o n s ( 12 CFR P a r t 2 0 4 ) - - t o a d j u s t t h e d o l l a r amount
of t r a n s a c t io n a ccou n ts s u b je c t to a reserve requirem ent r a t i o o f 3
p e r c e n t f o r d e p o s i t o r y i n s t i t u t i o n s , Edge and A g r e e m e n t C o r p o r a t i o n s
and U n i t e d S t a t e s b r a n c h e s and a g e n c i e s o f f o r e i g n b a n k s , a s r e q u i r e d
Dy t h e M o n e t a r y C o n t r o l A c t o f 1 9 8 0 ( T i t l e I o f P u b . L. 9 6 - 2 2 1 ) .
Under t h e a m e nd me n t, t h e f i r s t $ 2 6 . 3 m i l l i o n o f an i n s t i t u t i o n ' s n e t
t r a n s a c t i o n a c c o u n t s w i l l be s u b j e c t t o a 3 p er c e n t r e s e r v e r a t i o ,
and a m o u n t s i n e x c e s s o f $ 2 6 . 3 m i l l i o n w i l l b e s u b j e c t t o a 12 p e r
cent reserve r a t io .
P r e s e n t l y , o n l y t h e f i r s t $ 26 m i l l i o n o f a
d e p o s it o r y i n s t i t u t i o n ' s net tr a n s a c t io n accou n ts are s u b je c t to a 3
per c e n t r e s e r v e r a t i o .
EFFECTIVE DATE:
D ec e mb e r 3 0 , 1 9 6 2 .
p e r i o d t o w h i c h t h e amendment a p p l i e s
The f i r s t r e s e r v e m a i n t e n a n c e
commences J a n u a r y 1 3 , 1 9 8 2 .
FOR FURTHER INFORMATION CONTACT :
G i l b e r t T. S c h w a r t z , A s s o c i a t e
Senior Attorney
General Counsel
( 2 0 2 / 4 5 2 - 3 6 2 5 ) , Paul S. P i l e c k i ,
Belcam ino,
Legal
A ssistant
(202/452-3261)
or
Beverly
A.
( 2 0 2 / 4 5 2 - 3 6 2 3 ) , L e g a l D i v i s i o n , Board o f G o v e r n o r s o f the F e d e r a l
R e s e r v e S y s t e m , W a s h i n g t o n , D. C. 2 0 5 5 1 .
SUPPLEMENTARY INFORMATION:
The M o n e t a r y C o n t r o l A c t o f 1 9 8 0 ( T i t l e 1
o f P u b . L. 9 6 - 2 2 1 )
("MCA") r e q u i r e s e a c h d e p o s i t o r y i n s t i t u t i o n t o
m aintain with
th e F e d e r a l R e s e r v e System r e s e r v e s
against
its
t r a n s a c t i o n a c c o u n t s and n o n p e r s o n a l t i m e d e p o s i t s , a s p r e s c r i b e d by
Board r e g u l a t i o n s .
Tne i n i t i a l r e s e r v e r e q u i r e m e n t s i m p o s e d u n de r t h e
MCA w e r e s e t a t 3 p e r c e n t f o r
each d e p o s it o r y
in s titu tio n 's
t r a n s a c t i o n a c c o u n t s o f $ 25 m i l l i o n o r l e s s and a t 12 p e r c e n t on
t r a n s a c t i o n a c c o u n t s a bove $25 m i l l i o n , which th e Board i s a u t h o r i z e d
t o v a r y b e t w e e n 8 and 14 p e r c e n t .
The MCA f u r t h e r p r o v i d e s t h a t t h e
B o a r d s h a l l i s s u e a r e g u l a t i o n b e f o r e De c embe r 31 o f e a c h y e a r ,
b e g i n n i n g in 1 9 6 1 , a d j u s t i n g f o r the n ext c a l e n d a r y e a r the t o t a l
dollar
a mount o f
the t r a n s a c t i o n
a c c o u n t tr a n c h e a g a i n s t which
r e s e r v e s mu s t b e m a i n t a i n e d a t a r a t i o o f 3 p e r c e n t .
The i n c r e a s e i n
-2 -
t h e t r a n c h e i s t o be 80
t r an s a c t i o n a c c o u n t s f o r
June 30 o f e a c h y e a r .
At p r e s e n t , t h e
1S $26
m i l l ion .
Tfcie g r o w t h i n
a ll
d e p o s i t o r y i n s t i t u t i o n s f r o m J un e 3 0 , 1 5 8 1 , t o J un e 3 0 , 1 5 8 2 , was 1 . 6 3
per c e n t .
In a c c o r d a n c e w i t h t h e s e p r o v i s i o n s o f t h e MCA, t h e B o a r d
i s a m e n d i n g R e g u l a t i o n D t o i n c r e a s e t h e amount o f t h e l o w r e s e r v e
t r a n c h e f o r t r a n s a c t i o n a c c o u n t s f o r 1 58 3 t o $ 2 6 . 3 m i l l i o n .
The p r o v i s i o n s o f 5 U . S . C . § 5 5 3 ( b ) r e l a t i n g t o n o t i c e and
p u b l i c p a r t i c i p a t i o n have n o t been f o l l o w e d in c o n n e c t i o n w ith the
adoption o f
this
amendment b e c a u s e
the
amendment
involves
an
a d j u s t m e n t p r e s c r i b e d by s t a t u t e .
Th u s ,
the Board b e l i e v e s t h a t
n o t i c e and p u b l i c p a r t i c i p a t i o n i s u n n e c e s s a r y and c o n t r a r y t o t h e
p ublic in te re s t.
List
of
Subjects
in
12 CFR F a r t
204
\
Banks, banking;
Reporting requirem ents.
Currency;
Federal
Reserve
System;
P en alties;
E ffective
D ec e mb e r
30,
1582,
pursuant
to
the
B oard's
a u t h o r i t y u n d e r s e c t i o n 15 o f t h e F e d e r a l R e s e r v e A c t , 12 U . S . C . S 4 61
e t £ e g . , s e c t i o n 2 0 4 . 5 o f R e g u l a t i o n D ( 12 CFR P a r t 2 04 ) i s amended by
r e v i s i n g p a r a g r a p h ( a ) ( 1 ) t o read as f o l l o w s :
SECTION 2 0 4 . 5
—
RESERVE REQUIREMENT RATIOS
( a) ( 1)
Reserve p e r c e n t a g e s .
The f o l l o w i n g r e s e r v e r a t i o s
a r e p r e s c r i b e d f o r a l l d e p o s i t o r y i n s t i t u t i o n s , Edge and A g r e e m e n t
C o r p o r a t i o n s and U n i t e d S t a t e s b r a n c h e s and a g e n c i e s o f
foreign
banks:
Category
Net T r a n s a c t i o n
$0 Over
$26.3
$26.3
Nonpersonal
Reserve
Accounts
m illion
m illion
3% o f amount
$785,000 p lu s
amount o v e r
m illion
Time D e p o s i t s
By o r i g i n a l m a t u r i t y
( o r n o t i c e p e r 10a ) :
l e s s than 3 - 1 / 2 y e a r s
3 - 1 / 2 y e a r s o r more
Requirement
3%
0%
12% o f
$26.3
-3 Eurocurrency Liabilities
*
By o r d e r
of
the
3%
*
Board o f
*
*
*
Governors,
December
(signed)
1,
1582.
W i l l i a m W. W i l e s
W i l l i a m W. W i l e s
S e c r e t a r y o f the Board
-
[SEAL]
FEDERAL RESERVE SYSTEM
R egulation Q
[ 1 2 CFR P a r t
[ D o c k e t No .
217]
R-0438]
INTEREST ON DEPOSITS
D epositors
AGENCY:
Board o f
ACTION:
Final
E ligible
Governors
of
t o M a i n t a i n NOW A c c o u n t s
the F e d e r a l R e s e r v e
System.
rules.
SUMMARY:
The B o a r d o f G o v e r n o r s h as amended R e g u l a t i o n Q— I n t e r e s t
o n D e p o s i t s ( 12 CFR P a r t 2 17 ) t o p r o v i d e t h a t a l l g o v e r n m e n t a l u n i t s
a r e e l i g i b l e t o m a i n t a i n NOW a c c o u n t s a t member b a n k s .
This a c t io n
c o n f o r m s R e g u l a t i o n Q w ith p r o v i s i o n s o f the G a r n - S t Germain D e p o s i t o r y
I n s t i t u t i o n s A c t o f 198 2 ( P. L. 9 7 - 3 2 0 , 96 S t a t . 1 4 6 9 ) .
EFFECTIVE DATE:
October
15,
1982.
FOR FURTHER INFORMATION CONTACT:
G i l b e r t T. S c h w a r t z , A s s o c i a t e G e n e r a l
C o u n s e l ( 2 0 2 / 4 5 2 - 3 6 2 5 ) , Paul S. P i l e c k i , S e n i o r A t t o r n e y ( 2 0 2 / 4 5 2 - 3 2 8 1 ) ,
o r B e v e r l y A. B e l c a m i n o , L e g a l A s s i s t a n t ( 2 0 2 / 4 5 2 - 3 6 2 3 ) , L e g a l D i v i s i o n ,
B o a r d o f G o v e r n o r s o f t h e F e d e r a l R e s e r v e S y s t e m , W a s h i n g t o n , D. C .
20551.
SUPPLEMENTARY INFORMATION:
The Consumer C h e c k i n g A c c o u n t E q u i t y A c t
o f 198 0 ( T i t l e I I I o f P u b . L. 9 6 - 2 2 1 ) ( " A c t " ) a u t h o r i z e d d e p o s i t o r y
i n s t i t u t i o n s n a t i o n w i d e , e f f e c t i v e December 3 1 , 1 9 8 0 , t o p e r m i t th e
o w n e r o f a d e p o s i t o r a c c o u n t on w h i c h i n t e r e s t o r d i v i d e n d s a r e p a i d
t o make w i t h d r a w a l s b y n e g o t i a b l e o r t r a n s f e r a b l e i n s t r u m e n t s f o r t h e
p u r p o s e o f ma ki n g t r a n s f e r s t o t h i r d p a r t i e s ("NOW a c c o u n t s " ) ( 12 U . S . C .
§ 1832(a)(1)).
Under t h i s s t a t u t e , NOW a c c o u n t s w e r e a v a i l a b l e o n l y
t o i n d i v i d u a l s and c e r t a i n o r g a n i z a t i o n s o p e r a t e d p r i m a r i l y f o r r e l i g i o u s ,
c h a r i t a b l e , p h i l a n t h r o p i c , e d u c a t i o n a l and o t h e r s i m i l a r p u r p o s e s and
not for p r o f it .
On S e p t e m b e r 1 6 , 1 9 8 1 , t h e B o a r d a d o p t e d an i n t e r p r e t a
t i o n t o c l a r i f y the r u le s co n c e rn in g the c l a s s o f d e p o s i t o r s e l i g i b l e
t o m a i n t a i n NOW a c c o u n t s ( 12 CFR § 2 1 7 . 1 5 7 ) .
This i n t e r p r e t a t io n p ro v id e s
t h a t g o v e r n m e n t a l u n i t s g e n e r a l l y a r e n o t p e r m i t t e d t o m a i n t a i n NOW
accounts.
S e c t i o n 706 o f t h e G a r n - S t G e r m a i n D e p o s i t o r y I n s t i t u t i o n s
A c t o f 1 9 8 2 ( P. L. 9 7 - 3 2 0 , 96 S t a t . 1 4 6 9 ) ( " G a r n - S t G e r m a i n A c t " ) , w h i c h
was e n a c t e d o n O c t o b e r 1 5 , 1 9 8 2 , p r o v i d e s t h a t " d e p o s i t s o f p u b l i c f u n d s
b y an o f f i c e r , e m p l o y e e , o r a g e n t o f t h e U n i t e d S t a t e s , a n y S t a t e , c o u n t y ,
m u n i c i p a l i t y , or p o l i t i c a l s u b d i v i s i o n t h e r e o f , the D i s t r i c t o f Columbia,
t h e C ommo n we al t h o f P u e r t o R i c o , A m e r i c a n Sa mo a , Guam, a n y t e r r i t o r y
o r p o s s e s s i o n o f t h e U n i t e d S t a t e s , o r any p o l i t i c a l s u b d i v i s i o n t h e r e o f "
2
may be m a i n t a i n e d i n NOW a c c o u n t s a t member b a n k s .
C o n s e q u e n t l y , the
B o a r d i s am,ending i t s S e p t e m b e r 1 6 , 1 98 1 i n t e r p r e t a t i o n and s e c t i o n 2 1 7 . 1 ( e ) ( 3 )
o f R e g u l a t i o n Q ( 12 CFR § 2 1 7 . 1 ( e ) ( 3 ) ) t o i m p l e m e n t s e c t i o n 706 o f t h e
G a r n - S t Germain A c t .
B ecause t h i s a c t i o n im plem ents the e x p l i c i t terms o f a s t a t u t e ,
w h i c h was e f f e c t i v e o n O c t o b e r 1 5 , 1 9 8 2 , t h e B o a r d b e l i e v e s t h a t g o o d
c a u s e e x i s t s f o r n o t f o l l o w i n g t h e n o t i c e and p u b l i c p a r t i c i p a t i o n p r o v i s i o n s
o f 5 U . S . C . § 5 5 3 ( b ) and f o r m a k i n g t h i s a c t i o n e f f e c t i v e w i t h t h e d a t e
o f en actm en t o f the G a r n - S t Germain A c t .
L ist
of
Subjects
i n 12 CFR P a r t
Advertising?
Banks,
2 17 *
banking?
Federal Reserve
System?
Foreign
banking.
E f f e c t i v e O c t o b e r 1 5 , 1 9 8 2 , p u r s u a n t t o i t s a u t h o r i t y u n der
s e c t i o n 1 9 ( a ) o f t he F e d e r a l R e s e r v e A c t ( 12 U . S . C . § 4 6 1 ( a ) ) , t h e B o a r d
a mends R e g u l a t i o n Q ( 12 CFR P a r t 2 17 ) a s f o l l o w s :
1.
By r e v i s i n g
paragraph
(e)
of
section
217.1
to
r e a d as
f ollow s:
SECTION 2 1 7 . 1 — DEFINITIONS
*
( e)
Savings
*
d eposits.
*
*
*
* * *
(3)
(i)
D e p o s it s s u b j e c t t o n e g o t i a b l e o r d e r s o f withdrawal
may be m a i n t a i n e d i f s u c h d e p o s i t s c o n s i s t o f f u n d s i n w h i c h t h e e n t i r e
b e n e f i c i a l i n t e r e s t i s h e l d by (A) o n e o r m o r e i n d i v i d u a l s ? ( B ) a c o r p o r a
t i o n , a s s o c i a t i o n , or oth e r o r g a n i z a t i o n o p e r a te d p r i m a r i l y fo r r e l i g i o u s ,
p h i l a n t h r o p i c , c h a r i t a b l e , e d u c a t io n a l, f r a t e r n a l , or oth er s im ila r
p u r p o s e s and n o t o p e r a t e d f o r p r o f i t ? o r (C) t h e U n i t e d S t a t e s , a n y
S t a t e o f the U n i t e d S t a t e s , c o u n t y , m u n i c i p a l i t y , o r p o l i t i c a l s u b d i v i s i o n
t h e r e o f , t h e D i s t r i c t o f C o l u m b i a , t h e Corc monweal th o f P u e r t o R i c o ,
A m e r i c a n Sa moa, Guam, a n y t e r r i t o r y o r p o s s e s s i o n o f t h e U n i t e d S t a t e s ,
o r any p o l i t i c a l s u b d i v i s i o n t h e r e o f .
(ii)
D e p o s i t s i n which any b e n e f i c i a l i n t e r e s t i s
by a c o r p o r a t i o n , p a r t n e r s h i p , a s s o c i a t i o n o r o t h e r o r g a n i z a t i o n t h a t
i s o p e r a t e d f o r p r o f i t or i s n o t o p e r a t e d p r i m a r i l y f o r r e l i g i o u s ,
p h i l a n t h r o p i c , c h a r i t a b l e , e d u c a t io n a l, f r a t e r n a l , or oth er sim ila r
p u r p o s e s , or th a t i s not a governm ental u n it d e s c r i b e d in subparagraph ( i ) ( C )
may n o t
be
cla ssified
as d e p o s i t s
*
2.
By r e v i s i n g
*
section
su bject
*
to
*
217.157
negotiable
orders
*
to
read
as
follow s:
of
withdrawal.
held
3
§ 217.157— E l i g i b i l i t y
for
NOW A c c o u n t s
(a)
Background.
(1)
E f f e c t i v e De c e m b e r 3 1 , 1 9 8 0 , t h e Con su mer
C h e c k i n g A c c o u n t E q u i t y A c t o f 198 0 ( T i t l e I I I o f t h e D e p o s i t o r y I n s t i t u t i o n s
D e r e g u l a t i o n and M o n e t a r y C o n t r o l A c t o f 1 9 8 0 ; P . L . 9 6 - 2 2 1 ; 94 S t a t .
1 4 6 ) ( ’' A c t " ) a u t h o r i z e s d e p o s i t o r y i n s t i t u t i o n s n a t i o n w i d e t o o f f e r
i n t e r e s t - b e a r i n g c h e c k i n g (NOW) a c c o u n t s t o d e p o s i t o r s w h e r e t h e " e n t i r e
b e n e f i c i a l i n t e r e s t i s h e l d by o n e o r mo r e i n d i v i d u a l s o r by an o r g a n i z a
t i o n which i s o p e r a te d p r i m a r i l y f o r r e l i g i o u s , p h i l a n t h r o p i c , c h a r i t a b l e ,
e d u c a t i o n a l , o r o t h e r s i m i l a r p u r p o s e s and w h i c h i s n o t o p e r a t e d f o r
p rofit."
( 12 U . S . C . 1 8 3 2 ( a ) ( 2 ) ) .
The p u r p o s e o f t h e A c t i s t o e x t e n d
t h e a v a i l a b i l i t y o f NOW a c c o u n t s t h r o u g h o u t t h e n a t i o n .
Previously,
a s an e x p e r i m e n t , NOW a c c o u n t s w e r e a u t h o r i z e d t o be o f f e r e d by d e p o s i t o r y
i n s t i t u t i o n s o n l y i n New E n g l a n d , New Y o r k , and New J e r s e y .
(2)
( i ) The NOW a c c o u n t e x p e r i m e n t e s t a b l i s h e d by C o n g r e s s
i n 1 9 7 3 d i d n o t s p e c i f y t h e t y p e s o f c u s t o m e r s t h a t c o u l d m a i n t a i n NOW
accounts.
As a r e s u l t , t h e r u l e s o f t h e F e d e r a l R e s e r v e and F e d e r a l
D e p o s i t I n s u r a n c e C o r p o r a t i o n s p e c i f i e d the t y p e s o f d e p o s i t o r s e l i g i b l e
t o m a i n t a i n NOW a c c o u n t s a t member and i n s u r e d nonmember b a n k s .
In
e n a c t i n g t h e NOW a c c o u n t p r o v i s i o n i n 1 9 8 0 , C o n g r e s s a d o p t e d v i r t u a l l y
t h e same l a n g u a g e c o n c e r n i n g NOW a c c o u n t e l i g i b i l i t y t h a t p r e v i o u s l y
h a d b e e n a d o p t e d by t h e B o a r d and t h e F e d e r a l D e p o s i t I n s u r a n c e C o r p o r a
t i o n w i t h r e g a r d t o t h e t y p e s o f c u s t o m e r s p e r m i t t e d t o m a i n t a i n NOW
a c c o u n t s i n i n s t i t u t i o n s l o c a t e d i n t h e NOW a c c o u n t e x p e r i m e n t r e g i o n .
( 1 2 CFR 2 1 7 . 1 ( e ) ( 3 ) and 12 CFR 3 2 9 . 1 ( e ) ( 2 ) ) .
T h i s d e f i n i t i o n was b a s e d
u po n l o n g s t a n d i n g r e g u l a t o r y p r o v i s i o n s c o n c e r n i n g e l i g i b i l i t y c r i t e r i a
fo r savings d e p o s it s .
( i i ) E f f e c t i v e O c t o b e r 1 5 , 1 9 8 2 , s e c t i o n 7 06 o f t h e G a r n S t G e r m a i n D e p o s i t o r y I n s t i t u t i o n s A c t o f 1 98 2 ( P . L. 9 7 - 3 2 0 ; 96 S t a t .
1 5 4 0 ) s p e c i f i c a l l y e x t e n d e d NOW a c c o u n t e l i g i b i l i t y t o f u n d s d e p o s i t e d
by g o v e r n m e n t a l u n i t s .
( 3)
*
*
*
*
*
*
*
*
(d)
Governmental U n i t s .
Governmental u n it s are g e n e r a l l y
e l i g i b l e t o m a i n t a i n NOW a c c o u n t s a t member b a n k s .
NOW a c c o u n t s may
c o n s i s t o f f u n d s i n w h i c h t h e e n t i r e b e n e f i c i a l i n t e r e s t i s h e l d by
th e U n i t e d S t a t e s , any S t a t e o f the U n ite d S t a t e s , c o u n t y , m u n i c i p a l i t y ,
o r p o l i t i c a l s u b d i v i s i o n t h e r e o f , t h e D i s t r i c t o f C o l u m b i a , t h e Common
w e a l t h o f P u e r t o R i c o , A m e r i c a n Sa moa, Guam, a n y t e r r i t o r y o r p o s s e s s i o n
o f t h e U n i t e d S t a t e s , o r any p o l i t i c a l s u b d i v i s i o n t h e r e o f .
By o r d e r
of
t he B o a r d o f
Governors,
November
(signed)
29,
1982.
W i l l i a m W. W i l e s
W i l l i a m W. W i l e s
S e c r e t a r y o f t he B o a r d
[SEAL]
@FedFRASER