Issuing agents must comply with all regulations and instructions issued by the Treasury Department, governing the accounting for stocks of bonds and notes received as issuing agent and the proceeds of sales thereof. Each issuing agent, other than an agent qualified on the basis of prepayment of stock, shall open and maintain, or continue to maintain, for the Federal Reserve Bank, a separate deposit account for the proceeds of all sales of bonds and notes to be known, as appropriate, as the "Savings Bond and Note Account," or the "Series E bond account." An issuing agent which is also a depositary pursuant to Treasury Department Circular No. 92, current revision (Part 203 of this chapter), may make payment by credit for the proceeds of its sales of bonds and notes up to any amount for which it shall be qualified under that circular in excess of existing deposits when so authorized by the Federal Reserve Bank.

§ 317.7 Fiscal agents.

The Federal Reserve Banks are authorized to perform such duties and prepare and issue such forms and instruc

1 Treasury Department Circulars No. 530, current revision (31 CFR Part 315), No. 653, current revision (31 CFR Part 316), and Public Debt Series No. 3-67 (31 CFR Part 342).

Subpart A-General Information

§ 321.0 Applicability of regulations.

The regulations in this part govern payments by banks and other financial institutions of U.S. Savings Bonds and U.S. Savings Notes.

§ 321.1 Definition of terms as used in these regulations.

Unless the context otherwise requires or indicates:

(a) "Bond(s)" or "savings bond(s)" means only U.S. Savings Bonds of Series A, B, C, D, or E presented for cash payment, and Series E and J bonds presented for redemption-exchange for Series H bonds under the provisions of Department Circular No. 1036 as amended (Part 339 of this chapter). Savings Bonds of Series F, G, H, and K, and bonds of Series J ineligible for redemption-exchange under Department Circular No. 1036, as amended, are not included.

(b) "Federal Reserve Bank(s)" or "Bank(s)" means a Federal Reserve Bank or Branch acting as fiscal agent of the United States.

(c) "Note(s)" or "savings note(s)" means a U.S. Savings Note (Freedom Share).

(d) "Owner(s)" means an individual, 1.e., a natural person, whose name is inscribed as an owner or co-owner in his own right on a bond or note.

(e) "Paying agent(s)" or "agent(s)' means (1) any eligible financial institution duly qualified pursuant to the provisions of this circular, or any previous revision thereof, to make payments, as herein specified, of U.S. Savings Bonds, and U.S. Savings Notes, and includes branches of such institutions located within the United States, its territories and possessions, the Commonwealth of Puerto Rico and the Canal Zone, and (2) banking facilities of such institutions established at military installations of the United States and other places with the specific approval of the Treasury Department.

(f) "Redemption" and "payment" are used interchangeably for payment of a bond or note in accordance with the terms of its offering and the regulations governing said securities, and includes "redemption-exchange," i.e., any authorized redemption of securities for the purpose of applying the proceeds, as provided under the terms of the offering, in

Commercial banks, trust companies, savings banks, savings and loan associations, building and loan associations (including cooperative banks), credit unions, cash depositories, industrial banks, and similar financial institutions which (a) are incorporated under Federal law or under the laws of a State, territory or possession of the United States, or the District of Columbia; (b) in the usual course of business accept, subject to withdrawal, funds for deposit or the purchase of shares; (c) are under the supervision of the banking department or equivalent authority of the jurisdiction in which incorporated; and (d) maintain regular offices for the transaction of their business, are eligible to become paying agents and, subject to the provisions relating to qualification set out in § 321.3, are authorized to make payments in connection with the redemption of savings bonds and savings notes, but only in accordance with the provisions of this circular, and any memorandum of instructions, guides, notices, etc., issued by the Department of the Treasury relating to such authorization.

§ 321.3 Application and qualification.

(a) Authority to qualify. Each Federal Reserve Bank, as fiscal agent of the United States, is authorized to qualify hereunder any eligible institution located in its district' which possesses adeqate authority under its charter to act as paying agent of savings bonds and savings notes.

(b) New applications. An institution not previously qualified which desires to act as paying agent of savings bonds and savings notes on or after the effective

1 For the purpose of this circular, eligible institutions in Puerto Rico, the Virgin Islands, and the Canal Zone shall be considered as being within the Second Federal Reserve District and shall make application to the Federal Reserve Bank of New York, and eligible institutions in Guam shall be considered as being within the Twelfth Federal Reserve District and shall make application to the Federal Reserve Bank of San Francisco.

date of this revision should apply to the Federal Reserve Bank of the district in which it is located on an applicationagreement form available from the Bank. No application-agreement will be accepted requesting qualification solely as paying agent either for savings bonds or for savings notes. Each applicationagreement filed hereunder shall include the provisions prescribed in section 202 of Executive Order No. 11246, entitled "Equal Employment Opportunity." (42 U.S.C. 2000e note)

(c) Agents previously qualified. Any financial institution qualified and acting as a paying agent of savings bonds on the effective date of this revision may continue to so act under its previous qualification, but subject to the terms and conditions hereof. Such agent will not be required to qualify by separate application-agreement to pay savings notes. If a paying agent of savings bonds redeems savings notes, and transmits the same to the Federal Reserve Bank of its district with a request to receive credit therefor, it shall be presumed thereby that the governing board or committee of such agent had theretofore undertaken appropriate action to authorize such redemptions and had agreed that the terms and conditions of its previous qualification as paying agent for savings bonds shall apply to savings notes as well. The granting of credit for such redemptions by the Bank shall constitute qualification of the agent to pay savings notes.

§ 321.4 Evidence of authority.

No announcement of or reference to an institution's authority to pay savings bonds and savings notes, nor acts purporting to have such authority, except as provided in § 321.3 (c), may be made until written notice of qualification has been received from the Federal Reserve Banks, and then only in a form, manner and substance as may be approved by the Treasury Department or by the Bank. § 321.5 Paying agent fees and charges.

(a) Scale of rates and procedures. Each paying agent shall receive reimbursement for all bonds and notes paid hereunder which are received by a Federal Reserve Bank and forwarded for the agent's account to the Treasury Department during each calendar quarter, according to the following scale:

15 cents each for the first 1,000 securities. 10 cents each for all over 1,000 securities, less any securities returned to the agent because they were ineligible for payment. The scale of rates shall be applicable separately to the agent and to each of its branches utilized in making payments under this circular, if the securities paid by each are separately scheduled and accounted for.

(b) No charge to owners. Paying agents shall not make any charge whatever to owners of savings bonds and savings notes in connection with payments hereunder.

§ 321.6 Termination of qualification.

The Secretary of the Treasury, or his delegate, may authorize a Federal Reserve Bank to terminate, by written notice, at any time and without prior demand or notice, the qualification hereunder of any paying agent in its district. A paying agent, upon notice to the Federal Reserve Bank through which it qualified, and following settlement of its account, may terminate its qualification. Subpart C-Scope of Authority

Subject to the terms and conditions appearing on the securities, to the governing regulations, and to the provisions of this circular, an agent may make payment of any savings bonds of Series A, B, C, D, or E, or of any savings note, upon presentation and surrender by the individual whose name is inscribed as the owner or coowner on the security: Provided, The individual is known to the agent or establishes his identity in accordance with the Department's instructions and identification guides. (See the Treasury Department's statement to paying agents on identification, dated Dec. 19, 1947.) This authority to make payments will be held to include:

(a) Change of name by marriage. Where the name of the owner as inscribed on the security has been changed by marriage and the agent knows or establishes that the presenter and the person whose name appears on the security is one and the same individual. The signature to the request for payment should show both names, for example, "Miss Mary T. Jones, now by marriage Mrs. Mary J. Smith." An agent is not authorized to pay a security for an owner whose name as inscribed thereon has been changed in any other manner.

(b) Parent of a minor. Where the name of the owner inscribed on the security is that of a minor child who is not of sufficient competency and understanding to execute the request for payment and comprehend the nature of such act but upon whose behalf request for payment is made by a parent with whom the child resides: Provided, however, The form of registration does not indicate that a guardian or similar reppresentative of the estate of the minor owner has been appointed or is otherwise legally qualified. The parent requesting payment must sign the request for payment in the form, for example, "John A. Jones, on behalf of John C. Jones," and place an endorsement in substantially the following form, which may be typed or imprinted on the back of the security: "I certify that I am the (father or mother) of John C. Jones and the person with whom he resides. He is years of age and is not of sufficient competency and understanding to sign the request." Such a payment may not be made to any person other than a father or mother. § 321.9 Redemption-exchange of Series E and J bonds for Series H bonds. Subject to the terms and conditions appearing on the bonds, the governing regulations, and the provisions of this part, an agent may accept for redemption-exchange Series E and eligible J bonds under the provisions of Department Circular No. 1036, as amended (Part 339 of this chapter).

§ 321.10 Specific limitations of payment authority.

An agent is not authorized to pay a bond or note:

(a) If presented for payment prior to the end of 2 months from the issue date in the case of a Series E bond, and of 1 year from the issue date in the case

of a note (the issue date appears on the upper right-hand portion of the face of the securities). Any payment or advance to an owner before his security is eligible for redemption is not authorized.

(b) If the agent does not know or cannot establish the identity of the person requesting payment as the owner of the security, including the establishment of the identity of a parent requesting payment on behalf of a minor child, as set forth in § 321.8(b). (See the memorandum of instructions issued in conjunction with this circular and the Treasury Department's statement to paying agents on identification, dated Dec. 19, 1947.)

(c) If the owner requesting payment does not sign his name in ink as it is inscribed on the security and show his home or business address. (See, also, § 321.8 (a) and (b).)

(d) If the security bears a material irregularity, for example, an illegible, incomplete, or unauthorized inscription, issue date, or issuing agent's validating stamp impression, or if any essential part thereof appears to be altered, or is mutilated or defaced in such a manner as to create doubt or arouse suspicion.

(e) If the security is registered in the name of an organization or a fiduciary.

(f) If the Treasury Department regulations require the submission of documentary evidence to support the redemption, as in the case of deceased owners, incompetents or minors under legal guardianship, or the change of an owner's name as inscribed on a bond or note for any reason other than marriage.

(g) If the owner named on the security and requesting payment is a minor who, in the opinion of the agent, is not of sufficient competency and understanding to execute the request for payment and comprehend the nature of such act. (See, also, § 321.8(b)).

(h) If it is known to the agent that the owner has been declared, in accordance with law, incompetent to manage his estate.

(i) If partial redemption is requested. § 321.11 Forwarding of securities not payable by agent.

Any securities which an agent is not authorized to pay under the provisions of this part should be forwarded for redemption, after certification of the requests for payment, to the Federal Reserve Bank or Branch of the district, or

the Office of the Treasurer of the United States, Securities Division, Washington, D.C. 20220. If an agent undertakes to forward such unpaid securities at the request and in behalf of the person entitled to payment, they must be sent separate and apart from bonds and notes which the agent has paid. Any documentary evidence required to support the redemption should accompany the securities when forwarded to the Federal Reserve Bank.

§ 321.12

Subpart D-Payment

Payment of securities.

(a) Examination. Before making payment of a bond or note, the agent shall examine it to determine:

(1) That the security is eligible for payment and is one which the agent is authorized to pay under the provisions of this part, and

(2) That the security does not bear a material irregularity or alteration, and is not mutilated or defaced.

(b) Identification. The agent shall determine that the individual presenting the security is the same person whose name is inscribed as owner or coowner thereon. Unless the presenter is a person whose identity is well known to the agent, or is an established customer, he should be asked to furnish satisfactory documentary or personal identification.

(c) Execution of request. The agent shall require that the request for payment on the back of the security be executed by the presenter in the presence of one of its officers or authorized employees, and the request shall include the home or business address of the individual making the request on at least one of the securities. Where the request has already been executed when the security is presented, it should ordinarily be reexecuted.

(d) Certification of request. Each agent submitting paid bonds and notes shall be understood by such submission to have represented and certified that the identity of the owner or coowner requesting payment has been duly established. Therefore, an agent will not be required in the case of any security which it pays to complete the certification form at the end of the request for payment, nor determine the authenticity of any certification which may appear thereon at the time it is presented for payment.

§ 321.13 Determination of redemption values and payment procedure.

The redemption value of a security is determined according to the period of time that it has been outstanding, and the table of redemption values applicable thereto. After establishing such value for each security presented, the agent shall place on the face thereof the word "PAID," the amount and date of actual payment and the name, location, and code number assigned to the agent by the Federal Reserve Bank. The affixing of such data shall constitute a certification by the paying agent that the security was redeemed in accordance with this circular, and that the proceeds of redemption were paid to the presenter. Payment shall be made in cash, a credit to the presenter's checking, savings or share account with the agent, or a check or similar instrument payable to his order.

If a loss shall result from a payment made in connection with the redemption of any security hereunder, the paying agent involved shall have a full and complete opportunity to present all of the facts pertaining thereto. Determination of losses shall be made pursuant to section 22(i) of the Second Liberty Bond Act, as amended. (Title 31, United States Code, sec. 757c(i).)

Subpart E-Miscellaneous Provisions § 321.16 Fiscal agents.

The Federal Reserve Banks and Branches, as fiscal agents of the United States, are authorized to perform such services as may be requested by the Secretary of the Treasury in connection with this part.