"payable-on-death" account or similar account evidencing an intention that on his death the funds shall belong to his spouse, child or grandchild shall be insured up to $40,000 in the aggregate as to each such named beneficiary, separately from any other accounts of the owner.

(b) If the named beneficiary of such an account is other than the owner's spouse, child or grandchild, the funds in such account shall be added to any individual accounts of such owner and insured up to $40,000 in the aggregate.

[32 F.R. 10408, July 14, 1967, as amended at 35 FR 460, Jan. 14, 1970; 39 FR 41359, Nov. 27, 1974]

§ 330.4

Accounts held by executors or administrators.

Funds of a decedent held in the name of the decedent or in the name of the executor or administrator of his estate and deposited in one or more deposit accounts shall be insured up to $40,000 in the aggregate, separately from the individual deposit accounts of the beneficiaries of the estate or of the executor or administrator.

[32 F.R. 10408, July 14, 1967, as amended at 35 FR 460, Jan. 14, 1970; 39 FR 41359, Nov. 27, 1974]

Deposit accounts of a corporation or partnership engaged in any independent activity shall be insured up to $40,000 in the aggregate. A deposit account of a corporation or partnership not engaged in an independent activity shall be deemed to be owned by the person or persons owning such corporation or comprising such partnership and, for deposit insurance purposes, the interest of each person in such a deposit account shall be added to any other deposit accounts individually owned by such person and insured up to $40,000 in the aggregate.

[32 F.R. 10408, July 14, 1967, as amended at 35 FR 460, Jan. 14, 1970; 39 FR 41359, Nov. 27, 1974]

an unincorporated association not engaged in an independent activity shall be deemed to be owned by the persons comprising such association and, for deposit insurance purposes, the interest of each owner in such a deposit account shall be added to any other deposit accounts individually owned by such person and insured up to $40,000 in the aggregate.

[32 F.R. 10408, July 14, 1967, as amended at 35 FR 460, Jan. 14, 1970; 39 FR 41359, Nov. 27, 1974]

§ 330.7 Independent activity.

The term "independent activity" means any activity other than one directed solely at increasing insurance coverage.

§ 330.8 Public unit accounts.

(a) (1) Each official custodian of funds of the United States depositing the same in time or savings deposits in an insured bank shall be separately insured up to $100,000 as to such deposits. Each such official custodian depositing such funds in a demand deposit shall be separately insured up to $40,000.

(2) Each official custodian of funds of any State of the United States or any county, municipality, or political subdivision thereof depositing the same in time or savings deposits in an insured bank in the same State shall be separately insured up to $100,000.

(3) Each official custodian of funds of the District of Columbia lawfully depositing the same in time or savings deposits in an insured bank in the District of Columbia shall be separately insured up to $100,000.

(4) Each official custodian of funds of the Commonwealth of Puerto Rico, the Virgin Islands, American Samoa, or Guam, or of any county, municipality, or political subdivision thereof lawfully depositing the same in time or savings deposits in an insured bank in Puerto Rico, the Virgin Islands, American Samoa, or Guam, respectively, shall be separately insured up to $100,000.

(5) Each official custodian referred to in paragraphs (a) (2), (3), and (4) of this section lawfully depositing such funds in demand deposits in an insured bank within the same State, District of Columbia, Commonwealth, possession or territory comprising the public unit or wherein the public unit is located, or in

any form of deposit, whether time, savings or demand, in an insured bank outside such jurisdiction, shall be separately insured up to $40,000.

(6) For purposes of this paragraph (a), if the same person is an official custodian of more than one public unit, he shall be separately insured with respect to the public funds held by him for each such unit, but shall not be separately insured by virtue of holding different offices in such unit or, except as provided in paragraph (b) of this section, holding such funds for different purposes.

(b) Public bond issues. Where an officer, agent or employee of a public unit has custody of certain funds which by law or under the bond indenture are required to be paid to the holders of bonds issued by the public unit, any deposit of such funds in an insured bank shall be deemed to be a deposit by a trustee of trust funds of which the bondholders are pro rata beneficiaries, and each such beneficial interest shall be separately insured up to $40,000.

(c) Political subdivision. The term "political subdivision" includes any subdivision of a public unit, as defined in section 3 (m) of the Federal Deposit Insurance Act, or any principal department of such public unit, (1) the creation of which subdivision or department has been expressly authorized by State statute, (2) to which some functions of government have been delegated by State statute, and (3) to which funds have been allocated by statute or ordinance for its exclusive use and control. It also includes drainage, irrigation, navigation, improvement, levee, sanitary, school or power districts, and bridge or port authorities and other special districts created by State statute or compacts between the States. Excluded from the term are subordinate or nonautonomous divisions, agencies, or boards within principal departments.

[32 F.R. 10408, July 14, 1967, as amended at 34 F.R. 247, Jan. 8, 1969; 35 F.R. 460, Jan. 14, 1970; 39 FR 41359, Nov. 27, 1974]

community property, shall be insured separately from deposit accounts individually owned by the coowners.

(b) Qualifying joint accounts. A joint deposit account shall be deemed to exist, for purposes of insurance of accounts, only if each coowner has personally executed a deposit account signature card and possesses withdrawal rights. The restrictions of this paragraph shall not apply to coowners of a time certificate of deposit or to any deposit obligation evidenced by a negotiable instrument, but such a deposit must in fact be jointly owned.

(c) Failure to qualify. A deposit account owned jointly which does not qualify as a joint account for purposes of insurance of accounts shall be treated as owned by the named persons as individuals and the actual ownership interest of each such person in such account shall be added to any other accounts individually owned by such person and insured up to $40,000 in the aggregate.

(d) Same combination of individuals. All joint deposit accounts owned by the same combination of individuals shall first be added together and insured up to $40,000 in the aggregate.

(e) Interest of each coowner. The interests of each coowner in all joint deposit accounts owned by different combinations of individuals shall then be added together and insured up to $40,000 in the aggregate.

[32 F.R. 10408, July 14, 1967, as amended at 33 FR 8505, June 8, 1968; 39 FR 41359, Nov. 27, 1974]

§ 330.10 Trust accounts.

All trust interests for the same beneficiary deposited in deposit accounts established pursuant to valid trust agreements created by the same settlor (grantor) shall be added together and insured up to $40,000 in the aggregate, separately from other deposit accounts of the trustee of such trust funds or the settlor or beneficiary of such trust arrangements.

[32 F.R. 10408, July 14, 1967, as amended at 35 FR 460, Jan. 14, 1970; 39 FR 41359, Nov. 27, 1974]

tificate of deposit, negotiable draft, negotiable cashier's or officer's check, negotiable certified check, or negotiable traveler's check or letter of credit, the owner of such deposit obligation will be recognized for all purposes of claim for insured deposits to the same extent as if his name and interest were disclosed on the records of the bank provided the instrument was in fact negotiated to such owner prior to the date of the closing of the bank. Affirmative proof of such negotiation must be offered in all cases to substantiate the claim.

§ 330.12

Deposit obligations for payment of items forwarded for collection by bank acting as agent.

Where a closed bank has become obligated for the payment of items forwarded for collection by a bank acting solely as agent, the owner of such items will be recognized for all purposes of claim for insured deposits to the same extent as if his name and interest were disclosed on the records of the bank when such claim for insured deposits, if otherwise payable, has been established by the execution and delivery of prescribed forms. Such bank forwarding such items for the owners thereof will be recognized as agent for such owners for the purpose of making an assignment of the rights of such owners against the closed insured bank to the Federal Deposit Insurance Corporation and for the purpose of receiving payment on behalf of such owners.

§ 330.13 Continuation of prior coverage.

All deposit accounts insured under the rules and interpretations heretofore in effect shall continue to be insured, anything in this part to the contrary notwithstanding, until April 15, 1968. § 330.14 Notification of depositors.

Each insured bank is required to provide notice of these revisions to the Rules and Regulations for Clarification and Definition of Insurance Coverage of Deposit Accounts, Part 330, not later than April 1, 1968, to the depositors of each deposit account which had a balance in excess of $5,000 on any date selected by the bank between September 1, 1967, and April 1, 1968. Such notice shall consist of mailing to such depositors at their last known address as shown on the rec

ords of the insured bank, a question and answer brochure on insurance of deposit accounts prepared by the Federal Deposit Insurance Corporation. Such brochure shall also be made available to the public at each teller's station or window where deposits are normally received and at new account stations of an insured bank. Additional explanatory materials may also be sent to depositors at the option of the insured bank.

[33 F.R. 530, Jan. 16, 1968]

§ 330.101

INTERPRETATIONS

Recognition of deposit ownership in custodial accounts.

(a) The opinion of the Board of Directors has been requested as to whether a fractional or percentage computation of the interests of owners of commingled funds on deposit in custodial accounts in banks insured by the Federal Deposit Insurance Corporation meets the requirements of § 330.1.

(b) Section 330.1 provides that if the name and interest of an owner of any portion of a specifically designated custodial deposit is disclosed on the records of the person in whose name the deposit is maintained and such records are maintained in good faith and in the regular course of business, such owner will be recognized for all purposes of claim for insured deposits to the same extent as if his name and interest were disclosed on the records of the bank.

(c) The Board of Directors has concluded that, if the records of the depositor, maintained in good faith and in the regular course of business, reflect, at all times, the name and ascertainable interest of each owner in a specifically designated custodial deposit, such interest may be determined on a fractional or percentage basis. This may be accomplished in any manner which indicates that where the funds of an owner are commingled with other funds held in custody and a portion thereof is placed on deposit in one or more insured banks, his interest in a custodial deposit in any one insured bank would represent at any given time the same fractional share as his share of the total commingled funds.

NOTE: The appendix and examples formerly following Part 330 are no longer applicable. Sec. 102, of Public Law 93-495, 88 Stat. 1500, increased the maximum insurance on ac

ounts insured by the Federal Deposit Inurance Corporation, as specified in 12 U.S.C. 821(a), from $20,000 to $40,000. A revision of he appendix and examples to reflect the hange in coverage will be issued in the FEDRAL REGISTER during the 1975 calendar year.

PART 331-INSURANCE OF TRUST FUNDS

§ 331.1

Claim by fiduciary bank for insured deposits of trust estates.

In the event of the closing of an insured bank for inability to meet the demands of its depositors, the claim for nsured deposits made by a fiduciary bank or trust company which, in the exercise of its trust powers, had deposited trust funds therein will be determined as follows:

(a) Allocated funds of a trust estate. If trust funds of a particular trust estate are allocated by the fiduciary and deposited, the deposit with respect to such estate will be determined by ascertaining the amount of its funds allocated, deposited and remaining to the credit of the claimant as fiduciary in the closed insured bank.

(b) Interest of a trust estate in unallocated trust funds. If trust funds of a particular trust estate be mingled' with trust funds of other trust estates and deposited by the fiduciary bank or trust company in one or more insured banks to the credit of the depositing bank or trust company as fiduciary, without allocation of specific amounts from the particular trust estate to an account in such bank or banks, the deposit with respect to such estate in any closed insured bank will be the amount which will bear the same ratio to all unallocated funds of the estate for which the fiduciary is accountable as the entire unallocated trust funds to the credit of the fiduciary bank or trust company in the closed insured bank will bear to the entire amount of such funds so deposited by the fiduciary in all depositories."

1 This section is not to be construed as an express or implied approval of such commingling of trust funds as may be involved in the maintaining of general trust accounts. 'In determining claims under this paragraph, unallocated trust funds in the fiduclary bank will be included in the totals of such funds.

(c) Claims for funds of corporate trust determined on basis of allocation. The rule stated in paragraph (b) of this section will not be applied to funds of a bank or trust company held as fiduciary under a type of trust created to facilitate the issuance, distribution, or servicing of corporate bonds, debentures, or stock issues, commonly known as corporate trusts. The claim of the fiduciary bank with respect to deposits of such funds will be determined according to allocations of the funds of particular estates to particular deposit accounts.

(d) Insured deposit of a trust estate. In arriving at the total insured deposit of a fiduciary bank or trust company with respect to any trust estate, the deposit of such estate as determined in accordance with any paragraph of this section shall be combined with that determined under any other paragraph of this section and the insured deposit shall be the total less any amount thereof in excess of $40,000.

(Sec. 9, 64 Stat. 881; 12 U.S.C. 1819) [15 F.R. 8644, Dec. 6, 1950, as amended at 32 F.R. 10561, July 19, 1967; 35 FR 460, Jan. 14, 1970; 39 FR 41359, Nov. 27, 1974]

AUTHORITY: The provisions of this Part 832 issued under secs. 6, 9, 64 Stat. 876, 881; 12 U.S.C. 1816, 1819.

§ 332.1 Inconsistent powers.

A State nonmember insured bank (except a District bank) which does not have any of the powers hereinafter enumerated, or which, although it has any such power, does not exercise the same, shall not hereafter exercise, take, or assume the power: (a) To do a surety business; (b) to insure the fidelity of others; (c) to engage in insuring, guaranteeing or certifying titles to real estate; or (d) to guarantee or become surety upon the obligations of others.1 [39 FR 29178, Aug. 14, 1974]

1 The limitations prescribed in § 332.1(d) do not include acceptances, endorsements, or letters of credit made or issued in the usual course of the banking business.

89-057-75– -6

§ 333.1

REGULATIONS

Classification of general character of business.

State nonmember insured banks are divided into five categories for the purpose of classifying their general character or type of business, viz: commercial banks, banks and trust companies, savings banks (including mutual and stock), industrial banks, and cash depositories.

§ 333.2 Change in general character of business.

No State nonmember insured bank (except a District bank) or branch thereof shall hereafter cause or permit any change to be made in the general character or type of business exercised by it after the effective date of this part without the prior written consent of the Corporation.

334.1 Authority and scope.

334.2

334.3

Form of assurances.

Time for furnishing assurances. 334.4 Special situations.

AUTHORITY: The provisions of this Part 334 issued under sec. 9, 64 Stat. 881, 76 Stat. 1133; 12 U.S.C. 1819, 1865.

SOURCE: The provisions of this Part 334 appear at 28 F.R. 3201, Apr. 3, 1963, unless otherwise noted.

§ 334.1 Authority and scope.

This part implements the provisions of section 5 of the Bank Service Corporation Act, Public Law 87-856, approved October 23, 1962 (76 Stat. 1132), in the application thereof to arrangements for the performance of bank services for insured State nonmember banks. Under this section of the Act, no insured State nonmember bank may cause to be performed, by contract or otherwise, any bank services for itself, whether on or off its premises, unless assurances satisfactory to the Board of Directors of the Federal Deposit Insurance Corporation are furnished to the Board of Directors by both the bank and the party performing such services that the performance thereof will be subject to regulation and examination by the Board of Directors to the same extent as if such services were being performed by the bank itself on its own premises. Such assurances are required by the Act whether the bank services are performed by bank service corporations in which the Act authorizes banks to invest, or by others. Under section 1(b) of the Act, the term "bank services" means services such as check and deposit sorting and posting, computation and posting of interest and other credits and charges preparation and mailing of checks, statements, notices, and similar items, or other clerical bookkeeping, accounting, statistical, or similar functions performed for a bank.