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deposits and time and savings deposits according to the type of account against which the items are chargeable, or the total amount shall be reported for deductions from demand deposits. When only the total amount of such unposted credits or unposted debits is shown on the records of the bank, the bank may elect to determine by experience factors such segregated amounts for either unposted credits or unposted debits or both.

(d) Bank reporting on basis of experience factor. An insured bank whose records do not show the amounts of unposted credits and unposted debits shall compute by experience factor or factors the unposted credits and may so compute the unposted debits. Banks with two years' experience on January 1, 1961 may establish an experience factor or factors under paragraph (f) of this section, or, upon application to and approval by the Corporation, may establish an experience factor or factors under paragraph (g) of this section, the same as banks with less than two years' experience. Such a bank, upon written approval by the Corporation, may be permitted to use separate factors for computing the additions to demand deposits and to time and savings deposits, or for computing the deductions from such deposits; or may be permitted to use a single factor for computing additions to be made in total amount to time and savings deposits or for computing deductions to be made in total amount from demand deposits. When a single factor is used, the additions or deductions are required to be made to or from the type of deposit giving the lesser advantage to the bank in taking the 163 percent deduction from demand deposits and the 1 percent deduction from time and savings deposits.

(e) Procedure for obtaining approval of experience factor. Each bank operating as an insured bank prior to January 1, 1961, which intends to use an experience factor in computing the amounts of unposted credits or unposted debits, shall signify its intention in writing to the Corporation not later than March 1, 1961. Any bank becoming an insured bank on or after January 1, 1961, whose records do not show amounts of unposted credits and unposted debits, and which proposes to report such items for assessment purposes by means of experience factors, shall so inform the Corporation within thirty (30) days after it becomes

an insured bank. Upon receipt of such notice, the Corporation will furnish to the bank a form for use in submitting to the Corporation the computations used in determining the percentage factor. Upon approval by the Corporation of such experience factors, the bank shall thereafter use such factors in reporting unpostea credits or debits until new experience factors are established pursuant to paragraph (k) of this section.

(f) Experience factors for banks with not less than two years' experience on January 1, 1961. (1) The reporting bank may use either of the following experience factors in reporting unposted credits for addition to the assessment base:

(1) Separate experience factors for additions to demand deposits and to time and savings deposits. The factor for:

(a) Demand deposits shall be the percentage obtained by dividing the average amount of unposted credits creditable to demand deposits which were added to deposits in certified statements for the assessment base days in the last two years prior to January 1, 1961, by the average amount of total demand deposits shown on the books of the bank on such base days; and

(b) Time and savings deposits shall be the percentage obtained by dividing the average amount of unposted credits creditable to time and savings deposits which were added to deposits in the certified statements for the assessment base days in the last two years prior to January 1, 1961, by the average amount of total time and savings deposits shown on the books of the bank on such base days.

There shall be separately stated in the report of condition for addition to demand deposits for assessment purposes, the amount obtained by multiplying the amount of total demand deposits shown in the report of condition by the factor for demand deposits, and for addition to time and savings deposits for assessment purposes the amount obtained by multiplying the amount of total time and savings deposits shown in the report of condition by the factor for time and savings deposits. In the event that the records of the bank show the total amount of unposted credits which were added to deposits in certified statements for the assessment base days in the last two years prior to January 1, 1961, but do not show the amounts thereof segregated as to those creditable to demand

deposits and to time and savings deposits, the bank may determine such segregated amounts for use in determining its separate experience factors hereunder, in the following manner: The bank shail ascertain the percentage to total unposted credits, of the unposted credits which are creditable to demand deposits, and the percentage to total unposted credits, of the unposted credits which are creditable to time and savings deposits, for the business days in the week commencing on March 15, 1961 and ending on March 21, 1961, both days inclusive, and shall apply such percentages to the average amount of all unposted credits which were added to deposits in such certified statements.

(ii) Single experience factors. The factor shall be the percentage obtained by dividing the average amount of all unposted credits which were added to deposits in certified statements for the assessment base days in the last two years prior to January 1, 1961, by the average amount of total deposits shown on the books of the bank for such base days. There shall be separately stated in the report of condition for addition to time and savings deposits for assessment purposes, the amount obtained by multiplying the amount of total deposits shown in the report of condition by such factor.

(2) The reporting bank may use either of the following experience factors in reporting unposted debits for deduction from the assessment base:

(1) Separate experience factors for deductions from demand deposits and from time and savings deposits. The factor for:

(a) Demands deposits shall be the percentage obtained by dividing the average amount of unposted debits chargeable to demand deposits which were claimed as deductions in the certified statements for the assessment base days in the last two years prior to January 1, 1961, or, if not claimed as a deduction thereunder, the amount of such unposted debits deducted from deposit liabilities before entry in such certified statements, by the average amount of total demand deposits shown on the books of the bank on such base days; and

(b) Time and savings deposits shall be the percentage obtained by dividing the average amount of unposted debits chargeable to time and savings deposits which were claimed as deductions in the certified statements for the assessment

base days in the last two years prior to January 1, 1961, or, if not claimed as a deduction thereunder, the amount of such unposted debits deducted from deposit liabilities before entry in such certified statements, by the average amount of total time and savings deposits shown on the books of the bank on such base days.

There shall be separately stated in the report of condition for deduction from demand deposits for assessment purposes, the amount obtained by multiplying the amount of total demand deposits shown in the report of condition by the factor for demand deposits, and for deduction from time and savings deposits for assessment purposes the amount obtained by multiplying the amount of total time and savings deposits shown in the report of condition by the factor for time and savings deposits. In the event that the records of the bank show the total amount of unposted debits which were claimed as deductions in certified statements for the assessment base days in the last two years prior to January 1, 1961 or deducted from deposit liabilities before entry in such certified statements, but do not show the amounts thereof segregated as to those chargeable to demand deposits and to time and savings deposits, the bank may determine such segregated amounts for use in determining its separate experience factors hereunder, in the following manner: The bank shall ascertain the percentage to total unposted debits, of the unposted debits which are chargeable to demand deposits, and the percentage to total unposted debits, of the unposted debits which are chargeable to time and savings deposits, for the business days in the week commencing on March 15, 1961 and ending on March 21, 1961, both days inclusive, and shall apply such percentages to the average amount of all unposted debits which were claimed as deductions in such certified statements or deducted from deposit liabilities before entry in such certified statements.

(ii) Single experience factor. The factor shall be the percentage obtained by dividing the average amount of all unposted debits which were claimed as deductions in the certified statements for the assessment base days in the last two years prior to January 1, 1961, or if not claimed as a deduction thereunder, the amount of unposted debits deducted from deposit liabilities before entry in

such certified statements, by the average amount of total deposits shown on the books of the bank on such base days. There shall be separately stated in the report of condition for deduction from demand deposits for assessment purposes, the amount obtained by multiplying the amount of total deposits shown in the report of condition by such factor. If the amount of deductions so obtained exceeds demand deposits, the excess thereof may be deducted from time and savings deposits.

(g) Experience factors for banks with less than two years' experience. (1) The reporting bank may use either of the following experience factors in reporting unposted credits for addition to the assessment base for two years:

(i) Separate experience factors for additions to demand deposits and to time and savings deposits. The factor for each semiannual period for:

(a) Demand deposits shall be the percentage obtained by dividing the amount of unposted credits on March 15, 1961 and thereafter on the first business day of February or August which are creditable to demand deposits by the amount of total demand deposits as shown on the books of the bank at the close of business on the same day; and

(b) Time and savings deposits shall be the percentage obtained by dividing the amount of unposted credits on March 15, 1961 and thereafter on the first business day of February or August which are creditable to time and savings deposits by the amount of total time and savings deposits as shown on the books of the bank at the close of business on the same day.

The bank shall determine, on March 15, 1961 and thereafter on the first business day of February or August until two years' experience has been obtained, the actual amount of unposted credits segregated according to the type of account to which creditable. There shall be separately stated in each report of condition for addition to demand deposits for assessment purposes, the amount obtained by multiplying the amount of total demand deposits shown in the report of condition by the factor for demand deposits for such semiannual period, and for addition to time and savings deposits for assessment purposes the amount obtained by multiplying the amount of total time and savings deposits shown in each report of con

dition by the factor for time and savings deposits for such semiannual period.

(ii) Single experience factor. The factor for each semiannual period shall be the percentage obtained by dividing the amount of all unposted credits on March 15, 1961 and thereafter on the first business day of February or August by the total deposits as shown on the books of the bank at the close of business on the same day. The bank shall determine, on March 15, 1961 and thereafter on the first business day of February or August until two years' experience has been obtained, the actual amount of all unposted credits. There shall be separately stated in each report of condition for addition to time and savings deposits for assessment purposes, the amount obtained by multiplying the amount of total deposits shown in the report of condition by the factor for such semiannual period.

(iii) Permanent experience factor. When two years' experience has been obtained under this paragraph, a new factor shall be computed and used for the ninth and subsequent reports of condition. This factor shall be the percentage obtained by dividing the aggregate amount of the unposted credits by the aggregate amount of the deposits, which were used in establishing each factor for the four preceding semiannual periods.

(2) Reporting bank may use either of the following experience factors in reporting unposted debits for deduction from the assessment base for two years:

(1) Separate experience factors for demand deposits and for time and savings deposits. The factor for each semiannual period:

(a) Demand deposits shall be the percentage obtained by dividing the amount of unposted debits on March 15, 1961 and thereafter on the first business day of February or August which are chargeable to demand deposits by the amount of total demand deposits as shown on the books of the bank at the close of business on the same day; and

(b) Time and savings deposits shall be the percentage obtained by dividing the amount of unposted debits on March 15, 1961 and thereafter on the first business day of February or August which are chargeable to time and savings deposits by the amount of total time and savings deposits as shown on the books of the bank at the close of business on the same day.

The bank shall determine, on March 15, 1961 and thereafter on the first business day of February or August until two years' experience has been obtained, the actual amount of unposted debits segregated according to the type of account against which chargeable. There shall be separately stated in each report of condition for deduction from demand deposits for assessment purposes, the amount obtained by multiplying the amount of total demand deposits shown in the report of condition by the factor for demand deposits for such semiannual period, and for deduction from time and savings deposits for assessment purposes the amount obtained by multiplying the amount of total time and savings deposits shown in the report of condition by the factor for time and savings deposits for such semiannual period.

(ii) Single experience factor. The factor for the semiannual period shall be the percentage obtained by dividing the amount of all unposted debits on March 15, 1961 and thereafter on the first business day of February or August by the total deposits as shown on the books of the bank at the close of business on the same day. The bank shall determine, on March 15, 1961 and thereafter on the first business day of February or August until two years' experience has been obtained, the actual amount of all unposted debits. There shall be separately stated in each report of condition for deduction from demand deposits for assessment purposes, the amount obtained by multiplying the amount of total deposits shown in the report of condition by the factor for such semiannual period. If the amount of deductions so obtained exceeds demand deposits, the excess thereof may be deducted from time and savings deposits.

(iii) Permanent experience factor. When two years' experience has been obtained under this paragraph, a new factor shall be computed and used for the ninth and subsequent reports of condition. This factor shall be the percentage obtained by dividing the aggregate amount of the unposted debits by the aggregate amount of the deposits, which were used in establishing each factor for the four preceding semiannual periods.

(3) When it is impractical to segregate the amounts of unposted credits or debits outstanding in a "branch clearings" ac

count or similar account or to segregate such unposted credits or debits between demand deposits and time and savings deposits in computing a factor or factors under this paragraph, such amounts may be ascertained in accordance with computation methods approved by the Corporation, upon application of the bank to the Corporation for permission to compute such amounts.

(h) Experience factors for newly insured banks. A newly insured bank may determine its experience factors in the same manner as that provided for banks with less than two years' experience in subparagraphs (1) and (2) of paragraph (g) of this section, except that in preparing its first report of condition for assessment purposes it shall determine the actual amounts of unposted credits, debits and deposits on a day designated by the Corporation, instead of on the first business day of February or August.

(i) Mergers, consolidations, deposit assumptions, and conversions. The continuing or resulting bank in a merger, consolidation or deposit assumption transaction, involving one or more banks which used an experience factor, shall use new experience factors based on the combined experience of the participating banks for the two-year period prior to such transaction or may establish a new factor or factors in accordance with paragraph (g) of this section. A bank resulting from the conversion of a bank shall continue to use the experience factors of the converted bank.

(j) Use of experience factor. Experience factors for the computation of unposted credits or unposted debits or both, once established by any bank and approved by the Corporation, must continue to be used for a period of at least three years and until a new factor or factors are established with the approval of the Corporation or until such time as the accounting methods of the bank are changed to show actual amounts thereof from day to day.

(k) Bank establishing new experience factors. Upon thirty days' written notice to the Corporation, a bank may establish new permanent factors in the manner provided in subparagraphs (1) and (2) of paragraph (g) of this section: Provided, however, That until such new permanent factors have been determined and approved in writing by the Corporation the bank shall continue to use its pre-established factors.

(1) Corporation requiring new experience factors. The Corporation may require a bank to establish new factors at any time as provided in subparagraphs (1) or (2), or both, of paragraph (g) of this section, and for this purpose may designate a day or days and a period or periods other than those specified therein for the determination of deposits and the actual amounts of unposted credits or unposted debits, or both. When such new factor or factors have been computed either by the bank or the Corporation and have been approved in writing by the Corporation, the bank shall use such new factor or factors for reports of condition filed thereafter.

(m) Notice to Corporation of changes in accounting methods. When a bank changes its accounting procedures from those used in the period in which its experience factors were established, in such manner as to increase or decrease the amount of unposted credits or unposted debits, it shall promptly give written notice to the Corporation of such change.

[26 F.R. 287, Jan. 14, 1961, as amended at 36 F.R. 3112, Feb. 18, 1971]

§ 327.2 Classification of deposits.

(a) The deposits to be reported in the reports of condition required to be made under section 7 of the Federal Deposit Insurance Act (12 U.S.C. 1817) shall be segregated between the time and savings deposits and the demand deposits.

(b) The time and savings deposits for the purpose of such reports and for the computation of assessments as provided in subsection (b) of section 7 of the Act (12 U.SC. 1817) shall consist of:

(1) Time certificates of deposit evidenced by an instrument providing on its face that the amount of such deposit is payable on a certain date not less than thirty days after the date of deposit, at the expiration of a specified period not less than thirty days after the date of the instrument, or upon written notice to be given not less than thirty days before the date of payment;

(2) Time deposits, open account, being deposits, other than time certificates of deposit, with respect to which there is in force a written contract with the depositor that neither the whole nor any part of such deposit may be withdrawn prior to the date of maturity, which shall not be less than 30 days after the date of the deposit, or prior to the ex

piration of the period of notice which must be given by the depositor in writing not less than 30 days in advance of withdrawals, including deposits such as Christmas club accounts and vacation. club accounts, which are made under written contracts providing that no withdrawal shall be made until a certain number of periodic deposits have been made during a period of not less than 3 months, even though some of the deposits are made within 30 days from the end of such period; and

(3) Deposits accumulated for the payment of personal loans representing the aggregate of amounts which are accumulated by borrowers for payment of personal loans in accounts opened by borrowers in connection with personal loans (whether or not the bank maintains a separate personal loan department) and which, under contracts between the bank and the borrowers, do not immediately reduce the unpaid balances of the loans but are assigned or pledged to assure repayment of the personal loans at maturity, except that amounts received by the bank which under contracts with the borrowers constitute installment payments on personal loans and immediately reduce the unpaid balances of the loans even though recorded on separate accounts on the books of the bank shall not be reported as deposits; and

(4) Savings deposits being deposits: (i) Which consist of funds deposited to the credit of one or more individuals, or of a corporation, association, or other organization operated primarily for religious, philanthropic, charitable, educational, fraternal, or other similar purposes and not operated for profit, or in which the entire beneficial interest is held by one or more individuals or by such a corporation, association, or other organization; and

(ii) With respect to which the depositor is not required by the deposit contract but may at any time be required by the bank to give notice in writing of an in tended withdrawal not less than 30 days before such withdrawal is made and which is not payable on a specified date or at the expiration of a specified time after the date of deposit.

(c) Demand deposits shall consist of all deposits other than time and savings deposits.

126 F.R. 287. Jan. 14, 1961, as amended at 31 F.R. 15795, Dec. 15, 1966]

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