Sec. 204.133 Multiple savings deposits treated
as a transaction account.
(a) Authority. Under section 19(a) of the Federal Reserve Act, the Board
is authorized to define the terms used in section 19, and to prescribe
regulations to implement and prevent evasions of the requirements of that
section. Section 19(b) establishes general reserve requirements on transaction
accounts and nonpersonal time deposits. Under section 19(b)(1)(F), the
Board also is authorized to determine, by regulation or order, that an
account or deposit is a transaction account if such account is used directly
or indirectly for the purpose of making payments to third persons or others.
This interpretation is adopted under these authorities.
(b) Background. Under Regulation D, 12 CFR 204.2(d)(2), the term ``savings
deposit'' includes a deposit or an account that meets the requirements
of Sec. 204.2(d)(1) and from which, under the terms of the deposit contract
or by practice of the depository institution, the depositor is permitted
or authorized to make up to six transfers or withdrawals per month or statement
cycle of at least four weeks. The depository institution may authorize
up to three of these six transfers to be made by check, draft, debit card,
or similar order drawn by the depositor and payable to third parties. If
more than six transfers (or more than three third party transfers by check,
etc.) are permitted or authorized per month or statement cycle, the depository
institution may not classify the account as a savings deposit. If the depositor,
during the period, makes more than six transfers or withdrawals (or more
than three third party transfers by check, etc.), the depository institution
may, depending upon the facts and circumstances, be required by Regulation
D (Footnote 5 at Sec. 204.2(d)(2)) to reclassify or close the account.
(c) Use of multiple savings deposits. Depository institutions have
asked for guidance as to when a depositor may maintain more than one savings
deposit and be permitted to make all the transfers or withdrawals authorized
for savings deposits under Regulation D from each savings deposit. The
Board has determined that, if a depository institution suggests or otherwise
promotes the establishment of or operation of multiple savings accounts
with transfer capabilities in order to permit transfers and withdrawals
in excess of those permitted by Regulation D for an individual savings
account, the accounts generally should be considered to be transaction
accounts. This determination applies regardless of whether the deposits
have entirely separate account numbers or are subsidiary accounts of a
master deposit account. Multiple savings accounts, however, should not
be considered to be transaction accounts if there is a legitimate purpose,
other than increasing the number of transfers or withdrawals, for opening
more than one savings deposit.
(d) Examples. The distinction between appropriate and inappropriate
uses of multiple accounts is illustrated by the following examples:
Example 1. (i) X wishes
to open an account that maximizes his interest earnings but also permits
X to draw up to ten checks a month against the account. X's Bank suggests
an arrangement under which X establishes four savings deposits at Bank.
Under the arrangement, X deposits funds in the first account and then draws
three checks against that account. X then instructs Bank to transfer all
funds in excess of the amount of the three checks to the second account
and draws an additional three checks. Funds are continually shifted between
accounts when additional checks are drawn so that no more than three checks
are drawn against each account each month.
(ii) Suggesting the use of four savings accounts in the name of X in
this example is designed solely to permit the customer to exceed the transfer
limitations on savings accounts. Accordingly, the savings accounts should
be classified as transaction accounts.
Example 2. (i) X is
trustee of separate trusts for each of his four children. X's Bank suggests
that X, as trustee, open a savings deposit in a depository institution
for each of his four children in order to ensure an independent accounting
of the funds held by each trust.
(ii) X's Bank's suggestion to use four savings deposits in the name
of X in this example is appropriate, and the third party transfers from
one account should not be considered in determining whether the transfer
and withdrawal limit was exceeded on any other account. X established a
legitimate purpose, the segregation of the trust assets, for each account
separate from the need to make third party transfers. Furthermore, there
is no indication, such as by the direct or indirect transfer of funds from
one account to another, that the accounts are being used for any purpose
other than to make transfers to the appropriate trust.
Example 3. (i) X opens
four savings accounts with Bank. X regularly draws up to three checks against
each account and transfers funds between the accounts in order to ensure
that the checks on the separate accounts are covered. X's Bank did not
suggest or otherwise promote the arrangement.
(ii) X's Bank may treat the multiple accounts as savings deposits for
Regulation D purposes, even if it discovers that X is using the accounts
to increase the transfer limits applicable to savings accounts because
X's Bank did not suggest or otherwise promote the establishment of or operation
of the arrangement.
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