The NOW accounts has a grandfather provision for accounts established at a member bank on or before August 31, 1981. But this is only applicable if the entity previously qualified. Is there documentation to clarify what qualified prior to 1981?

Maybe an “old-timer” will know and point you in the right direction. I vaguely recall something to do with some New England state(s).

However, if you are an FDIC examined bank, you will have a very difficult time using the ‘grandfather’ provision. The following is out of the Compliance Exam Manual, note that the proof is under state law. Go here to see this section of the manual.

6. Cite as violations of Section 329.1 accounts held by ineligible entities.

NOTE: In some instances, financial institutions may contend that the “grandfather clause” in Section 204.130(f) of Regulation D exempts any ineligible NOW accounts opened on or before August 31, 1981 for violating Part 329. However, the FDIC does not support this position unless the financial institution can demonstrate that the depositor was previously qualified to maintain a NOW account under a state law prior to August 31, 1981.

Good luck.

William is right. The FDIC does not recognize the grand-father exemption. To answer your question, the account must have been opened by a qualifying entity (eligible for a NOW account) prior to 8/31/81.

And not even this old-timer can recall what the qualifications were, except that NOW accounts were limited to New England and perhaps New York and New Jersey prior to the 1980 Monetary Control Act.

No disrespect intended, of course, to anyone who may qualify as an “old-timer”.

None inferred, you young whippersnapper!