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#1577838 - 07/14/11 02:11 PM Re: Reg Q & now accounts Carolyn31
RR Joker Offline
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This (premiums) is addressed in the Federal Register publication of the final rule today. They are keeping that section of Q (as well as the definition of interest) and moving it to part 330.
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#1578301 - 07/14/11 08:32 PM Re: Reg Q & now accounts Carolyn31
ahanna Offline
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KFitz - If I am not mistaken, the reporting of interest paid for tax purposes would stem from the Reg DD definition of interest, which has also now been revised to state that bonuses are not interest for the purpose of that regulation. The IRS likely has other "gift" rules but I have not delved that far yet.
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#1578367 - 07/14/11 09:37 PM Re: Reg Q & now accounts RR Joker
John Burnett Offline
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Originally Posted By: RR Joker
This (premiums) is addressed in the Federal Register publication of the final rule today. They are keeping that section of Q (as well as the definition of interest) and moving it to part 330.


In this case, "they" are the FDIC, and their Part 330 retention of the definition of interest and the exception for premiums is meant only to be able to define what a noninterst-bearing transaction account is for FDIC unlimited coverage.

The effect is that you won't want to provide incentive payments for non-interest bearing (traditional) DDA accounts, because it can affect the ability of the customer to have unlimited insurance coverage.

The Fed announced its final rule removing Regulation Q today. It will also be effective 7/21/11.
Last edited by John Burnett; 07/14/11 09:40 PM.
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#1578427 - 07/15/11 06:23 AM Re: Reg Q & now accounts John Burnett
rlcarey Online
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"the reporting of interest paid for tax purposes would stem from the Reg DD definition of interest,"

The reporting of interest for tax purposes is totally based on IRS rules and definition and has nothing to do with Reg. D, Q, DD, etc.
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#1578682 - 07/15/11 04:06 PM Re: Reg Q & now accounts rlcarey
John Burnett Offline
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The IRS has a revenue procedure that addresses "de minimis premiums" paid as account incentives which dovetails nicely with the premiums exclusions in soon-to-be-defunct Reg Q. But that's about as close as the rules get to one another. You have to follow IRS rules and definitions on interest reporting, not the Fed's rules.
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#1579262 - 07/18/11 03:52 PM Re: Reg Q & now accounts John Burnett
Valley Girl Offline
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Wolters Kluwer has stated, "Financial institutions no longer need to worry about inadvertently failing to observe the NOW account eligibility requirements, because the regulatory definitions automatically redefines any such account as a demand deposit, solely by the virtue of the fact that it is held by a non-qualifying entity."

I guess I'm confused by their statement because I thought the NOW account eligibility requirements did not change.

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#1579294 - 07/18/11 04:27 PM Re: Reg Q & now accounts Valley Girl
rlcarey Online
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It is a true statement, but without being able to track the difference between the two, your FR2900 if going to be screwed up.
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#1580055 - 07/19/11 08:26 PM Re: Reg Q & now accounts rlcarey
markp Offline
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Iím confused, why is it for business and individuals? We can pay interest on any individual acct right? What is the purpose of including the individual accounts in this change?

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#1580161 - 07/20/11 06:06 AM Re: Reg Q & now accounts markp
rlcarey Online
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The change to Regulation Q has nothing to do with business and consumer accounts. The repeal allows banks to pay interest on any DDA account, regardless of ownership. The main focus has been on businesses, as most businesses are not eligible for a NOW account. If you begin to pay interest on consumer DDA accounts, you are going to have to follow the FDIC insurance rules and properly code them for FR2900 reporting.
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#1581236 - 07/21/11 06:39 PM Re: Reg Q & now accounts rlcarey
markp Offline
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thanks

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