SECTION 1-LOANS ON PROPERTY LOCATED WITHIN THOSE SMSAS IN WHICH INSTITUTION HAS HOME OR BRANCH OFFICES

PART 204-RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS

Sec.

204.1 Authority, purpose and scope. 204.2 Definitions.

204.3 Computation and maintenance. 204.4 Transitional adjustments.

204.5 Emergency reserve requirement. 204.6 Supplemental reserve requirement. 204.7 Penalties.

204.8 International banking facilities. 204.9 Reserve requirement ratios. 204.121 Bankers' banks.

204.122 Secondary market activities of international banking facilities.

AUTHORITY: Secs. 19, 25, 25(a) of the Federal Reserve Act (12 U.S.C 461, 601, 611); and sec. 7 of the International Banking Act of 1978 (12 U.S.C 3105).

SOURCE: 45 FR 56018, Aug. 22, 1980, unless otherwise noted.

§ 204.1 Authority, purpose and scope.

(a) Authority. This part is issued under the authority of section 19 (12 U.S.C. 461 et seq.) and other provisions of the Federal Reserve Act and of section 7 of the International Banking Act of 1978 (12 U.S.C. 3105).

(b) Purpose. This part relates to reserves that depository institutions are required to maintain for the purpose of facilitating the implementation of monetary policy by the Federal Reserve System.

(c) Scope. (1) The following depository institutions are required to maintain reserves in accordance with this part:

(i) Any insured bank as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813(h)) or any bank that is eligible to apply to become an insured bank under section 5 of such Act (12 U.S.C. 1815);

(ii) Any savings bank or mutual savings bank as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813(f), (g));

(iii) Any insured credit union as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752(7)) or any credit union that is eligible to apply to become an insured credit union under section 201 of such Act (12 U.S.C. 1781);

(iv) Any member as defined in tion 2 of the Federal Home Loan Act (12 U.S.C. 1422(4)); and

(v) Any insured institution a fined in section 401 of the Nat Housing Act (12 U.S.C. 1724(a)) o institution which is eligible to app become an insured institution section 403 of such Act (12 T 1726).

(2) Except as may be otherwise vided by the Board, a foreign b branch or agency located in United States is required to co with the provisions of this part i same manner and to the same e as if the branch or agency we member bank, if its parent fo bank (i) has total worldwide co dated bank assets in excess of $1 lion; or (ii) is controlled by a fo company or by a group of foreign panies that own or control for banks that in the aggregate have worldwide consolidated bank asse excess of $1 billion. In addition, other foreign bank's branch locat the United States that is eligibl apply to become an insured under section 5 of the Federal De Insurance Act (12 U.S.C. 1815) i quired to maintain reserves in ac ance with this part as a nonmer depository institution.

(3) Except as may be otherwise vided by the Board, an Edge Corp tion (12 U.S.C. 611 et seq.) or an Ag ment Corporation (12 U.S.C. 60 seq.) is required to comply with provisions of this part in the s manner and to the same extent member bank.

(4) This part does not apply to financial institution that (i) is c nized solely to do business with o financial institutions; (ii) is owned marily by the financial institut with which it does business; and does not do business with the gen public.

(5) The provisions of this part do apply to any deposit that is pay only at an office located outside United States.

§ 204.2 Definitions.

For purposes of this part, the following definitions apply unless otherwise specified:

(a)(1) "Deposit" means:

(i) The unpaid balance of money or its equivalent received or held by a depository institution in the usual course of business and for which it has given or is obligated to give credit, either conditionally or unconditionally, to an account, including interest credited, or which is evidenced by an instrument on which the depository institution is primarily liable;

(ii) Money received or held by a depository institution, or the credit given for money or its equivalent received or held by the depository institution in the usual course of business for a special or specific purpose, regardless of the legal relationships established thereby, including escrow funds, funds held as security for securities loaned by the depository institution, funds deposited as advance payment on subscriptions to United States government securities, and funds held to meet its acceptances;

(iii) An outstanding draft, cashier's check, money order, or officer's check drawn on the depository institution and issued in the usual course of business for any purpose, including payment for services, dividends, or purchases;

(iv) Any due bill or other liability or undertaking on the part of a depository institution to sell or deliver securities to, or purchase securities for the account of, any customer (including another depository institution), involving either the receipt of funds by the depository institution, regardless of the use of the proceeds, or a debit to an account of the customer before the securities are delivered. A deposit arises thereafter, if after three business days from the date of issuance of the obligation, the depository institution does not deliver the securities purchased or does not fully collateralize its obligation with securities similar to the securities purchased. A security is similar if it is of the same type and if it is of comparable maturity to that purchased by the customer;

(v) Any liability of a depository institution's affiliate that is not a deposi

tory institution, on any promissory note, acknowledgment of advance, due bill, or similar obligation (written or oral), with a maturity of less than four years, to the extent that the proceeds are used to supply or to maintain the availability of funds (other than cap:tal) to the depository institution. except any such obligation that, had it been issued directly by the depository institution, would not constitute a deposit. If an obligation of an affiliate of a depository institution is regarded as a deposit and is used to purchase assets from the depository institution. the maturity of the deposit is deter mined by the shorter of the maturity of the obligation issued or the remaining maturity of the assets purchased. If the proceeds from an affiliate's obligation are placed in the depository in stitution in the form of a reservable deposit, no reserves need be maintained against the obligation of the af filiate since reserves are required to be maintained against the deposit issued by the depository institution. Howev er, the maturity of the deposit issued to the affiliate shall be the shorter of the maturity of the affiliate's obligation or the maturity of the deposit;

(vi) Credit balances;

(vii) Any liability of a depository institution on any promissory note, acknowledgment of advance, bankers' acceptance, or similar obligation (written or oral), including mortgage-backed bonds, that is issued or undertaken by a depository institution as a means of obtaining funds, except any such obli

gation that:

(A) Is issued or undertaken and held for the account of:

(1) An office located in the United States of another depository institution, foreign bank, Edge or Agreement Corporation, or New York Investment (Article XII) Company;

(2) The United States government or an agency thereof; or

(3) The Export-Import Bank of the United States, Minbanc Capital Corporation, the Government Development Bank for Puerto Rico, a Federal Reserve Bank, a Federal Home Loan Bank, or the National Credit Union Administration Central Liquidity Fa

cility;