repurchase, and is either (a) In denominations of $100,000 or more, or (b) in denominations of less than $100,000, matures in less than 90 days and cannot be automatically renewed or extended; 17a (3) (i) Bears on its face, in bold-face type, the following: This obligation is not a deposit and is not insured by the Federal Deposit Insurance Corporation; (ii) Has a maturity of: (A) At least seven years, or (B) in the case of an obligation or issue that provides for scheduled repayments of principal, has an average maturity* of at least seven years and provides that once repayment of principal begins, all scheduled repayments shall be made at least annually and that the amount repaid in each year shall be no less than the amount repaid in the prior year; provided that the Federal Deposit Insurance Corporation may permit the issuance of an obligation or issue with a shorter maturity or average maturity, or an obligation or issue which otherwise fails to comply with the provisions of this paragraph (b)(3)(ii), if the Federal Deposit Insurance Corporation has determined that exigent circumstances require the issuance of such obligation or issue; (iii) Is in an amount of at least $500, provided that the Federal Deposit Insurance Corporation may, at its option, permit the issuance of an obligation in a lesser amount where such 17a A bank with obligations in denominations of less than $100,000 with maturities of 90 days or more that evidence an indebtedness arising from a transfer of direct obligations of, or obligations that are fully guaranateed as to principal and interest by the United States or any agency thereof that the bank is obligated to repurchase, may continue to issue such obligations until August 1, 1982 without regard to this subsection so long as the aggregate amount does not exceed its total of such obligations outstanding on August 1, 1979. *The "average maturity" of an obligation or issue repayable in scheduled periodic payments shall be the time-weighted average of all such scheduled payments. In any serial note issue which is exempt from the provisions of paragraph (b)(3)(ii) by virtue of having an average maturity of 7 years or more, no note in that issue may be offered with a maturity of less than 5 years. lesser amount is necessary in order to either (A) Satisfy the preemptive rights of shareholders in the case of a convertible debt obligation; or (B) Maintain a ratable unit offering to holders of preemptive rights in the case of an obligation issued exclusively as part of a unit including shares of stock which are subject to such preemptive rights; or (C) Satisfy shareholders' ratable claims in the case of an obligation issued wholly or partially in exchange for shares of voting stock or assets pursuant to a plan of merger, consolidation, reorganization, or other transaction where the issuer will acquire either a majority of such shares of voting stock or all or substantially all of the assets of the entity whose assets are being acquired. (iv) States expressly that it is subordinated to the claims of depositors and is ineligible as collateral for a loan by the issuing bank; (v) Is unsecured; and (vi) Has been approved by the Federal Deposit Insurance Corporation as an addition to the bank's capital structure; or 18 (4) Arises from a borrowing by an insured nonmember bank from a dealer in securities, for one business day, of proceeds of a transfer of deposit credit in a Federal Reserve Bank (or other immediately available funds), commonly referred to as "Federal funds", received by such dealer on the date of the loan in connection with the clearance of securities transactions. (5) Is issued by an insured nonmember mutual savings bank 18 so long as the issue meets all of the following criteria: 18b 18 Capital notes or debentures issued by insured nonmember banks are subject to the retirement provisions of section 18(i)(1) of the Federal Deposit Insurance Act whether or not such capital notes or debentures are exempt from the provisions of Part 329. 18 The term "mutual savings bank" is as defined in § 329.7(a) of this Part. 18b While not necessary conditions prece dent to securing or retaining the exemption afforded by subsection (b)(5) of this Section, the following conditions apply to any insured nonmember mutual savings bank that is seeking the benefit of the exemption (i) The obligation is in writing; (ii) It is unsecured; (iii) It has an original maturity of not more than nine months (or 270 days); (iv) The amount of the obligation is at least $100,0000;1 18c (v) It expressly states that it will not bear interest after maturity except where the issuer fails to pay the obligation at maturity (including accelerated maturity following default) in accordance with its terms; (vi) It includes the following statement which must be presented in a clear and conspicuous manner: "This obligation is not a deposit and is not insured, in whole or in part, by the Federal Deposit Insurance Corporation"; (vii) It includes the following statement: "No fractional interest in this obligation, in contrast to the entire obligation, may be offered or sold to the public by the issuer or anyone authorized by the issuer to act on its behalf." "" 18d and FDIC reserves the right to curtail the bank's authority to issue additional exempt obligations if it does not adhere to these conditions: (1) The proceeds of all exempt obligations shall be used only for "current transactions". The term "current transactions" has the same meaning as in Section 3(a)(3) of the Securities Act of 1933 (15 U.S.C. 77c(a)(3)) and interpretations of the Securities and Exchange Commission thereunder. (2) The issuing bank will not offer or sell, or authorize anyone else to offer or sell, any part of an exempt obligation (i.e., a participation amounting to less than $100,000) to the public. (3) The issuing bank will not enter into any form of arrangement or understanding with prospective purchasers whereby the issuing bank undertakes to pay its exempt obligations before the original maturity stated therein (other than following an event of default so long as all such events of default are spelled out in the exempt obligation). 18c The face amount of the obligation may be as low as $100,000 even though it is to be sold at a discount. Upon partial payment, a certificate for the amount of the obligation still outstanding may be issued in substitution for the original obligation so long as the original maturity of the obligation is not extended. 18d In the case of negotiable obligations, the issuer is not required to place a restrictive legend on the obligation so long as the issuer complies with the restriction and pro [35 FR 18314, Dec. 2, 1970, as amended at 36 FR 3112, Feb. 18, 1971; 38 FR 16347, June 22, 1973; 41 FR 24978, June 22, 1976; 41 FR 30008, July 21, 1976; 43 FR 20223, May 11, 1978; 44 FR 46266, Aug. 7, 1979; 45 FR 8939, Feb. 11, 1980; 45 FR 13726, Mar. 3, 1980] § 329.101 Computation and payment of interest on time and savings deposits. The Board of Directors of the Federal Deposit Insurance Corporation has adopted the following position concerning the methods of computing interest on time and savings deposits. (a) The maximum rate of simple interest that an insured nonmember bank may pay on a deposit is established by §§ 329.6 and 329.7 of the rules and regulations of the Federal Deposit Insurance Corporation. In January 1970, the Federal Deposit Insurance Corporation established certain rates on deposits with a maturity of "1 year or more.” To qualify for the maximum rate that may be paid on such a deposit, the deposit must not mature before 1 full year, 365 or 366 days as the case may be, from the date of deposit. 19 (b) Section 329.3(e) of the Corporation's regulations has been amended to authorize the use of 360 or 365 days (or 366 in a leap year) as the basis for computing interest on time or savings deposits, regardless of the actual number of days the funds earn inter vides FDIC with satisfactory assurances that those acting for it or on its behalf will do so as well (see footnote 18b). 19 Part 329 of the Corporation's regulations prescribes certain maximum interest rates for consumer-type time deposits (i.e., deposits of less than $100,000) with maturity intervals of 14 days or more and 90 days or more. Deposits that mature 1 month from the date of deposit or at 1-month intervals normally cover a period of at least 30 days. Deposits that mature 3 months from the date of deposit or at 3-month intervals normally cover a period of at least 90 days. However, if the date of deposit is in February such deposits will mature 28 days or 89 days, respectively, from the date of deposit in years other than leap years. The Board of Directors regards this de minimis departure from the 30- or 90-day interval required for payment of interest at the applicable maximum rate as justified on grounds of fairness and mathematical simplicity. est. 20 For example, in computing interest on a 295-day deposit, the bank could use the fraction 295/360 or 295/365 or 295/366 if a leap year. On a 360-day deposit the fraction could be 36360 or 360/365 or 36366 if a leap year. On a 365day deposit the fraction may exceed a value of 1, i.e. 365/360. Additionally, § 329.3(e) authorizes 1 month, or multiples thereof, to be figured as 30 days, or multiples thereof, for interest computation purposes. For example, for a deposit made February 1 for 1 month, the fraction could be 30360 or 3365 or 28/360 or 28/365, etc. [37 FR 10341, May 20, 1972, as amended at 45 FR 72109, Oct. 31, 1980] APPENDIX A-FOREIGN, INTERNATIONAL AND SUPRANATIONAL ENTITIES DESIGNATED AS EXEMPT FROM § 329.6 EUROPE Bank for International Settlements. European Atomic Energy Community. European Coal and Steel Community. The European Communities. European Development Fund. European Economic Community. European Free Trade Association. European Fund. European Investment Bank. LATIN AMERICA Andean Development Corporation. gration. The Central American Institute for Indus- East Carribbean Common Market. 20 Interest may not be computed or paid on time deposits after maturity or the expiration of the period of notice given with respect to the repayment thereof, except in the case of deposits which are renewed within 10 days thereafter (§ 329.3(f)). This is true even where the funds remain on deposit for a longer period of time. Consequently, interest must be computed on the number of days the funds are actually eligible to earn interest and not necessarily on the number of days the funds remain on deposit. For the purpose of this Part 330 the term "insured bank" includes an insured branch of a foreign bank. [44 FR 40059, July 9, 1979] § 330.1 General principles applicable in determining insurance of deposit accounts. (a) General. This Part 330 provides for determination by the Corporation of the insured depositors of an insured bank and the amount of their insured deposit accounts. The rules for determining the insurance coverage of deposit accounts maintained by depositors in the same or different rights and capacities in the same insured bank are set forth in the following provisions of this part. Insofar as rules of local law enter into such determinations, the law of the jurisdiction in │which the insured bank's principal office is located shall govern, except where the insured bank is an insured branch of a foreign bank, in which case the law of the jurisdiction where the insured branch is located shall govern. (b) Records. (1) The deposit account records of the insured bank shall be conclusive as to the existence of any relationship pursuant to which the funds in the account are deposited and on which a claim for insurance coverage is founded. Examples would be trustee, agent, custodian or executor. No claim for insurance based on such a relationship will be recognized in the absence of such disclosure. (2) If the deposit account records of an insured bank disclose the existence of a relationship which may provide a basis for additional insurance, the details of the relationship and the interests of other parties in the account must be ascertainable either from the records of the bank or the records of the depositor maintained in good faith and in the regular course of business. (3) The deposit account records of an insured bank in connection with a trust account shall disclose the name of both the settlor (grantor) and the trustee of the trust and shall contain an account signature card executed by the trustee. (4) The interests of the co-owners of a joint deposit account shall be deemed equal, unless otherwise stated on the insured bank's records in the case of a tenancy in common. (c) Valuation of trust interests. (1) Trust interests in the same trust deposited in the same account will be separately insured if the value of the trust interest is capable of determination, without evaluation of contingencies, except for those covered by the present worth tables and rules of calculation for their use set forth in § 20.2031-7 of the Federal Estate Tax Regulations (26 CFR 20.2031-7). Notwithstanding the foregoing, in connection with pension and other trusteed employee benefit funds (including those qualifing under section 401(d) or section 408(a) of the Internal Revenue Code of 1954), the trust interest of each participant shall be evaluated for insurance purposes as if the interest of such participant had fully vested as of the date the insured bank was closed on account of inability to meet the demands of its depositors. (2) In connection with any trust in which certain trust interests are not capable of evaluation in accordance with the foregoing rule, payment by the Corporation to the trustee with respect to all such trust interests shall not exceed the basic insured amount of $100,000. (3) Each trust interest in any trust established by two or more settlors shall be deemed to be derived from each settlor pro rata to his contribution to the trust. (4) The term "trust interest" means the interest of a beneficiary in an irrevocable express trust, whether created by trust instrument or statute, but does not include any interest retained by the settlor. Notwithstanding the foregoing, any allocable interest created pursuant to an employee benefit plan, including a plan qualified under 401(d) or section 408(a) of the Internal Revenue Code of 1954, as amended, shall be deemed to be a trust interest. (5) With respect to trust funds held by an insured bank in a fiduciary capacity pursuant to section 7(i) of the Act, the term "trust interest" shall mean the same as the term "trust funds" as used in section 3(p) of the Act. (d) Insured branches of foreign banks. (1) Except as provided in § 330.1(d)(3) deposits in an insured branch of a foreign bank which are payable in the United States shall be insured in accordance with the rules of this part. (2) Deposits held by an insured depositor in any insured branch or insured branches of the same foreign bank shall be added together for deposit insurance purposes. (3) Deposits to the credit of the foreign bank or any office, branch or agency of and wholly owned (except for a nominal number of directors' shares) subsidiary of the foreign bank shall not be insured. [32 FR 10408, July 14, 1967, as amended at 35 FR 460, Jan. 14, 1970; 39 FR 41359, Nov. 27, 1974; 43 FR 10683, Feb. 15, 1978; 43 FR 58081, Dec. 12, 1978; 44 FR 40059, July 9, 1979; 45 FR 23645, Apr. 8, 1980] owned by an individual (or by the community between husband and wife of which the individual is a member) and deposited in one or more deposit accounts in his own name shall be insured up to $100,000 in the aggregate. (b) Accounts held by agents or nominees. Funds owned by a principal and deposited in one or more deposit accounts in the name or names of agents or nominees shall be added to any individual deposit accounts of the principal and insured up to $100,000 in the aggregate. (c) Accounts held by guardians, custodians, or conservators. Funds held by a guardian, custodian, or conservator for the benefit of his ward or for the benefit of a minor under a Uniform Gifts to Minors Act and deposit ed in one or more deposit accounts in the name of the guardian, custodian, or conservator shall be added to any individual deposit accounts of the ward or minor and insured up to $100,000 in the aggregate. [32 FR 10408, July 14, 1967, as amended at 35 FR 460, Jan. 14, 1970; 39 FR 41359, Nov. 27, 1974; 45 FR 23645, Apr. 8, 1980] § 330.3 Testamentary accounts. (a) Funds owned by an individual and deposited in a revocable trust account, tentative or "Totten" trust account, "payable-on-death" account or similar account evidencing an intention that on his death the funds shall belong to his spouse, child or grandchild shall be insured up to $100,000 in the aggregate as to each such named beneficiary, separately from any other accounts of the owner. (b) If the named beneficiary of such an account is other than the owner's spouse, child or grandchild, the funds in such account shall be added to any individual accounts of such owner and insured up to $100,000 in the aggregate. [32 FR 10408, July 14, 1967, as amended at 35 FR 460, Jan. 14, 1970; 39 FR 41359, Nov. 27, 1974; 45 FR 23646, Apr. 8, 1980] § 330.4 Accounts held by executors or administrators. Funds of a decedent held in the name of the decedent or in the name of the executor or administrator of his estate and deposited in one or more deposit accounts shall be insured up to $100,000 in the aggregate, separately from the individual deposit accounts of the beneficiaries of the estate or of the executor or administrator. [32 FR 10408, July 14, 1967, as amended at 35 FR 460, Jan. 14, 1970; 39 FR 41359, Nov. 27, 1974; 45 FR 23646, Apr. 8, 1980] § 330.5 Accounts held by a corporation or partnership. (a) Deposit accounts of a corporation or partnership engaged in any independent activity shall be insured up to $100,000 in the aggregate. A deposit account of a corporation or partnership not engaged in an independent activity shall be deemed to be owned by the person or persons owning such S M |