date display is required. Additional savings association signs in other sizes, colors, or materials, may be displayed in other locations within an insured savings association. An insured savings association may display the official savings association sign at a remote service facility, provided that if there are any noninsured institutions which share in the remote service facility, any insured savings association which displays the sign must clearly show that the official savings association sign refers only to a designated insured savings association or associations.

(b) Obtaining official savings association signs. (1) Any insured savings association may procure official savings association signs with black letters, stars, and eagle, on a gold background from the Corporation for official use at no charge. The Corporation shall furnish to savings associations an order blank for use in procuring the official savings association sign. Any savings association which promptly, after the receipt of the order blank, fills it in, executes it, and properly directs and forwards it to the Federal Deposit Insurance Corporation, Washington, DC 20429, shall not be deemed to have violated this regulation on account of not displaying an official savings association sign, or signs, unless the savings association shall omit to display such official sign or signs after receipt thereof.

(2) Official savings association signs or signs reflecting variations in size, colors, or materials may be procured by insured savings associations from commercial suppliers.

(c) Receipt of deposits at same teller's station or window as noninsured institution. An insured savings association is forbidden to receive deposits at any teller's station or window except a remote service facility as defined in §303.0(b)(18) of this chapter, where any noninsured institution receives deposits or similar liabilities.

(d) Required changes in official sign. The Corporation may require any insured savings association upon at least 30 days' written notice, to change the wording of its official signs in a manner deemed necessary for the protection of depositors or others.

This part applies to any deposit which is payable by a bank within the States of the United States or the District of Columbia, or which is directly or indirectly accessible by check, draft, or order payable within the States of the United States or the District of Columbia, which check, draft or order is drawn on an account maintained at a bank office located within the States of the United States or the District of Columbia. An international banking facility time deposit, as defined by the Board of Governors of the Federal Reserve System in § 204.8(a)(2) of this title, is not a deposit within the meaning of this part.

(a) The term bank includes:

(1) Any State bank, as defined in section 3(a) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(a), the deposits in which are insured by the Corporation, and which is not a member of the Federal Reserve System;

(2) Any State branch of a foreign bank, the deposit obligations in which branch are insured by the Corporation; and

(3) Any noninsured bank in a State if the total amount of time and savings deposits held in all such banks in the

State, plus the total amount of deposits, shares, and withdrawable accounts held in all building and loan, savings and loan, and homestead associations (including cooperative banks) in the State which are not members of a Federal home loan bank, is more than 20 per centum of the total amount of such deposits, shares, and withdrawable accounts held in all banks and building and loan, savings and loan, and homestead associations (including cooperative banks) in the State.

(b) The term demand deposit includes: (1) Any deposit that has a maturity or required-notice period of less than seven days;

(2) Any deposit regarding which the bank does not reserve the right to require at least seven days' written notice prior to withdrawal or transfer of any funds from the account; or

a

(3) Any other deposit from which, under the terms of the deposit contract, the depositor is authorized to make, during any month or statement cycle of at least four weeks, more than six transfers by means of preauthorized or automatic transfer or telephonic (including data transmission) agreement, order or instruction, which transfers are made to another account of the depositor at the same bank, to the bank itself, or to a third party:

Provided, That any deposit specified in this paragraph (b)(3) will be deemed to be a demand deposit if more than three of the six authorized transfers are authorized to be made by check, draft, debit card or similar order made by the depositor;

And provided further, That no deposit specified in this paragraph (3) will be deemed to be a demand deposit if the entire beneficial interest of the deposit is held by a depositor identified in paragraph (2) of section 2(a) of Pub. L. 93100 (12 U.S.C. 1832(a)(2)).1

1 Paragraph (1) of 12 U.S.C. 1832(a) authorizes banks to let certain depositors make withdrawals from interest-bearing deposits by negotiable or transferable instruments for the purpose of making transfers to third parties-i.e., to hold deposits commonly called NOW accounts.

Paragraph (2) of 12 U.S.C. 1832(a) provides: "Paragraph (1) shall apply only with respect to deposits or accounts which consist solely

(c) The term interest means any payment to or for the account of any depositor as compensation for the use of funds constituting a deposit. A bank's absorption of expenses incident to providing a normal banking function or its forbearance from charging a fee in connection with such a service is not considered a payment of interest.

[51 FR 10808, Mar. 31, 1986, as amended at 53 FR 47523, Nov. 23, 1988]

§ 329.2 Payment of interest.

No bank shall, directly or indirectly, by any device whatsoever, pay interest on any demand deposit.

§ 329.101 Transfers not included within the six transfers allowed for nondemand deposits pursuant to § 329.1(b)(3).

This interpretive rule describes certain transfers that are not included as any of the six transfers allowed pursuant to § 329.1(b)(3).

(a) Transfers from a deposit described in §329.1(b)(3) that are made to the bank are not deemed to be included within the six transfers permitted for a nondemand deposit by that paragraph (3) when the transfers are made for the purpose of repaying loans and associated expenses at the bank (as originator or servicer). This exemption does not apply to transfers to the bank that are made for the purpose of repaying loans that are made by the bank to the depositor's demand account for the purpose of covering overdrafts.

(b) Transfers from a deposit described in §329.1(b)(3) that are made to another account of the same depositor at the bank are not deemed to be included within the six transfers permitted for a nondemand deposit by that paragraph

of funds in which the entire beneficial interest is held by one or more individuals or by an organization which is operated primarily for religous, philanthropic, charitable, educational, political, or other similar purposes and which is not operated for profit, and with respect to deposits of public funds by an officer, employee, or agent of the United States, any State, county, municipality, or political subdivision thereof, the District of Columbia, the Commonwealth of Puerto Rico, American Samoa, Guam, any territory or possession of the United States, or any political subdivision thereof.

(3) when the transfers are made by mail, messenger, automated teller machine or in person.

(c) Withdrawals from a deposit described in § 329.1(b)(3) are not deemed to be included within the six transfers permitted for a nondemand deposit by that paragraph (3) when the withdrawals are made by mail, messenger, telephone (via check mailed to the depositor), automated teller machine, or in person.

§ 329.102 Deposits described § 329.1(b)(3).

in

This interpretive rule explains the second proviso of § 329.1(b)(3).

(a) No deposit described in §329.1(b)(3) that is held by an organization that is not organized for profit and that is described in paragraphs 501(c) (3) through (13) and (19) and section 528 of the Internal Revenue Code of 1954 (26 U.S.C. 501(c) (3) through (13) and (19), and 528) is deemed to be a demand deposit. Actual Internal Revenue Service documentation of the organization's tax-exempt status is not required; it is merely an aid in making the determination.

(b) No deposit described in §329.1(b)(3) that is held by a depositor identified in section 2(a)(2) of Pub. L. 93-100 (12 U.S.C. 1832(a)(2))—whether the deposit is used for business purposes or otherwise is deemed to be a demand deposit.

(c) No deposit described in §329.1(b)(3) that represents funds held in a fiduciary capacity (whether the fiduciary is a natural person or otherwise) is deemed to be a demand deposit if all the beneficiaries of the account are natural persons.

§ 329.103 Premiums.

This interpretive rule describes certain payments that are not deemed to be interest as defined in § 329.1(c).

(a) Premiums, whether in the form of merchandise, credit, or cash, given by a bank to the holder of a deposit will not be regarded as interest as defined in § 329.1(c) if:

(1) The premium is given to the depositor only at the time of the opening of a new account or an addition to an existing account;

(2) No more than two premiums per deposit are given in any twelve-month

interval; and (3) the value of the premium (in the case of merchandise, the total cost to the bank, including shipping, warehousing, packaging, and handling costs) does not exceed $10 for a deposit of less than $5,000 or $20 for a deposit of $5,000 or more.

(b) The costs of premiums may not be averaged.

(c) A bank may not solicit funds for deposit on the basis that the bank will divide the funds into several accounts for the purpose of enabling the bank to pay the depositor more than two premiums within a twelve-month interval on the solicited funds.

(d) The bank must retain sufficient information for examiners to determine that the requirements of this section have been satisfied.

(e) Notwithstanding paragraph (a) of this section, any premium that is not, directly or indirectly, related to or dependent on the balance in a demand deposit account and the duration of the account balance shall not be considered the payment of interest on a demand deposit account and shall not be subject to the limitations in paragraph (a) of this section.

[51 FR 10808, Mar. 31, 1986, as amended at 62 FR 40732, July 30, 1997]

§ 329.104 Ten-day grace period.

This interpretive rule provides for 10day grace periods during which interest may be paid on a deposit without violating §329.2.

(a) During the ten calendar days following the maturity of a time deposit, the bank may continue to pay interest on the matured deposit at the contract rate of the deposit, or at any lesser rate, if the deposit contract provides for such post-maturity interest. The payment of such post-maturity interest will not be regarded as the payment of interest on a demand deposit.

(b) If a time deposit is renewed within ten calendar days after maturity, the renewed deposit may be dated back to the maturity date of the matured deposit and may draw interest from that date. The payment of such additional interest will not be regarded as the payment of interest on a demand deposit.

(c) If a time or savings deposit is renewed within ten days after expiration

of the period of notice given with respect to its repayment, the renewed deposit may draw interest from the date such notice period expired. The payment of such additional interest will not be regarded as the payment of interest on a demand deposit.

PART 330-DEPOSIT INSURANCE COVERAGE

Sec.

330.1 Definitions.

330.2 Authority and purpose.

330.3 General principles.

330.4 Recognition of deposit ownership and recordkeeping requirements.

330.5 Single ownership accounts.

330.6 Accounts held by an agent, nominee, guardian, custodian or conservator.

330.7 Joint ownership accounts. 330.8

Revocable trust accounts.

330.9 Accounts of a corporation, partnership or unincorporated association. 330.10 Accounts held by a depository institution as the trustee of an irrevocable trust.

330.11 Irrevocable trust accounts. 330.12 Retirement and other employee bene

fit plan accounts.

330.13 Bank investment contracts. 330.14 Public unit accounts.

330.15 Notice to depositors. 330.16

Effective dates.

AUTHORITY: 12 U.S.C. 1813(1), 1813(m), 1817(1), 1818(q), 1819[Tenth], 1820(f), 1821(a), 1822(c).

SOURCE: 55 FR 20122, May 15, 1990, unless otherwise noted.

§ 330.1 Definitions.

For the purposes of this part:

(a) Act means the Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.).

(b) Default has the same meaning as provided under section 3(x) of the Act (12 U.S.C. 1813(x)).

(c) Deposit has the same meaning as provided under section 3(1) of the Act (12 U.S.C. 1813(1)).

(d) Deposit account records means account ledgers, signature cards, certificates of deposit, passbooks, corporate resolutions authorizing accounts in the possession of the insured depository institution and other books and records of the insured depository institution, including records maintained by computer, which relate to the insured depository institution's deposit taking function, but does not mean account

statements, deposit slips, items deposited or cancelled checks.

(e) FDIC means the Federal Deposit Insurance Corporation.

(f) Insured deposit has the same meaning as that provided under subsection 3(m)(1) of the Act (12 U.S.C. 1813(m)(1)).

(g) Insured depository institution is any depository institution whose deposits are insured pursuant to the Act, including a foreign bank having an insured branch.

(h) Insured branch means a branch of a foreign bank any deposits in which are insured in accordance with the provisions of the Act.

(i) Natural person means a human being.

(j) Trust funds means funds held by an insured depository institution as trustee pursuant to any irrevocable trust established pursuant to any statute or written trust agreement.

(k) Trust estate means the determinable and beneficial interest of a beneficiary or principal in trust funds but does not include the beneficial interest of an heir or devisee in a decedent's estate.

[55 FR 20122, May 15, 1990, as amended at 58 FR 29963, May 25, 1993]

§ 330.2 Authority and purpose.

Section 311 of the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA), Pub. L. 102-242, 105 Stat. 2236, amended sections 3, 7 and 11 of the Federal Deposit Insurance Act (FDI Act), 12 U.S.C. 1813, 1817 and 1821, which govern the amount of deposit insurance provided by the FDIC. Section 311 of FDICIA deleted the provision in section 3 of the Federal Deposit Insurance Act which authorized the FDIC to clarify and define, by regulation, the extent of deposit insurance coverage resulting from subsections 3(m)(1), 3(p), 7(i) and 11(a) of the FDI Act, 12 U.S.C. 1813(m)(1), 1813(p), 1817(i) and 1821(a) and to define the terms used in those sections. However, FDICIA did not change the FDIC's authority, in section 9 [Tenth] of the FDI Act, to prescribe by its Board of Directors such rules and regulations as it may deem necessary to carry out the provisions of the FDI Act or of any other law which it has the responsibility of administering or enforcing (except to the

extent that authority to issue such rules and regulations has been expressly and exclusively granted to any other regulatory agency). Moreover, in section 302(d) of FDICIA, Congress added a new subsection to section 10 of the FDI Act which provides that except to the extent that authority under the FDI Act is conferred on any of the Federal banking agencies other than the Corporation, the Corporation may prescribe regulations to carry out the FDI Act and by regulation define terms as necessary to carry out the FDI Act. The purpose of the regulations in this part is to clarify the rules and define the terms employed in affording deposit insurance coverage under the Act and provide rules for the recognition of deposit ownership in various circumstances.

[58 FR 29963, May 25, 1993]

§ 330.3 General principles.

(a) Ownership rights and capacities. The insurance coverage provided by the Act and the regulations in this part is based upon the ownership rights and capacities in which deposit accounts are maintained at insured depository institutions. All deposits in an insured depository institution which are maintained in the same right and capacity (by or for the benefit of a particular depositor or depositors) shall be added together and insured in accordance with the regulations in this part. Deposits maintained in different rights and capacities, as recognized under this part, shall be insured separately from each other.

(b) Deposits maintained in separate insured depository institutions or in separate branches of the same insured depository institution. Any deposit accounts maintained by a depositor at one insured depository institution are insured separately from, and without regard to, any deposit accounts that the same depositor maintains at any other separately chartered and insured depository institution, even if two or more separately chartered and insured depository institutions are affiliated through common ownership. The deposit accounts of a depositor maintained in the same right and capacity at different branches or offices of the same insured depository institution are

not separately insured; rather they shall be added together and insured in accordance with the regulations in this part.

(c) Deposits maintained by foreigners and deposits denominated in foreign currency. The availability of deposit insurance is not limited to citizens and residents of the United States. Any person or entity that maintains deposits in an insured depository institution is entitled to the deposit insurance provided by the Act and the provisions of this part. In addition, deposits denominated in a foreign currency shall be insured in accordance with the provisions of this part. Deposit insurance for such deposits shall be determined and paid in the amount of United States dollars that is equivalent in value to the amount of the deposit denominated in the foreign currency as of close of business on the date of default of the insured depository institution. The exchange rates to be used for such conversions are the 12 PM rates (the noon buying rates for cable transfers) quoted for major currencies by the Federal Reserve Bank of New York on the date of default of the insured depository institution, unless the deposit agreement specifies that some other widely recognized exchange rates are to be used for all purposes under that agreement, in which case, the rates so specified shall be used for such conversions.

(d) Deposits in insured branches of foreign banks. Deposits in an insured branch of a foreign bank which are payable by contract in the United States shall be insured in accordance with the provisions of this part, except that any deposits to the credit of the foreign bank, or any office, branch, agency or any wholly owned subsidiary of the foreign bank, shall not be insured. All deposits held by a depositor in the same right and capacity in more than one insured branch of the same foreign bank shall be added together for the purpose of determining the amount of deposit insurance.

(e) Deposits payable solely outside of the United States. Any obligation of an insured depository institution which is payable solely at an office of such institution located outside the States of