Lines A1c and A2

Transaction Accounts What is a transaction account? Transfers or Withdrawals through: ATMs Checks Debit Cards Unlimited amount of transactions Unlimited amount of transactions as opposed to savings and time deposits which will be covered later

Transaction Accounts Always regarded as transaction accounts: Demand Deposits NOW Accounts Share Draft Accounts ATS (automatic transfer service) Accounts **Share draft accounts is a share account from which funds may be withdrawn or transferred to third parties by issuance of a negotiable or transferable instrument or other order.**** Similar to checking accounts, but held at credit unions.

Line A1C (Other Demand Deposits) Include deposits held for : Individuals, Partnerships, Corporations, State & Local Governments Foreign Governments and International Institutions US Government Agencies

Line A1C (Other Demand Deposits) Include: Official Checks Cashier’s Checks Teller’s Checks Money Orders Traveler’s Checks or Teller’s Checks whose funds have not cleared See page 14 & 15 of 2900 instructions Give the difference between cashiers and travelers checks page 32 #4 Cashier’s checks have no float b/c written on D1 Teller’s checks have float because they’re payable through a 3rd party. Cashiers checks do not go through travelers express Primary Obligations mature or are demandable in less than seven days

Line A1C (Other Demand Deposits) Primary Obligations Mature/Demandable in less than 7 days Money Orders drawn on the bank and outstanding on the report date Unposted Credits Suspense Accounts Time deposits-must meet Reg. D requirements (simple interest and seven days) Page 33 #13

Line A1C (Other Demand Deposits) Escrow Accounts Withdrawn within 6 days from date of deposit Not qualifying non-transaction accounts Time deposits Early withdrawal Matured Savings accounts which allow transaction limits to be exceeded Only include those escrow accounts setup as transaction accounts Page 17 Refer to Treatment of Trust Funds

Line A1C (Other Demand Deposits) Exclude: Escrow Funds held in DI’s Trust Department Overdrawn Accounts (report as zero) Deposits due to Depository Institutions (A1a) Deposits due to U.S. Government (A1b) Savings Deposits (C1) Time Deposits (D1/F1)

Line A1C (Other Demand Deposits) Common reporting errors: Reporting Overdrawn Accounts Failure to report Unposted Credits Suspense Accounts Official Checks Official checks such as traveler’s checks, money orders, cashier’s checks, teller’s checks)

Line A2 (ATS, NOW/Share Drafts, and Telephone and Preauthorized transfers)

Line A2 (ATS, NOW/Share Drafts, and Telephone and Preauthorized transfers) Include: Interest Bearing Checking Accounts (NOW) Automatic Transfer Service Accounts (ATS) Telephone and Preauthorized Transfer Accounts Share Drafts (for Credit Unions) Meet the definition of a time deposit Allow payments to be made by third-parties Debit Cards ATM’s Remote Service Unit NOW accounts should not be confused with NINOW accounts which go in A1C and do not require advanced notice of withdrawal.

Line A2 (ATS, NOW/Share Drafts, and Telephone and Preauthorized transfers) Eligible to hold NOW accounts: Individuals or Sole Proprietorships Nonprofit Organizations Domestic Government Units IOLTA As long as institution reserves right to require 7 days advance notice. Nonprofit organizations Philanthropic Religious Educational Political; Ineligible organizations which have been permitted to deposit funds into a NOW account that is held in connection with an IOLTA

Line A2 (ATS, NOW/Share Drafts, and Telephone and Preauthorized transfers) Automatic Transfer Service Accounts (ATS) Overdraft protection Automatic payments to reporting institution Transfers made to an account to cover checks or drafts drawn on the reporting institution Transfers made to maintain a minimum account balance These are only for individuals and sole proprietorships 2nd bullet: these are NOT transfers to 3rd parties PROVIDE A VERBAL DECRIPTION OF AN ATS AND BULEET THE REST

Line A2 (ATS, NOW/Share Drafts, and Telephone and Preauthorized transfers) Oral or Written Arrangement Unlimited Withdrawals Predetermined Time or on a Fixed Schedule Example: Automatic bill payment services offered by the reporting institution. Oral/written between reporting institution and account holder to pay a 3rd party This contrasts with ATS accounts because those do not include transfers to 3rd parties

Line A2 (ATS, NOW/Share Drafts, and Telephone and Preauthorized transfers) Share Draft Accounts Interest and Non-Interest bearing accounts Withdrawable on demand Credit Union reserves the right to require up to 60 days prior notice of withdrawal Include only member accounts. Do not credit union’s account at another credit union. This goes in B1.

Line A2 (ATS, NOW/Share Drafts, and Telephone and Preauthorized transfers) Common reporting errors: Including ineligible non-personal accounts Including transaction accounts that do not require advance written notice of withdrawal Incorrect GL mapping into/out of A2 Corporate accounts are the biggest example of ineligible accounts, businesses are not allowed to receive interest on checking accounts. Incorrect GL mapping: Including accounts that should be in A1C or C1 in A2 or including accounts that should be in A2 in line A1C or C1

Line A2 (ATS, NOW/Share Drafts, and Telephone and Preauthorized transfers) IMPORTANT Account terms and disclosures must state that the institution reserves the right to require 7 days advance written notice of withdrawal. While these rights may not be exercised, not having them in the terms disqualifies them from being included in line A2.

Where do these accounts go? Line Item Account Holder A2 IOLTA Checking Account A1c Quality Inc. Checking Account Jane Doe’s overdrawn checking account A1c/A2 Girl Scouts interest bearing checking account A2 Lisa’s share draft account at ZY Credit Union A2

Things To Consider Line A1c or Line A2 Interest Bearing/ Non-Interest Bearing Advance Notice of Withdrawal Account Disclosures/Terms Line A1c or Line A2 Type of Financial Institution Account Holder General Ledger

Legitimate Differences Commercial Banks FR2900>FFIEC031/041 Primary Obligations Teller Checks Commingled Trust Accounts

Legitimate Differences Savings and Loans FR2900>OTS 1313 Primary Obligations Tellers Checks FR2900<OTS 1313 2900 excludes escrow accounts that DI keeps properly segregated as trust funds.

Legitimate Differences Credit Unions FR2900>NCUA 5300 Share Draft accounts that exceed transaction limits or are not monitored FR2900<NCUA 5300 2900 excludes balances at non-US branches of the credit union #1- these are included as share accounts on call

Lines A1C and A2 Questions????