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Lines A1c and A2

Lines A1c and A2 Transaction Accounts What is a transaction account? Transfers or Withdrawals through: ATMs Checks Debit Cards Unlimited amount of transactions Transaction Accounts Always regarded as transaction accounts: Demand Deposits NOW Accounts Share Draft Accounts

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Lines A1c and A2

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  1. Lines A1c and A2

  2. Transaction Accounts • What is a transaction account? • Transfers or Withdrawals through: • ATMs • Checks • Debit Cards • Unlimited amount of transactions

  3. Transaction Accounts • Always regarded as transaction accounts: • Demand Deposits • NOW Accounts • Share Draft Accounts • ATS (automatic transfer service) Accounts

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

  5. 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

  6. 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

  7. Line A1C (Other Demand Deposits) • Escrow Accounts • Withdrawn within 6 days from date of deposit • Not qualifying non-transaction accounts • Time deposits • Early withdrawal • Matured • Savings accounts which allow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

  8. 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)

  9. Line A1C (Other Demand Deposits) • Common reporting errors: • Reporting Overdrawn Accounts • Failure to report • Unposted Credits • Suspense Accounts • Official Checks

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

  11. 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

  12. Eligible to hold NOW accounts: Individuals or Sole Proprietorships Nonprofit Organizations Domestic Government Units IOLTA Line A2 (ATS, NOW/Share Drafts, and Telephone and Preauthorized transfers)

  13. 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

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

  15. 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

  16. 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

  17. 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.

  18. 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

  19. Things To Consider 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

  20. Legitimate DifferencesCommercial Banks • FR2900>FFIEC031/041 • Primary Obligations • Teller Checks • Commingled Trust Accounts

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

  22. Legitimate DifferencesCredit 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

  23. Lines A1C and A2 Questions????

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