Source: http://www.law.cornell.edu/cfr/text/12/31/appendix-A?quicktabs_7=1
Timestamp: 2013-12-10 05:32:45
Document Index: 721020997

Matched Legal Cases: ['art 31', 'art 31', 'art 223', 'art 223', '§ 223', 'art 223']

12 CFR 31, Appendix A to Part 31 - Interpretations: Deposits Between Affiliated Banks | Title 12 - Banks and Banking | Code of Federal Regulations | LII / Legal Information Institute
12 CFR 31, Appendix A to Part 31 - Interpretations: Deposits Between Affiliated Banks
a. General rule. A deposit made by a bank in an affiliated bank is treated as a loan or extension of credit to the affiliate bank under 12 U.S.C. 371c, as this statute is implemented by the Federal Reserve Board's Regulation W, 12 CFR qart 223. Thus, unless an exemption from Regulation W is available, these deposits must be secured in accordance with 12 CFR 223.14. However, a national bank may not pledge assets to secure private deposits unless otherwise permitted by law (see, e.g., 12 U.S.C. 90 (permitting collateralization of deposits of public funds); 12 U.S.C. 92a (trust funds); and 25 U.S.C. 156 and 162a (Native American funds)). Thus, unless one of the exceptions to 12 CFR qart 223 noted in paragraph b. of this interpretation applies, unless another exception applies that enables a bank to meet the collateral requirements of § 223.14, or unless a party other than the bank in which the deposit is made can legally offer and does post the required collateral, a national bank may not:
b. Exceptions. The restrictions of 12 CFR qart 223 (other than 12 CFR 223.13, which requires affiliate transactions to be consistent with safe and sound banking practices) do not apply to deposits:
1. Made in an affiliated depository institution or affiliated foreign bank provided that the deposit represents an ongoing, working balance maintained in the ordinary course of correspondent business. See
12 CFR 223.42(a); or