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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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Presentation Transcript

Transaction accounts l.jpg
Transaction Accounts

  • What is a transaction account?

    • Transfers or Withdrawals through:

      • ATMs

      • Checks

      • Debit Cards

    • Unlimited amount of transactions


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Transaction Accounts

  • Always regarded as transaction accounts:

    • Demand Deposits

    • NOW Accounts

    • Share Draft Accounts

    • ATS (automatic transfer service) Accounts


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Line A1C (Other Demand Deposits)

  • Include deposits held for :

    • Individuals, Partnerships, Corporations, State & Local Governments

    • Foreign Governments and International Institutions

    • US Government Agencies


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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


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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


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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    • Withdrawn within 6 days from date of deposit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


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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)


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Line A1C (Other Demand Deposits)

  • Common reporting errors:

    • Reporting Overdrawn Accounts

    • Failure to report

      • Unposted Credits

      • Suspense Accounts

      • Official Checks



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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


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Eligible to hold NOW accounts: Preauthorized transfers)

Individuals or Sole Proprietorships

Nonprofit Organizations

Domestic Government Units

IOLTA

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


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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


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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.


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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


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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


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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.


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Where do these accounts go? Preauthorized transfers)

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


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Things To Consider Preauthorized transfers)

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


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Legitimate Differences Preauthorized transfers)Commercial Banks

  • FR2900>FFIEC031/041

    • Primary Obligations

    • Teller Checks

    • Commingled Trust Accounts


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Legitimate Differences Preauthorized transfers)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 l.jpg
Legitimate Differences Preauthorized transfers)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


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Lines A1C and A2 Preauthorized transfers)

Questions????


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