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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.

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Presentation on theme: "Lines A1c and A2 Transaction Accounts What is a transaction account? –Transfers or Withdrawals through: ATMs Checks Debit Cards –Unlimited amount of."— Presentation transcript:

1

2 Lines A1c and A2

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

4 Transaction Accounts Always regarded as transaction accounts: –Demand Deposits –NOW Accounts –Share Draft Accounts –ATS (automatic transfer service) Accounts

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

6 Line A1C (Other Demand Deposits) Include: –Official Checks Cashiers Checks Tellers Checks Money Orders Travelers Checks or Tellers Checks whose funds have not cleared

7 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

8 Line A1C (Other Demand Deposits) Escrow Accounts –Withdrawn within 6 days from date of deposit Not qualifying non-transaction accounts –Time deposits Early withdrawal Matured –Savings accounts which allow transaction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

9 Line A1C (Other Demand Deposits) Exclude: –Escrow Funds held in DIs 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)

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

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

12 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 ATMs Remote Service Unit

13 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

14 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

15 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.

16 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

17 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

18 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.

19 Where do these accounts go? IOLTA Checking Account Jane Does overdrawn checking account Girl Scouts interest bearing checking account Lisas share draft account at ZY Credit Union Line ItemAccount Holder A2 A1c A1c/A2 A2 Quality Inc. Checking Account

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

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

22 Legitimate Differences Savings and Loans FR2900>OTS 1313 –Primary Obligations –Tellers Checks FR2900

23 Legitimate Differences Credit Unions FR2900>NCUA 5300 –Share Draft accounts that exceed transaction limits or are not monitored FR2900

24 Lines A1C and A2 Questions????


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