FR 2900 Reporting 2015-v2/media/files/event...LEDGER AVAILABLE COLLECTED 36. 9/30/2015 19 Due To/Due...

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Objectives

• Data Uses

• FR 2900 Item Definitions

• Edit Explanations

• Submitting FR 2900 Data

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• When you leave, you will:– Understand how your data contributes to implementation of monetary policy

– Have increased knowledge of reserve requirements and their relation to the FR 2900

– Relate Regulation D as the basis for reserve requirements and regulatory constraints for products or services

– Review instructions and evaluate your products and services for classification on the FR 2900

Objectives

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Deposit Reporting Frequencies

• FR 2900 Weekly

• FR 2900 Quarterly

• FR 2910a Annual

• Nonreporters

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Accurate FR 2900 data affects:

• FOMC Operations / Monetary Policy

• Calculation of Required Reserves

• Published Aggregate Data

• Reporting Frequency

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• Reserves can be added to or removed from the banking system by:

– System Open Market operations (implementing FOMC directives)

– Changing reserve ratios

– Discount Window lending

– Interest on reserves (IOR)

– TDF

Monetary Policy Tools

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Flow of FR 2900 Data

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Open Market DeskFRB NY

Projections Publications

Depository Institutions

Analysis Public

Senior Staff

F.O.M.C.

PublicationsReservesEconomicAnalysis

Federal Reserve Banks

Monetary & Reserves Projections

Processing Analysis

Board of Governors

FRB KC

Processing Analysis

Money Supply

• M1:

– Currency in circulation, plus various types of checking accounts, less cash items in process of collection

– Narrowest and most liquid measure of money, comprised of:

o Demand deposits (A.1.c)

o ATS, NOW Accounts (A.2)

o CIPC (B.2)

o Vault Cash (E.1)

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Money Supply

• M2:– In addition to M1 includes:

o Small denomination time deposits (< $100K)o Savings deposits, including MMDAs and non‐institutional money market mutual funds (MMMFs)

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M2 Deposits

• Transaction Accounts:

A.1.c (+)

A.2 (+)

E.1 (+)

B2 (‐)

• Savings and Small Time Deposits:

C.1 (+)

D.1 (+)

F.1 (‐)

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Reserve Requirements

• Reserve requirements are a percentage of a depository institution’s (DI) deposits that must be held either as cash in the ‘vault’ of the DI, or as balances on deposit with the Federal Reserve Bank or at a correspondent bank passed through to the Federal Reserve Bank

• Reserve requirements are one of the tools used by the Federal Reserve as a means to conduct monetary policy

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Reserve Equation

[A.3 ‐ (B.1 + B.2)] x (3% and/or 10%)

• Reserve Ratio

(<$14.5M exempt * 0%)($14.5M through $103.6M * 3%)(>$103.6M * 10%)

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Reservable Liabilities

• Net Transaction Accounts

Add:• A.1.a

• A.1.b

• A.1.c

• A.2

Subtract:• B.1

• B.2

• Non‐personal Savings and Time Deposits

BB.1

Currently

Reserved at

Zero %

+

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FR 2900 Reporting Criteria ‐ 2015

Reporting RequirementTotal Transactions, Total Savings

and Small time DepositsNet Transaction

Account

FR 2900 Weekly >= $325.4M > $14.5M

FR 2900 Weekly >= $1.824B

FR 2900 Quarterly < $325.4M > $14.5M

FR2910A >= $14.5M AND < $1.824B <= $14.5M

Non‐Reporter Total Deposits < $14.5M

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Deposits vs. Borrowings

• A deposit is defined by Regulation D as the unpaid balance of money or its equivalent received or held by a depository institution in the usual course of business

• In economic terms, deposits and borrowings are similar; however, they are different transactions from a legal and regulatory perspective

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FR 2900 Deposit Categories

• FR 2900 items are defined according to customer use (withdrawal restrictions)and volatility:– 3 Major categories:

o Transaction accounts (Demand/NOW)

o Savings deposits

o Time deposits

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Demand Deposits

• Are payable immediately on demandor

• Are issued with an original maturity or required notice period of less than (7) days

or

• Represent funds for which customers are not required by the institution to give at least (7) days written notice of an intended withdrawal

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Demand Deposits – Regulation Q

• Effective July 21, 2011, Regulation Q was repealed and allows interest to be paid on demand deposits

• Demand deposits that earn interest are reported in Other Demand, line A.1.c.

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Demand Deposits Due to DIs ‐ A.1.A

• Include:– U.S. and non‐U.S. offices of:

oCommercial and industrial banksoBankers' banksoMutual or stock savings banksoCredit Unions (including corporate centrals)oBranches and agencies of foreign bankso Edge and agreement corporationsoMerchant banks, discount houses, and similar foreign banking institutions

oDeposits in excess of pass‐through agreement

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Demand Deposits Due to DIs ‐ A.1.A

• Exclude:– Pass‐through balances of respondents (reserve balances of another

depository institution on deposit at the FRB – reserve requirements)– Excess balance accounts (limited‐purpose accounts)– Deposits of nonbanks:

o Trust departmentso Non‐deposit trust companies o Non‐depository affiliates o U.S. Government depository institutions

– Deposits of foreign offices of the reporting depository institution– Deposits of foreign central banking institutions– Overdrawn accounts

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U.S. Government Demand ‐ A.1.B

• Include:– Demand deposits of:

oPostmasteroTennessee Valley Authority and other Government owned corporations

oDisbursing officers of the Defense and Treasury departmentso Federal withholding and FICA taxes of reporting depository institution’s for their own employees

oMilitary post exchanges (PX’s)

– U.S. Treasury Tax and Loan account (TT&L)

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• Treasury Tax & Loan (TT&L):

– Collections of savings bond sales proceeds

– Collections of tax deposits from employers (Federal withholding and FICA)

• Results for either remittance or note option:

– TT&L deposits are shown on the FR 2900 for one business day only ‐ the day of receipt

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• Exclude:– Primary obligations to the U.S. Government– Demand deposits of government agencies that are reported in A.1.c.

– State and local government accounts, including withheld state and local taxes

– Overdrawn accounts


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Other Demand Deposits – A.1.C

• Demand Deposits:– Individuals, partnerships, and corporations– States and local governments and their political subdivisions

– U.S. government agencies and instrumentalities– Non‐deposit and limited purpose trust companies– Trust departments of the reporting depository institution

– If depository institution issues Commercial Paper

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• Demand Deposits:

– Non‐depository affiliates of the reporting depository institution or other DIs

– Foreign governments, including foreign official banking institutions (national and regional)

– International institutions:

o IMF, United Nations, NATO, European Union, Organization of American States, etc.

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• Also include in demand deposits:– ICS Demand– Outstanding certified, cashier’s, and official checks– Teller’s checks– Unposted credits– Suspense accounts– Withheld state & local taxes and insurance premiums– Escrow accounts that are demand deposits– Matured time deposits– Savings deposits where the customer is allowed to exceed

transfer limitations– Outstanding travelers’ checks and money orders

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• Teller’s check examples to include:– Teller's check is drawn on a zero balance account at another

DI; (report in A.1.c) until advised the item has been presented

– Teller's check is sold by but not drawn on the reporting depository institution (report in A.1.c until remitted)

• Teller’s check example to exclude:– Teller's check is drawn on the reporting depository

institution through an account where they routinely maintain sufficient balances to cover checks/drafts etc. at another DI (deduct from B.1)

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• Exclude:– NOW accounts– Primary obligations to foreigners (CC.1)– Overdrafts and accounts with negative balances:

o Overdrawn customer accounts should be regarded as loans

o Do not net against positive balances of other accounts held by the client

o For commingled trust accounts, do not net negative balance trust accounts against accounts with positive balances

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NOW And Share Draft Accounts – A.2

• NOW accounts (Negotiable Orders of Withdrawal):

– Transaction account, but different from demand accounts:

o Depository institution expressly reserves the right to require 7 days written notice before an intended withdrawal

o Eligibility is limited

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• Eligibility:– NOW and Telephone & Pre‐authorized Transfer Accounts:o Natural persons (individuals & sole proprietorships)o Nonprofit organizations operated for:

– Philanthropy, charity, or education

o U.S. Governmental units

– Share Drafts:o All credit union members

– ATS accounts (automatic transfer service):o Natural persons (individuals & sole proprietorships)

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• Ineligible for NOW accounts:

– Credit Unions

– Mutual insurance companies

– Crop financing organizations

– Farmer cooperatives (Co‐op)

– Commercial customers

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Transaction Accounts Exercise

• A. Tennessee Valley Authority

• B. Farmland Industries

• C. Citibank, NA, New York Office

• D. Barry’s personal account

• E. Community Federal Credit Union

• F. First Federal Savings & Loan Assn.

• G. Wal‐Mart

• H. Federal Home Loan Bank of Topeka

• I. College Kid X. ‐ Overdrawn account

• J. U.S. Treasury

• K. Barclays' Bank Intl., Ltd. ‐ London Office

• L. Blue Springs School District

A.1.b ‐ Govt. Corp.

A.1.c ‐ Corporation

A.1.a ‐ Dep. Inst.

A.1.c/A2 ‐ Individual



A.1.c ‐ Corporation

A.1.c ‐ Govt. Agency

A.1.b ‐ Govt. Corp.


A.2 – Now Acct.

Not Reported

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Demand Deposits Due From DIs in the U.S. – B.1

• Include:– Balances subject to immediate withdrawal from U.S. offices of banks or other depository institutions, including corporate central credit unions:o The correspondent depository institution does not reserve

the right to require 7 days notice before withdrawal of funds

– Report balance reflected on your depository institution’s books rather than the correspondent’s books

– Deposits in excess of pass‐through agreement

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• Exclude:– Not subject to immediate withdrawal (e.g., Savings and Time

deposits)– Due From:

o Federal Reserve Bankso Federal Home Loan Bankso NCUA central liquidity facilityo Non‐U.S. offices of DIs

– Cash items in process of collection (outgoing cash letter)– Overdrawn or negative (report as zero) ‐ DO NOT NET– Representing federal funds sold or reverse repurchase

agreements– Excess Balance Account (EBA)

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G/L – Due From DIs

Apple Bank $ 5,000

Kiwi Bank $(5,000)

Bankers Bank $ 2,000

FRB $ 4,000

FHLB $ 1,000

Total $ 7,000

Reported Amount $2,000 (often see on FR 2900)

• What should be reported?


LEDGER

AVAILABLE

COLLECTED

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Due To/Due From Reciprocaland Overdrawn Accounts

• Reciprocal balances (preferred treatment):

– Commercial Banks: Net reciprocal

– Other DIs: Gross reciprocal

• Overdrafts and accounts with negative balances:

– Do not:o Net against positive balanceso Shift to other side of balance sheet

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Overdraft Example

Due From Due To

Bank A 7,000 Bank D 4,000S&L B (2,000) S&L B 1,000CU C 4,000 CU C (3,000)

Reported in B.1: Report in A.1.a:11,000 5,000

00

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#1 Reporting balances at Federal Reserve Banks

#2 Reporting balances at FHLBs

#3 Reporting demand deposits Due from DIs pledged by the reporting depository institution that are not available for immediate withdrawal

#4 Reporting non‐demand deposits (i.e., time and savings)

“Myths and Mistakes of Inclusion"

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#5 Reporting negative or overdrawn accounts (e.g., netting negative balances with positive balances of other DIs)

#6 Reporting demand balances due from non depository institutions

#7 Reporting federal funds sold to other DIs

#8 Reporting cash items in process of collection (e.g., cash letters processed under Courtesy Cash Letter) as demand balances

“Myths and Mistakes of Inclusion"

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Cash Items in Process of Collection (CIPC) – B.2

• Instruments for the payment of money that:

– Are payable upon presentation in the U.S.

– Have been forwarded (directly or indirectly) to the payor DI

– Have not been made available to the presenting DI

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• The most Common Part of Cash Items:– The total outgoing cash letter (C/L) sent to the correspondent to be processed, less the amount for which the DI has received credit (i.e., the part that has been made available)

– Everyone has a different name for it: o overnighto remittanceo deferred credito 1‐day transit, 2‐day credito float

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Deferred Availability

1 2

June

3 4 5 6 7 8 9

10 11 12 13 14 15 16

17 18 19 20 21 22 23

24 25 26 27 28 29 30

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ST TW FMS• For a C/L sent on the 5th,

funds are unavailable as shown on the calendar:

1‐day,

2‐day, or

3‐day deferred credit

• Courtesy Cash Letter must be reported at least one day.

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• Include:– Checks and drafts (FRB, depository institutions, clearing

houses, and the U.S. Treasury)– Matured government bonds (including called bonds) and

coupons– Money orders and travelers' checks– Misrouted items ‐ drawn on another depository institution– Unposted debits– ACH amounts credited to a depositor's account prior to the

payment date to ensure availability of funds on payment date (e.g., payroll)

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• Also include as cash items:

– Unposted debits: Cash items drawn on the reporting institution that have been “paid” or credited by the institution and that have not been charged against deposits as of the close of business

• Example:

– A check is presented to a bank for payment and the bank pays the check without debiting the customer’s account

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• Rejects and Returns:

– Include:

o Misrouted items drawn on another depository institution

o Unposted debits ‐mangled checks, etc.

– Exclude:

o Items drawn on your institution that were returned to the presenting depository institution (e.g., insufficient funds)

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• Exclude:– Credit card slips and debit card slips– Items drawn on your depository institution– Checks or drafts drawn on foreign banks or foreign DIs

– Funds not received as a result of failed transactions (e.g., securities and/or foreign currency failures)

– Checks or drafts deposited with their correspondent for which the reporting depository institution is given immediate credit (possibly report in B.1)

– Warrants (in OK)


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• Check 21/cash letter imaging:

– http://www.frbservices.org/check/index.html

– Allows for a more efficient system

– Multiple daily cash letters

• Courtesy Cash Letter:

– Report at least one day

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• Cash Letter Issues – What to do?

– Weather:

o Blizzard

o Tornado

o Loss of Power

– Broken Proof Machine

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#1 Reporting NSF items drawn on your institution by your customer

#2 Reporting ZERO for any day

#3 Reporting identical figures all week

#4 Reporting demand balances which are immediately available

#5 Not reporting C/Ls processed under the Courtesy Cash Letter option for at least one day

“Myths and Mistakes of CIPC"

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Cash Items Exercise

• Tuesday Activity:– Hill Valley Bank redeemed $1.0M in savings bonds. The

bonds will be sent Thursday to FRB Kansas City for credit Friday

– Cash letter for $5.0M sent to FRB Kansas City for collection

The Hill Valley Bank’s first day of business is Tuesday, March 3rd.Using the day‐to‐day transactions below, correct the daily CIPCfigures shown on their FR 2900 report. General ledgers are notupdated on Saturday and Sunday.

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Cash Items Exercise

• Wednesday Activity:– $2.0M in excess vault cash sent to a correspondent bank. A

ticket is in the suspense account for credit expected Thursday

– A cash letter for $2.0M sent to FRB Kansas City for collection– Misrouted items for $2.0M (items sent to Hill Valley Bank in

error) sent to a correspondent bank for collection– Safeway's biweekly ACH payroll for $1.0M is credited to the

general ledger today, to ensure funds are available in the employees’ accounts tomorrow (Thursday)

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Cash Items Exercise

• Thursday Activity:

– Cash letter of $4.0M, sent by deadline to correspondent, Big Mountain Bank

– A cash letter totaling $5.0M, was sent to another FRB branch in the same district

– Hill Valley records an ‘unposted debit’ for $2.0M, because one check cannot be charged to the customer’s account due to insufficient funds. The check is held overnight as the customer guarantees to deposit the required funds at opening of business on Monday

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Cash Items Exercise

• Friday Activity:– Today is Founders’ Day in Dry Gulch. Hill Valley Bank

and most other depository institutions in Dry Gulch, close at 2:00 p.m. However, the local reserve bank, FRB Kansas City, is open all day. In the morning, there is a $6.0M debit to their FRB account

– A $3.0M cash letter is held overnight in the vault, because the proof‐machine broke down and the bank closed early. Cash letter will be sent Monday.

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Cash Items Exercise

• Monday Activity:– $1.0M in MasterCard and Visa tickets sent to

Citibank for collection– $2.0M in Treasury checks and $3.0M in a cash

letter is sent to their correspondent bank before 5:00 p.m.

– A $6.0M cash letter is sent to the local FRB by the

deadline

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Cash Items Exercise

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Hill Valley Bank Week endingDry Gulch, MO March 23

CASH ITEMS IN PROCESS OF COLLECTION

Tuesday Wednesday Thursday Friday Monday

Reported Amount 6 7 11 9 12

Corrected Amount 5 6 10 3 14

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Savings Deposits – C.1

• Deposits with:– No specified maturity dateand

– Not payable on a specified date or after a specified period of timeand

– Depository institution expressly reserves the right to require (7) days written notice before an intended withdrawal

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• Include:– Passbook account

– Statement account

– Money Market account (MMDA)

– Club account

– IRA investment

– ICS Savings

– Brokered deposits:o Must meet criteria

– Escrow

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Escrow Accounts

• Funds paid to the depository institution by one party that are given to another party after certain conditions have been met:

– Examples:

o Down payments for real estate sales and consumer goods

o Loan servicing arrangements

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Escrow Account Reporting

• An Escrow account can be a:– Transaction account deposit– Savings account deposit– Time deposit

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• Exclude:

– Deposits with maturities (D.1)

– Accounts that routinely exceed six transactions (A.1.c or A.2)

– Interest accrued but not yet paid

– Hypothecated deposits

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• Personal and non‐personal classifications

• Non‐personal accounts are reservable

• No more than (6) transfers per month by the following:

Check

Debit cards

On‐line banking

Telephone

Fax

Similar order to third parties

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Counting Savings Transactions

• To whom is the payment made?– Payments to third parties always count– Payments to the reporting depository institution usually don’t count (e.g., loan payments)

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Counting Savings Transactions

Convenient ways count:

• Pre‐authorized transfers

» Overdraft Protection

• Automatic transfers

• Telephone transfers (including data transmissions)

• Checks, drafts, debit cards

• On‐line banking

Inconvenient ways do not:

• Mail

• Messenger

• Automated teller machines

• In person

• Telephone (check mailed to the depositor)

If the transaction is a transfer to another account of the same depositor or a withdrawal, how is the payment made?

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Savings Accounts Exceeding Transaction Limitations

• DIs have the responsibility of monitoring the number of monthly transactions which occur in customers' savings accounts

• When a customer does not comply with Regulation D restrictions, the DI must take corrective action

• If a customer's account continually exceeds the number of transaction limitations, the account should be restructured or another account opened to effectively meet the customer's needs

When a savings account exceeds the transaction limitations unexpectedly, in any given month, the account balances SHOULD NOT be reported as transaction account balances for that month.

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Sweep Accounts

• What is a sweep account?– Background– Definition– Established in mid‐nineties

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Sweep Accounts ‐ Definition

• Legal definition:

– Two legally separate accounts:

o Transaction account (other demand/NOW)

o MMDA/Savings account

– Disclosed to the client(s)

– Must be reflected at close of business on the general ledger

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Sweep Accounts

• Mechanics:– At the first of the month, balances above a specified

threshold are swept to the non‐transaction account (e.g., from NOW to MMDA)

– As the transaction account becomes overdrawn, funds are transferred to cover the overdraft and restore the transaction account to its threshold amount (e.g., MMDA to NOW)

– Sixth transfer from the non‐transaction account moves all funds back to the transaction account until the beginning of the next month (e.g., MMDA to NOW)

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Sweep Accounts

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Item # Tues Wed Thurs Fri Sat Sun Mon Total

06/16/2015 06/17/2015 06/18/2015 06/19/2015 06/20/2015 06/21/2015 06/22/2015

A.1.a 4,000 3,500 6,000 5,000 5,000 5,000 5,000 33,500

A.1.b 0 0 0 50 50 50 0 150

A.1.c 133,000 135,000 136,000 134,000 134,000 134,000 15,500 821,500

A.2 98,000 99,000 100,000 110,000 110,000 110,000 11,500 638,500

A.3 235,000 237,500 242,000 249,050 249,050 249,050 32,000 1,493,650

B.1 1,500 1,500 1,500 1,500 1,500 1,500 500 9,500

B.2 975 1,025 1,500 775 775 775 1,000 6,825

C.1 425,000 423,000 421,000 424,000 424,000 424,000 641,000 3,182,000

D.1 200,000 200,000 200,000 200,000 200,000 200,000 200,000 1,400,000

E.1 2,000 2,750 2,725 2,575 2,575 2,575 2,625 17,825

F.1 60,000 60,000 61,000 61,000 61,000 61,000 61,000 425,000

BB1 June Only

Counting Transactions Exercise

Hill Valley BankJoint Account Holders:Mrs. Jennifer McFly and/or Mr. Marty McFly

Date Transaction Yes No

May 1

May 2

May 12

May 15

May 16

Each month, a pre-authorized transfer for $500.00 is made from Mr. Marty McFly’s savings account to his checking account at Hill Valley Bank.

Mr. Marty McFly writes three MMDA checks for the house payment, the car payment,and the insurance payment to another bank.

Mrs. Jennifer McFly telephones a request for a $200.00 withdrawal from her savingsaccount and a cashier’s check is mailed to her home address.

Mr. Marty McFly’s checking account is overdrawn and automatic overdraft protectiontransfers $100.00 from his savings account to cover the checking account overdraft.

Mr. Marty McFly makes a $200.00 telephone transfer for a monthly student loanrepayment to Hill Valley Bank.

x

x

x

x

x

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Counting Transactions Exercise

Hill Valley BankJoint Account Holders:Mrs. Jennifer McFly and/or Mr. Marty McFly

Date Transaction Yes No

May 18

May 22

May 23

Mr. Marty McFly withdraws $500.00 from his savings account via an ATM machine.

Mrs. Jennifer McFly drives by the Tannen Square Branch of Hill Valley Bank and withdraws $250.00 cash.

Mr. Marty McFly writes a check from his savings account for his water payment.

x

x

x

Have Jennifer and Marty McFly exceeded transfer limitations on their savings account? NO

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Total Time Deposits – D.1

Characteristics:

• Payment Requirements

• Withdrawal Limitations

• Personal and non‐personal classifications:

– Non‐personal accounts are reservable

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• Include:– Payable on a specified date/time– Not less than (7) days after deposit:

o Accounts with no stated maturities which must be held for at least (7) days (open time deposits)

– Index CDs– Club accounts– IRA investments– Escrow– Brokered time deposits– CDARS

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• Exclude:

– Interest accrued but not yet paid to depositor

– Time deposits when no penalty is assessed for an early withdrawal:

o Penalty ‐ 7 days of simple interest

o No Penalty ‐ Other demand or savings

– Hypothecated deposits

– Matured CDs

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Time Deposits >=$100,000 – F.1

• Deposit balances >=$100,000:– Individuals– Companies– Governments– Not‐for‐profits– Escrow– CDARS– Brokered CDs

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• Include:

– Time deposits with balances of $100,000 or more

– Time deposits originally issued with smaller balances that, because of interest credits or additional deposits, have current balances of $100,000 or more

– For brokered time deposits and CDARS, include only those individual depositor balances of $100,000 or more

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• Exclude:– Savings account balances of $100,000 or more– Transaction account balances of $100,000 or more– In determining if a time deposit has a balance of $100,000 or more, do not combine deposits that are represented by separate certificates or accounts, even if held by the same customer

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• Exclude:

– Entire balance of brokered deposits if the underlying deposits of the brokered block are less than $100,000:

o Individual deposit information is obtainable from most brokers

o The vast majority of brokered deposits would only be reported in Total Time Deposits (D.1) and not in F.1

o If information is not obtainable, then exclude brokered deposit from F.1

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Total Non‐personal Savings & Time Deposits – BB.1

• One time per year:

– FR 2900 weekly, report as of June 30th

– FR 2900 quarterly, report on the last day of the June reporting period – Monday

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Total Non‐personal Savings & Time Deposits – BB.1

• Include:– Non‐personal savings and non‐personal time deposits also included in C.1 and D.1:o Non‐personal Savings Depositso Non‐personal Time Deposits

• Exclude:– Non‐personal transaction accounts (included in A.1.c and A.2)

• Reservable – currently at 0%

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Non‐personal Brokered Deposits?

• Include in BB.1:

– Balances of non‐personal depositors only

– The underlying non‐personal deposits that make up brokered deposits. Usually the brokered deposit blocks are made up entirely of individuals; therefore, they are not reported in BB.1, but this is not always the case

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Personal or Non‐personal?

Transferable refers to:

Financial instruments that may be put in the name of an entity, other than the original holder without the specific approval of the issuing depository institution

1. Transferable?

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1. Transferable?

Non‐personal

Yes

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2. Is the holder a natural person? (Beneficial Interest)

No

According to Regulation D:A natural person is an individual person or sole proprietorship. A sole proprietorship is a form of business in which one person owns all the assets of a business, in contrast to a partnership or corporation.The sole proprietor is solely liable for all the debts of the business.A corporation owned by an individual is NOT a sole proprietorship.

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1. Transferable?

Non‐personal

Yes


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Personal

Yes

85

1. Transferable?

Non‐personal

Yes


No


Non‐personal

No

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1. Transferable?

Non‐personal

Yes


No

Personal

Yes


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Savings and Time Classification Exercise

Include the following accounts on the FR 2900 in:C.1 Total Savings Deposits F.1 Time Deposits of $100,000 or more

D.1 Total Time Deposits BB.1 Non‐personal Savings and Time Deposits

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# TIN/SS/Acct #NameAddress

DepositAmount

InterestCredited

Open Date & Maturity Date Classification

1 1098957460928765

Dr. Emmett Brown (Doc)644 Research Rd.Hill Valley, MO

$99,000.00 $1,250.0002/09/1102/08/16

2 4120908512965876

Biff’s Ice Cream, LLP1575 Woodrow RoadBlue Springs, MO

$20,000.00 $249.92 02/01/99

3 1092316410927165

Lorraine BainesMerrill Lynch/IRA Custodian97 Beechwood RoadAiredale, NJ

$10,000.00 $125.0002/02/1508/02/16

4 11967703 Strickland County TreasurerAttn: Peggy Sue Jenkins1200 Main, Ste 100Hill Valley, MO

$1,750,000.00 $0.00 07/30/15

D.1 and F.1

C.1 and BB.1

D.1

C.1 and BB.1

Savings and Time Classification Exercise

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#TIN/SS/Acct #

NameAddress

DepositAmount

InterestCredited

Open Date & Maturity Date Classification

51092467567249037

Strickland ISDFinance Dept. Suite 107Attn: Joe KnowledgeHill Valley, MO

$99,465.00$1,249.92

07/31/1408/01/15

64212459541342945

Ford Automaker RetireesAttn: Pension Plan Manager1913 Woodrow Wilson WayWashington, DC

$150,000.00 $525.0002/28/1408/31/15

7

2174490763379846

Promontory Interfinancial NetworkAttn: CDARS ‐ Client Services1515 Courthouse Rd, Ste 800Arlington, VA

$18,000,000.00 $0.0006/18/1512/18/15

Include the following Accounts on the FR 2900 in:C.1 Total Savings Deposits F.1 Time Deposits of $100,000 or more

D.1 Total Time Deposits BB.1 Non‐personal Savings and Time Deposits

Not reported, matured

D.1 and F.1(beneficial interest is for individuals)

D.1 – participated out in amounts <100,000 or if certificated in

amount >100,000, include in F.1

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Vault Cash ‐ E.1

• Include:– U.S. currency and coin, owned and held by the reporting institution that may at any time be used to satisfy depositors’ claims

– Cash in ATMs

– Cash in transit to the FED, if reporting depository institution’s account has not been credited

– Cash in transit from the FED, if account has been charged

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Vault Cash ‐ E.1

• Exclude:– Foreign currency and coin

– Silver or gold coin, or bullion, or other currency, and coin where the numismatic value exceeds its face value

– Coin collections held in safekeeping for customers

Exclude any currency or coin that is not U.S. which the reporting depository institution does not have the full and unrestricted right to use to satisfy depositors' claims.

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Vault Cash ‐ E.1

• Reporting cash held in ATM(s) or rented vault space:

– DI books the cash as an asset

– DI has full right to ownership

– Cash is immediately available (reasonably nearby)

– No other depository institution can lay claim to the cash

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Vault Cash Exercise

YES NO1 ATM Cash

2 Gold bar

3 Cash letter left in the vault overnight

Counterfeit currency

ATMs serviced & maintained by correspondent

$2.00 bill

U.S. coin & currency in transit to the FRB and your account has not been credited

Coin collection stored in safekeeping for a customer

1,000 Euro or 10,000 Slovak koruna (foreign currency & coin)

U.S. dollar equivalent of foreign currency & coin

Torn or mutilated currency (greater than ½ of the note is in the vault)

Shredded currency13 U.S. currency & coin in transit from the FRB and your account has

been charged 14 U.S. currency & coin in rented vault space (accessible during business hours)

10

9

12

11

4

5

6

7

8

X

X

X

X

X

X

X

X

X

X

X

X

X

X

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Other Issues

• Payment errors

• Mergers or Purchase and Assumptions

• Comparison reports

• Retro entries vs. posting errors

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Types of Payment Errors

• Four types of payment errors:

– Duplicate payment

– Misdirected payment

– Failed payment

– Improper payment

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• Duplicate payment:

– Occurs when the sending institution transfers funds more than once

– The receiving depository institution reports these funds as Other Demand (A.1.c) until the duplicate payment is returned

– The sending depository institution does not report the duplicate payment either as a Due from DIs (B.1) or as CIPC (B.2)

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• Misdirected payment:

– Occurs when the sending depository institution transfers funds to the wrong bank

– The receiving depository institution reports these funds as Other Demand (A.1.c) until the funds are returned

– The sending depository institution does not report these funds either as a Due from DIs (B.1) or as CIPC (B.2)

– The depository institution that did not receive the expected funds does not report these funds as a Due from DIs (B.1) or as CIPC (B.2), even if they credited their customer’s account

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• Failed payment:– Occurs when a depository institution fails to make payment

requested by a customer because of system, clerical errors, or other problems

– The depository institution that retained the funds must report them as Other Demand (A.1.c) until the funds are disbursed

– The depository institution that did not receive the expected funds does not report these funds either as a Due from DIs (B.1) or as CIPC (B.2), even if they credited their customers account

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• Improper payment:– Improper third‐party transfers sent over Fedwire during the settlement period

– The receiving bank reports these funds as Other Demand (A.1.c)

– The sending bank does not report these funds either as a Due from DIs (B.1) or as CIPC (B.2)

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Mergers/P&As

• What if my bank is involved in a merger or the purchase or sale of a branch?

– Reporting correctly on the FR 2900 report:

o Close of Business (COB)

o Opening of Business (OOB)

– What we should expect to see with the data

– Contact us

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Inter Series Comparison Reports

• Run quarterly to compare FR 2900 data against the Call Report:

– Data should equal, or at least be in the ballpark

• What are my responsibilities?– Research differences

– Revise prior periods, if needed

– Begin reporting data correctly

100

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Inter Series Comparisons –Banks and Thrifts

• FR 2900 vs. Call Report (FFIEC 041/031):– Other Demand (A1a+A1b+A1c) = RC‐E7b– NOW (A2) = RC‐E7a – RC‐E7b– Total Transaction (A3) = RC‐E7a– Due From DI’s (B1) = RC‐A2b– CIPC (B2) = RC‐A1a– Savings (C1) = RC‐EM2a1 + RC‐EM2a2– Time Deposits (D1) = RC‐EM2b + RC‐EM2c + RC‐EM2d– Vault Cash (E1) = RC‐A1b– Time Deposits >= $100,000 (F1) = RC‐EM2c + RC‐EM2d

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Inter Series Comparisons –Credit Unions

• FR 2900 vs. Call Report (NCUA 5300):

– Share Drafts (A2) = Shares/Deposits, line 9 (Share Drafts)

– Due From DIs (B1) + CIPC (B2) + FRB balances = Assets, line 2.c (Total Cash on Deposit)

– Total Savings (C1) = Shares/Deposits, line 10 (regular shares) + line 11 (money market shares) + line 14 (all other shares)

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– Total Time Deposits (D1) = Shares/Deposits, line 12 (share certificates) + line 13 (IRA/Keogh accounts)

– Time Deposits = or > $100,000 (F1) = line 25 (shares certificates = or > $100,000) + line 26 (IRA/Keogh accounts = or > $100,000)

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– Vault Cash (E1) = Assets, line 1 (Cash on hand)

– Total Deposits (A.3 + C.1 + D.1) = Shares/Deposits, line 17 (Total shares and deposits)

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Close of Business

• The term “close of business” (COB) refers to the cut‐off time for posting transactions to the General Ledger (GL) for that day

• The time should be reasonable and applied consistently

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Close of Business

• A debit or credit cannot be made without posting an offset to the transaction

• All transactions must be posted during the period of time the general ledger is open

• Saturday and Holiday postings

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Retro Entries vs. Posting Error(s)

• The FR 2900 should reflect only the GL balance as of the “close of business” each day, regardless of when the transaction should have occurred

• Balances should be reflected on the FR 2900 based on:– When an institution has received or sent funds

– Has a liability to make payment to a customer or third party

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• An actual bookkeeping error is the only circumstance where changing the data is permitted

• The FR 2900 may be adjusted to more accurately reflect the transaction, as it should have been recorded

108

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• Question 1:

– On day one, Bank T received a $10M demand deposit for the credit of Corporation C. Due to a posting error, Corporation C was credited $1M On day two, the error is discovered

– How should this be reported?

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• Answer:

– When the error is discovered on day two, Bank T should revise the $1M posted on day one to reflect the $10M deposit, resulting in the $10M being reported for both days and any days going forward

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• Question 2:

– On day one, Bank M received a $15M wire from the unrelated Bank J. In error, Bank J sent $15M instead of $5M. On day two, Bank M sends $10M back

– How should these funds be reported?

111


• Answer:

– On day one, Bank M reports the $15M it received on the FR 2900 in line A1c. The $10M excess that Bank M received in error should be returned the following day.

– Bank J doesn’t reflect anything on the FR 2900.

112

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113

FR 2900 Automated Report

Item # Tues Wed Thurs Fri Sat Sun Mon Total

A.1.a 4,000 3,500 6,000 5,000 5,000 5,000 5,000 33,500

A.1.b 0 0 0 50 0 50 0 100

A.1.c 33,000 32,000 34,500 35,000 35,000 35,000 47,000 251,500

A.2 22,000 22,500 22,250 28,000 28,000 28,000 22,000 172,750

A.3 59,000 58,000 62,750 68,050 68,000 68,050 74,000 457,850

B.1 1,500 1,500 15,000 1,500 1,500 1,500 ‐500 22,000

B.2 975 1,025 1,500 775 775 775 1,000 6,825

C.1 87,000 88,000 86,000 86,500 86,500 86,500 87,000 607,500

D.1 125,000 124,500 136,500 136,000 136,000 136,000 137,500 931,500

E.1 2,000 2,750 2,725 2,600 2,575 2,575 2,625 17,850

F.1 60,000 60,000 61,000 61,000 61,000 61,000 62,750 426,750

BB1 June Only

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Questions from your Analyst

• If questioned on a fluctuation: INVESTIGATE!!!

• Explanations should provide detailed information on:– WHO

– WHAT

– WHEN (or HOW LONG)

– WHY

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Informative Responses

Question: “Your Total Time Deposits (D.1) decreased $12 million on Monday. Can you tell me what caused the decrease?”

– Non‐informative Response: "I guess we had a bunch of CDs mature.”

– Informative Response: "We had two personal CDs mature on 6/17, one for $7M and one for $5M. One customer requested us to transfer the funds to their savings account (C.1), and the other client took the funds elsewhere. Because both accounts were greater than $100,000 our large time deposits (F.1) also decreased."

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Question: “NOW/Share Drafts (A.2) had an increase of $10 million on 12/29/14?”

– Non‐informative Response:"We opened some new accounts.”

– Informative Response:" The County Treasurer's office deposited $10.5 million because of year‐end property tax collections.”


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Question: “Other Demand (A.1.c) had an increase of $23M on 03/21/15?”

– Non‐informative Response:

“We had some extra money come in.”

– Informative Response:

“A local pharmaceutical company deposited funds as they routinely do, at or near the end of the month.”

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• We are looking for industry specific answers:– Commercial/Industrial – Mfg, Ag, Oil and Gas, Casinos, etc.

– Individual – sold their family business– Public monies:

o School District or Collegeo Countyo City

– Cyclical:o Agriculture – harvest time or livestock relatedo Recreational – ski industry

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Revised FR 2900 Data

• When reporting errors are discovered, depository institutions are requested to revise the FR 2900 to reflect accurate data:

– Revisions are requested back to the beginning of the error or the next to the last Call report for which final data are available (approximately six months of data).

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Revised FR 2900 Data

• Depository institutions should not make single day adjustments each quarter to match their Call reports

• Month‐end adjustments are acceptable differences, but reports should have moderate changes from the previously reported figures

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What’s coming?

• Reporting Criteria:

– Increase to $400 million (September 2015)

• New FR 2900 report form:

– October 2015

• New Checkbox:

– Offer foreign currency deposits

o Submit FR 2915

Current Submission

• Four ways to submit FR 2900 data to the Federal Reserve Bank of Kansas City:

– Internet Electronic Submission (IESUB)

– FAX

– Email

– Mail

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IESUB ~ Current Reports

• FR 2900

• FR 2900q

• FR 2644

• FR 2028A/B

https://www.frbservices.org/centralbank/reportingcentral/iesub_report.html

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• FR Y‐9C/LP• FR Y‐9SP• FR Y‐9ES

Future Submission

• Reporting Central will replace IESUBhttps://www.frbservices.org/centralbank/reportingcentral/index.html

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Reporting Central

• Must be credentialed if you want to submit electronically

• 4‐step process:– Designate an authorized individual

– Establish End User Authorization Contact (EUAC)

– Setup Subscribers through Customer Contact Center (CCC)

– Setup report access (RC‐1 Form)

• Reporting Central Resource Centerhttps://www.frbservices.org/centralbank/reportingcentral/resource_center.html

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Reporting Central ~ Current Reports

• FR 2052b

• FR 2314/S

• FR 2320

• FR 2835/A

• FR 2886b

• FR Y‐8• FR Y‐11/S• FR Y‐12/A• FR Y‐16

https://www.frbservices.org/centralbank/reportingcentral/resource_center.html

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IESUB/Reporting Central Support

• FOR ENROLLMENT and TECH SUPPORT

– Call 800‐333‐2898

o Lee Manley

o Lisa Carter

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Helpful Links

Reporting Forms and Instructionshttp://www.federalreserve.gov/apps/reportforms/default.aspx

Reporting Central Resource Centerhttps://www.frbservices.org/centralbank/reportingcentral/resource_center.html

IESUBhttps://www.frbservices.org/centralbank/reportingcentral/iesub_report.html

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Questions?

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