Lines A1c and A2Lines A1c and A2

Transaction AccountsTransaction Accounts

• What is a transaction account?– Transfers or Withdrawals through:

• ATMs• Checks• Debit Cards

– Unlimited amount of transactions

Transaction AccountsTransaction Accounts

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

Accounts

Line A1C (Other Demand Line A1C (Other Demand Deposits)Deposits)

• Include deposits held for :• Individuals, Partnerships, Corporations, State

& Local Governments• Foreign Governments and International

Institutions• US Government Agencies

Line A1C (Other Demand Line A1C (Other Demand Deposits)Deposits)

• Include:– Official Checks

• Cashier’s Checks• Teller’s Checks • Money Orders • Traveler’s Checks or Teller’s Checks whose

funds have not cleared

Line A1C (Other Demand Line A1C (Other Demand Deposits)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

Line A1C (Other Demand Line A1C (Other Demand Deposits)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• Escrow Accounts– Withdrawn within 6 days from date of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

Line A1C (Other Demand Line A1C (Other Demand Deposits)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)

Line A1C (Other Demand Line A1C (Other Demand Deposits)Deposits)

• Common reporting errors:– Reporting Overdrawn Accounts– Failure to report

• Unposted Credits• Suspense Accounts• Official Checks

Line A2 (ATS, NOW/Share Line A2 (ATS, NOW/Share Drafts, and Telephone Drafts, and Telephone

and Preauthorized and Preauthorized transfers)transfers)

Line A2 (ATS, NOW/Share Drafts, Line A2 (ATS, NOW/Share Drafts, and Telephone and and Telephone and

Preauthorized transfers)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

Line A2 (ATS, NOW/Share Drafts, Line A2 (ATS, NOW/Share Drafts, and Telephone and and Telephone and

Preauthorized transfers)Preauthorized transfers)• Eligible to hold NOW accounts:

– Individuals or Sole Proprietorships– Nonprofit Organizations– Domestic Government Units– IOLTA

Line A2 (ATS, NOW/Share Drafts, Line A2 (ATS, NOW/Share Drafts, and Telephone and and Telephone and

Preauthorized transfers)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

Line A2 (ATS, NOW/Share Drafts, Line A2 (ATS, NOW/Share Drafts, and Telephone and and Telephone and

Preauthorized transfers)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.

Line A2 (ATS, NOW/Share Drafts, Line A2 (ATS, NOW/Share Drafts, and Telephone and and Telephone and

Preauthorized transfers)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

Line A2 (ATS, NOW/Share Drafts, Line A2 (ATS, NOW/Share Drafts, and Telephone and and Telephone and

Preauthorized transfers)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

Line A2 (ATS, NOW/Share Drafts, Line A2 (ATS, NOW/Share Drafts, and Telephone and and Telephone and

Preauthorized transfers)Preauthorized transfers)

IMPORTANTAccount 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.

Where do these accounts go?Where do these accounts go?

IOLTA Checking Account

Jane Doe’s overdrawn checking account

Girl Scouts interest bearing checking account

Lisa’s share draft account at ZY Credit Union

Line Item Account Holder

A2A1cA1c/A2A2

A2

Quality Inc. Checking Account

Things To ConsiderThings 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

Legitimate DifferencesLegitimate DifferencesCommercial BanksCommercial Banks

• FR2900>FFIEC031/041– Primary Obligations– Teller Checks– Commingled Trust Accounts

Legitimate DifferencesLegitimate DifferencesSavings and LoansSavings 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 DifferencesLegitimate DifferencesCredit UnionsCredit 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

Lines A1C and A2Lines A1C and A2

Questions????