AT-01-11, Clarification of "Time Deposit Accounts" as Related to Financial Institution Data Matches

ACTION TRANSMITTAL

OCSE-AT- 01-11

DATE: October 4, 2001

TO: State Title IV-D Agencies and Other Interested Parties

SUBJECT: Clarification of "Time Deposit Accounts" as Related to Financial Institution Data Matches.

RELATED REFERENCES: Question #4 in OCSE- AT 98-07, dated 3/2/98.

BACKGROUND: Question #4 in OCSE- AT 98-07 provided definitions for the terms used to define an "account" for Financial Institution Data Matches (FIDM) purposes under section 466(a)(17) (D)(ii) of the Social Security Act (the Act). In that AT, we indicated the regulations of the Federal Reserve System (FRS) at 12 CFR 204.2.

As part of the definition of "time deposits" the AT included "...borrowings, represented by a promissory note or acknowledgement of advance or similar obligation". Subsequently, "borrowings" were interpreted to mean personal loans, and for the purposes of FIDM some attempts have been made to subject personal loan payments to liens or seizures under section 466(a)(17) of the Act. However, this interpretation of "borrowings" as personal loans was incorrect.

COMPLETE DEFINITION: The definition of "time deposit" in OCSE-AT 98-07 was not complete in that it did not include all of the qualifying language at 12 CFR 204.2(c)(1)(iv)(A) -(E).
"borrowings" The complete definition of "borrowings is:

"Borrowings, regardless of maturity, represented by a promissory note, an acknowledgment of advance, or similar obligation described in Sec. 204.2(a)(1)(vii) that is issued to, or any bankers' acceptance (other than the type described in 12 U.S.C. 372) of the depository Institution held by--

(A) Any office located outside the United States of another depository institution or Edge or agreement corporation organized under the laws of the United States;

(B) Any office located outside the United States of a foreign bank;

(C) A foreign national government, or an agency or instrumentality thereof engaged principally in activities which are ordinarily performed in the United States by governmental entities;

(D) An international entity of which the United States is a member; or

(E) Any other foreign, international, or supranational entity specifically designated by the Board."

When read in full, the definition of borrowings clearly relates to interbank transactions, not personal loans. This interpretation was confirmed by FRS staff.

ACTION: Substitute the full definition of "Time deposit" and the clarification of the meaning of the "borrowings" language in the answer to question #4 in OCSE-AT 98-07.

EFFECTIVE DATE: Immediately

INQUIRIES: ACF Regional Administrators

_________________

Frank Fuentes
Acting Commissioner
Office of Child Support Enforcement