Bankers' banks.

CFR · 2024-01-01 · US · Title 12

(a)(1) The Federal Reserve Act, as amended by the Monetary Control Act of 1980 (title I of Pub. L. 96-221), imposes Federal reserve requirements on depository institutions that maintain transaction accounts or nonpersonal time deposits. Under section 19(b)(9), however, a depository institution is not required to maintain reserves if it: (i) Is organized solely to do business with other financial institutions; (ii) Is owned primarily by the financial institutions with which it does business; and (iii) Does not do business with the general public. (2) In its application of these requirements to specific institutions, the Board will use the following standards: (i) A depository institution may be regarded as organized solely to do business with other depository institutions even if, as an incidental part to its activities, it does business to a limited extent with entities other than depository institutions. The extent to which the institution may do business with other entities and continue to be regarded as a bankers' bank is specified in paragraph (a)(2)(iii) of this section. (ii) A depository institution will be regarded as being owned primarily by the institutions with which it does business if 75 per cent or more of its capital is owned by other depository institutions. The 75 per cent or more ownership rule applies regardless of the type of depository institution. (iii) A depository institution will not be regarded as doing business with the general public if it meets two

official document · source cfr-2024 · id 12:§ 204.121