Each depositor insured to at least $250,000 per insured bank

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4000 - Advisory Opinions


Insurance of Litigants' Funds Deposited by Federal Courts

FDIC-90-35

August 9, 1990

J. William Via, Jr., Counsel

By your letter of August 3, 1990, you ask for confirmation that "registry funds", which are litigants' funds deposited by Federal courts in insured institutions pending the outcome of litigation (per 28 U.S.C. §2041), are not the property of the United States and therefore are not "public funds" within the meaning of the Federal Deposit Insurance Act (12 U.S.C. §1821(a)); rather, "registry funds", deposited and held in accordance with the requirements of 12 CFR §330.4, are eligible for "pass-through" deposit insurance according to the ownership interests of each of those for whom such funds are held (see 12 CFR §330.6).

It is so confirmed. It does not necessarily follow, however, that each "registry account" is invariably accorded full deposit insurance, and this is so because each principal or beneficial owner's interest in a "registry account" will be combined with any other deposits held by or for that owner in the same institution in the same "right and capacity" and insured to $100,000 in the aggregate (see 12 CFR §330.3). With that clarification, it is fair to say that each beneficial owner's interest in a "registry account", held in conformity with FDIC deposit insurance rules (as revised, July 29, 1990), is eligible to be insured as if each beneficial owner had made a direct deposit in the institution.

Incidentally, a public unit of the United States depositing its own funds in an insured institution is entitled to insurance of (i) up to $100,000 in the aggregate for its time and savings deposits and (ii) up to $100,000 in the aggregate for its demand deposits (see 12 CFR §330.14(a)).


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