FDIC Law, Regulations, Related Acts
4000 - Advisory Opinions
Deposit Insurance Coverage of Nonprofit Corporation Accounts
July 25, 1985
Patti C. Fox, Attorney
This is in response to your letter of June 21, 1985 requesting deposit insurance coverage information. You have stated that the *** Bar Association is a non-profit corporation which has contracted with the county to provide legal services for two separate projects. The funding for each project is supplied by the county and maintained in separate accounts by the Bar Association.
Based on the information provided, it appears that the funds belong to the corporate entity by virtue of the contracts. The FDIC's regulations governing corporations would be applicable to a determination of insurance coverage. Section 330.5 of the FDIC's regulations provides that "[d]eposit accounts of a corporation or partnership engaged in any independent activity shall be insured up to $100,000 in the aggregate." Section 330.7 defines "independent activity" to mean "any activity other than one directed solely at increasing insurance coverage."
The rule covers both for-profit and not-for-profit corporations, so that the accounts of the Bar Association will be insured up to $100,000 in the aggregate. Maintaining several accounts earmarked for different purposes does not increase insurance coverage. As a general principle, all funds owned in the same "right and capacity" must be added together.
This interpretation is based on the assumption that the contracts do not confer the Bar Association with an agency or other type of custodial status. If you are in need of further assistance, please feel free to contact me.