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4000 - Advisory Opinions

Deposit Notes are Certificates of Deposit


December 14, 1987

Katharine H. Haygood, Senior Attorney

Your letter of September 30, 1987 to our Chicago Regional Office asks whether an issuance of *** entitled "Deposit Note" is an asset which may be pledged to the Federal Deposit Insurance Corporation pursuant to 12 C.F.R. § 346.19(d)(1).

The first issue in this circumstance is whether the "deposit note" is eligible for inclusion as a certificate of deposit. After discussion with you and *** of your office, and receipt of additional information (including the offering circular) for these Deposit Notes, we have concluded that the issuance can be treated as a certificate of deposit under § 346.19(d)(1). The offering circular states that it is *** opinion that the Deposit Notes are insured deposits. Further, *** has stated that the Deposit Notes are included in total deposits on the call report and deposit insurance assessments are paid on the Deposit Notes. As you have stated in your original letter, the Deposit Note is payable in the United States, has maturity of one year or less, and will be accompanied by a waiver of offset agreement.

Based on all of the facts in this situation, the Deposit Notes in question may be included in the pledge of assets required by insured branches of foreign banks.

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