FDIC Law, Regulations, Related Acts
4000 - Advisory Opinions
Insurance of Funds Held by Catholic Parochial School
April 15, 1988
Patti C. Fox, Attorney
In our telephone conversation of January 7, 1988, you requested deposit insurance information regarding funds owned by a Catholic parochial school. As I mentioned to you, the FDIC has had a number of similar requests on behalf of Catholic organizations, and has undertaken to examine its regulatory interpretation regarding this matter.
In deposit insurance coverage decisions, Section 330.1(a) of FDIC regulations authorizes the consideration of rules of local law in determining the right and capacity in which an account is maintained by a depositor. Pursuant to Louisiana law, title to property vests according to the status of the church as a corporation or unincorporated association. If a religious society is chartered as a nonprofit corporation or as a corporation by a special act of legislation, title to church property vests in the named or elected representatives under the by-laws of the corporation. Louisiana Civ. Code Ann. art. 430, 431, and 446 (West 1952); La. Rev. Stat. Ann. § 12:201 et seq. (West 1969). In the case of an unincorporated association, including a corporation whose charter has expired, title vests in the collective members of the congregation. Roman Catholic Congregation of St. Patrick's Church v. Consumers' Ice Co., 44 La. Ann. 1021, 11 So. 682 (1892).
It appears, therefore, that each Catholic congregation would be afforded separated insurance coverage for its funds in Louisiana. This result is contrary to that reached under the common law jurisdictions of Texas and Illinois where title is vested in the bishop of the diocese; moreover, the bishop enjoys discretionary authority to dispose of and manage church property as he sees fit without the concurrence of local congregations.
I am unable to determine whether a parochial school would be entitled to separate insurance coverage from the local parish church or other entity to which it is attached. In order to warrant separate coverage, ownership, including the exclusive use and control of the funds must be established by the school. If you can supply me with details of the management of the funds, e.g., whether expenditures are subject to the control of the bishop, local church, or other parties, I will be able to determine insurance coverage.