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(a) Authority. This
part is issued under the authority of section 19 of the Federal
Reserve Act (12 U.S.C. 371a, 461, 505), section 7 of the International
Banking Act of 1978 (12 U.S.C. 3105), section 11 of the Federal
Reserve Act (12 U.S.C. 248), and section 8 of the Federal Deposit
Insurance Act (12 U.S.C. 1818), unless otherwise noted.
(b) Purpose. This part prohibits the payment of interest on
demand deposits by member banks and other depository institutions
within the scope of this part.
(c) Scope. (1) This regulation applies to state chartered banks
that are members of the Federal Reserve under section 9 of the Federal
Reserve Act (12 U.S.C. 321, et seq.) and to all national banks. The
regulation also applies to any Federal branch or agency of a foreign
bank and to a State uninsured branch or agency of a foreign bank in
the same manner and to the same extent as if the branch or agency were
a member bank, except as may be otherwise provided by the Board, if:
(i) Its parent foreign bank has total worldwide consolidated
bank assets in excess of $1 billion;
(ii) Its parent foreign bank is controlled by a foreign
company which owns or controls foreign banks that in the aggregate
have total worldwide consolidated bank assets in excess of $1 billion;
or
(iii) Its parent foreign bank is controlled by a group of
foreign companies that own or control foreign banks that in the
aggregate have total worldwide consolidated bank assets in excess of
$1 billion.
2) For deposits held by a member bank or a foreign bank, this
regulation does not apply to ``any deposit that is payable only at an
office located outside of the United States'' (i.e., the States of the
United States and the District of Columbia) as defined in Sec.
204.2(t) of the Board's Regulation D-- Reserve Requirements of
Depository Institutions (12 CFR 20.4).
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