4000 - Advisory Opinions
Effect of Unposted Debits on Deposit Accounts at the Time a Bank is Closed
February 8, 1988
Walter P. Doyle, Counsel
Your January 26 letter asks whether proceeds exceeding $100,000 from the sale of Treasury securities for a customer that are credited to his demand account would be offset by an unposted debit the same day for a similar amount arising from the purchase of Treasury securities for the customer's account, in the event your bank were to be closed by the Comptroller of the Currency.
In determining the customer's deposit balance that is subject to the $100,000 insurance limit, the FDIC claim agents would assure that all items comprising the day's work are processed. The FDIC's Manual of Instructions For Claim Agents states at page A.1.1 as follows:
"The rights of depositors are fixed as of the moment of insolvency. Thus, the books and records of the bank must be brought current to that point by posting all unprocessed transactions including the crediting of accrued but unpaid interest on all interest bearing accounts."
Assuming, therefore, that the debit transaction is actually initiated before the bank is closed, the unposted debit would be processed and reflected in the customer's deposit balance that is subject to the insurance limit. Of course, in order for the closed bank to be actually holding the purchased Treasury securities for the customer's account, final settlement of the purchase transaction must have been effected prior to the bank's closing. If settlement of the purchase did not take place until after the bank in fact closed, the closed bank would not be in possession of the purchased securities and the FDIC as receiver could not, therefore, deliver to the customer what it did not have.