A customer would like to open an account for a bible study group, but he does not have any information pertaining to the church. This account does not appear to qualify for unincorporated organization or club accounts. Can we open the account using the customer’s name with the title of the bible study group?

We believe that a bible study group could qualify as an unincorporated association for deposit insurance purposes. An unincorporated association must consist of two or more persons formed for some religious, educational, charitable, social or other noncommercial purpose, and we believe that a bible study group would fit that definition. Consequently, you may title the account either in the name of the individual who is opening the account or in the name of the bible study group, depending on your customer’s preference and the deposit insurance considerations noted below.

While deposit insurance may not be a concern for this account, it likely would qualify for separate deposit insurance coverage as the funds of an unincorporated association — provided that the account is titled in the name of the association. To avoid any ambiguity for deposit insurance purposes, we recommend titling the account in the name of the bible study group without using any individual names. If you do use an individual’s name in the account’s title, it could be insured as the personal deposits of the individual and not as the separate funds of the unincorporated association.

For resources related to our guidance, please see:

12 CFR 330.11(c) (“The deposit accounts of an unincorporated association engaged in any independent activity shall be added together and insured up to the SMDIA in the aggregate, separately from the accounts of the person(s) or entity(ies) comprising the unincorporated association. An unincorporated association shall be deemed to exist, for purposes of this paragraph, whenever there is an association of two or more persons formed for some religious, educational, charitable, social or other noncommercial purpose.”)

Financial Institution Employee’s Guide to Deposit Insurance (Single Accounts) (“Individually owned accounts are accounts owned by natural persons (i.e., human beings). The most common single account is a deposit account opened by an individual on his or her own behalf. The depositor maintains the account and owns the funds on deposit. These accounts are simply titled in the owner’s name, such as ‘John Smith.’”)

12 CFR 330.5(a)(1) (“[I[i][/i]]n determining the amount of insurance available to each depositor, the FDIC shall presume that deposited funds are actually owned in the manner indicated on the deposit account records of the insured depository institution. If the FDIC, in its sole discretion, determines that the deposit account records of the insured depository institution are clear and unambiguous, those records shall be considered binding on the depositor, and the FDIC shall consider no other records on the manner in which the funds are owned. If the deposit account records are ambiguous or unclear on the manner in which the funds are owned, then the FDIC may, in its sole discretion, consider evidence other than the deposit account records of the insured depository institution for the purpose of establishing the manner in which the funds are owned. . . .”)

12 CFR 330.6(a) (“Funds owned by a natural person and deposited in one or more deposit accounts in his or her own name shall be added together and insured up to the SMDIA in the aggregate. . . .”)

Financial Institution Employee’s Guide to Deposit Insurance (Corporation, Partnership and Unincorporated Association Accounts) (“Deposit accounts held in the name of an unincorporated association (such as a neighborhood association or a scout troop) engaged in an independent activity are insured as the association’s deposits, separately from the personal deposits of the officers or members. In order for the account to receive separate coverage, the title of the account must include the name of the unincorporated association. In other words, if the accounts are titled using the names of the officers of the organization, the accounts may be insured as the personal deposits of the individuals and not as the funds of the organization. Insurance coverage for deposits held by an unincorporated association is a maximum of $250,000. The number of signatories on the account or the number of members that the association may have does not affect the amount of insurance coverage.”)