Does the Bank "Own" Your Deposited Money?

Many people have been saying that you don't owned the money in your checking or savings account in the US.

Here's what the Wikipedia says:

In most legal systems, a bank deposit is not a bailment. In other words, the funds deposited are no longer the property of the customer. The funds become the property of the bank, and the customer in turn receives an asset called a deposit account (a checking or savings account). That deposit account is a liability of the bank on the bank's books and on its balance sheet. Because the bank is authorized by law to make loans up to an amount equal to a multiple of the amount of its reserves, the bank's reserves on hand to satisfy payment of deposit liabilities amounts to only a fraction of the total amount which the bank is obligated to pay in satisfaction of its demand deposits.

via Fractional reserve banking - Wikipedia, the free encyclopedia.

Does that apply in the US? Here's my current take on the subject:

"§ 330.5 Recognition of deposit ownership and fiduciary relationships.

"(a) Recognition of deposit ownership--(1) Evidence of deposit ownership. Except as indicated in this paragraph (a)(1) or as provided in § 330.3(j), in 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. Despite the general requirements of this paragraph (a)(1), if the FDIC has reason to believe that the insured depository institution's deposit account records misrepresent the actual ownership of deposited funds and such misrepresentation would increase deposit insurance coverage, the FDIC may consider all available evidence and pay claims for insured deposits on the basis of the actual rather than the misrepresented ownership."

Now, I'm not saying that's the end of it. Different courts/judges weigh things differently.

That administrative law (pursuant to statute and controlling unless overturned) is for deciding deposit insurance. The federal government there is dealing directly with the issue of funds ownership. What I was wondering while reading that concerned aggregation, but the rules actually then go on to talk about that. I continued looking down, and ran into this right away:

"§ 330.6 Single ownership accounts.

"(a) Individual accounts. 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. Exception: Despite the general requirement in this paragraph (a), if more than one natural person has the right to withdraw funds from an individual account (excluding persons who have the right to withdraw by virtue of a Power of Attorney), the account shall be treated as a joint ownership account (although not necessarily a qualifying joint account) and shall be insured in accordance with the provisions of § 330.9, unless the deposit account records clearly indicate, to the satisfaction of the FDIC, that the funds are owned by one individual and that other signatories on the account are merely authorized to withdraw funds on behalf of the owner."

It's perfectly clear that the federal government under "Codified to 12 C.F.R. § 330," I own my money/funds at least where FDIC insurance is concerned. That's no small matter. I'd sure waive it under a judge's nose who tried to tell me I don't "own" my money on deposit in my account. Whether the judge would rule otherwise would remain to be seen.

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  • Tom Usher

    About Tom Usher

    Employment: 2008 - present, website developer and writer. 2015 - present, insurance broker. Education: Arizona State University, Bachelor of Science in Political Science. City University of Seattle, graduate studies in Public Administration. Volunteerism: 2007 - present, president of the Real Liberal Christian Church and Christian Commons Project.
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