Legal Memorandum: Agents for Deposits

Issue: Whether a church expansion fund is a ‘financial institution’ subject to any North Dakota state or federal credit union or financial institution laws?

Area of Law: Banking & Finance Law
Keywords: Financial institution; Church expansion fund; An agent for deposits
Jurisdiction: North Dakota
Cited Cases: None
Cited Statutes: N.D. Cent. Code Sec. 6-10-01 (1999); 12 U.S.C. Sec. 4301 et seq. (1999)
Date: 10/01/2000

Accepting “deposits” may subject a church expansion fund to certain state and federal disclosure laws regarding deposits even if a church expansion fund is not considered a “financial institution.”  For example, North Dakota law provides that a license is required to act as an agent for deposits:

No person, partnership, association, corporation, or limited liability company, except as otherwise authorized by law, may engage in the business of receiving, as agent for another, moneys for the purpose of deposit in a bank, without first having applied to the commissioner and received a license so to do.

N.D. Cent. Code Sec. 6-10-01 (1999).  Thus, if a church expansion fund places any of the funds it receives from individuals and characterized as “deposits” into a bank or other financial institution, it may be subject to licensing requirements under North Dakota law.  In addition, the Truth in Savings Act may apply if a church expansion fund places “deposits” from individuals into a financial institution.  12 U.S.C. Sec. 4301 et seq. (1999).


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