67.2 Deposit of Registry Funds Into Interest-Bearing Account

(a) Receipt of Funds.

(1) Unless an applicable statute requires the deposit of funds without leave of court, no funds governed by Fed. R. Civ. P. 67 shall be tendered to the court or the clerk's office for deposit into the court's registry absent court order signed by a judge.

(2) Unless otherwise provided for elsewhere herein, all funds received by the court or the clerk's office for any case pending or in the process of adjudication shall be deposited with the Treasurer of the United States, in the name and to the credit of this court, pursuant to 28 U.S.C. § 2041.  Such deposits shall be made through depositories designated by the Treasury to accept such deposits on its behalf.

(3) Except as provided in subsection (b)(2) below, the party making the deposit or transferring funds to the court's registry shall electronically serve the order permitting the deposit or transfer on the clerk of court or, in the clerk's absence, upon the chief deputy clerk or financial administrator.

(b) Investment of Registry Funds

(1) Court Registry Investment System

(A) Unless otherwise ordered, the Court Registry Investment System (CRIS), administered through the Administrative Office of the United States Courts, shall be the investment mechanism authorized.

(B) Interpleader funds deposited under 28 U.S.C. § 1335 meet the IRS definition of a Disputed Ownership Fund (DOF), a taxable entity that requires tax administration.  Unless otherwise ordered by the court, interpleader funds shall be deposited in the DOF established within the CRIS and administered by the Administrative Office of the United States Courts, which shall be responsible for meeting all DOF tax administration requirements.

(C)  The Director of Administrative Office of the United States Courts is designated as custodian for all CRIS funds.  The Director or the Director’s designee shall perform the duties of custodian.  Funds held in the CRIS remain subject to the control and jurisdiction of the Court.

(D)  Under CRIS, monies deposited in each case will be “pooled” together with those on deposit with the Treasury to the credit of other courts in CRIS and used to purchase Government Account Series securities through the Bureau of Public Debt, which will be held at the Treasury in an account in the name and to the credit of the Director of Administrative Office of the United States Courts, hereby designated custodian for CRIS. The pooled funds will be invested in accordance with the principles of the CRIS Investment Policy as approved by the Registry Monitoring Group. 

          (i) For non-DOF case funds, an account will be established in the CRIS Liquidity Fund titled in the name of the case giving rise to the deposit invested in the fund. Income generated from fund investments will be distributed to each case based on the ratio each account’s principal and earnings has to the aggregate principal and income total in the fund after the CRIS fee has been applied.

          (ii) For DOF case funds, an account shall be established in the CRIS Disputed Ownership Fund, titled in the name of the case giving rise to the deposit invested in the fund. Income generated from fund investments will be distributed to each case based on the ratio each account's principal and earnings has to the aggregate principal and income after the DOF fee has been applied and tax withholdings have been deducted from the fund.  On appointment of an administrator authorized to incurexpenses on behalf of the DOF in a case, the case DOF funds should be transferred to the CRIS Liquidity Fund or another investment account as directed by court order.

(E) Reports showing the interest earned and the principal amounts contributed in each case will be available through the FedInvest/CMS application and will be made available to litigants and/or their counsel. 

(2) Other Investments and Instruments

Upon motion the court in its discretion may approve an investment mechanism other than CRIS.  Prior to filing the motion, the party requesting approval of an alternate investment mechanism shall first personally deliver the proposed order to the clerk, chief deputy or financial administrator, who shall review the proposed order to confirm it fulfills investment requirements.

A motion to approve an alternate investment mechanism must, at a minimum, address the following:

(A) the amount to be invested;

(B) a designation of the type of account or instrument in which the funds shall be invested;

(C) the name of the depository, which must be approved by the Treasurer of the United States as a depository in which funds may be held;

(D) the form of additional collateral to cover the entire amount of invested funds without regard to FDIC insurance;

(E) a direction to the clerk to deduct from the income earned on the investment a fee not exceeding that authorized by the Judicial Conference of the United States and set by the Director of the Administrative Office of the United States Courts as published in the Federal Register; and

(F) such other appropriate information that may be deemed applicable under the facts and circumstances of the particular case.

Upon court order to deposit and invest registry funds locally, the clerk shall serve as custodian of the account or financial instrument and shall keep such account, certificate of deposit, or financial instrument in a secure and safe place subject to further order of the court.

(c) Investment Fees and Taxes

(1)  The custodian is authorized and directed to deduct the CRIS fee of an annualized 10 basis points on assets on deposit for all CRIS funds, excluding the case funds held in the DOF, for the management of investments in the CRIS.  According to the Court’s Miscellaneous Fee Schedule, the CRIS fee is assessed from interest earnings to the pool before a pro rata distribution of earnings is made to court cases.

(2)  The custodian is authorized and directed to deduct the DOF fee of an annualized 20 basis points on assets on deposit in the DOF for management of investments and tax administration. According to the Court’s Miscellaneous Fee Schedule, the DOF fee is assessed from interest earnings to the pool before a pro rata distribution of earnings is made to court cases.  The custodian is further authorized and directed by this rule to withhold and pay federal taxes due on behalf of the DOF.

(3)   In cases in which funds are ultimately disbursed to the United States or to agencies or officials thereof, the clerk shall provide to those agencies or officials any relief from the CRIS fees approved by the Director of the Administrative Office on application filed by the United States Attorney or any other government counsel

(d) Cash Bail

If cash bail in an amount in excess of $10,000 is deposited with the court, it may be placed in an interest-bearing account upon motion of the submitting party.  The deposit shall comply in all respects with the requirements of this rule except that there shall be no administration fee assessed.

History

(§§ (a)(2)-(4), (b)(1)-(2) and (c)(1)-(3) amended 12/1/11; (c) amended  12/1/16; amended generally 4/1/17)