Local Rule LOCAL RULE 67.1: DEPOSIT OF REGISTRY FUNDS BY THE CLERK IN INTEREST-BEARING ACCOUNTS

LOCAL RULE 67.1 DEPOSIT OF REGISTRY FUNDS BY THE CLERK IN INTEREST-BEARING ACCOUNTS

(a) All funds deposited in the Registry of this Court, pursuant to 28 U.S.C. §2041 shall be deposited with the Treasurer of the United States through the Federal Reserve Bank or a depository designated by him to receive the Registry funds. Thereafter the investment of any such funds in interest-bearing instruments in accordance with the following provisions shall be at the initiative of the interested party or parties through counsel of record. It is counsel's responsibility to see that the provisions of this rule are complied with.

(b) Pursuant to Rule 67, Fed.R.Civ.P., counsel shall apply to the judge to whom the case is assigned for an order directing the Clerk to accept the funds for deposit and to invest the funds in an interest-bearing instrument in a financial institution insured by the FDIC. The Order will include the following:

(1) The amount to be invested;

(2) The type of account or instrument in which funds are to be invested (i.e., certificate of deposit or treasury bills, etc.);

(3) The length of the term of investment; and

(4) Wording which directs 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.

(c) Whenever an Order is entered directing the investment of funds deposited in the Registry of the Court, it shall be the responsibility of counsel to cause a copy of such Order to be served personally upon the Clerk of the Court, or on the Chief Deputy Clerk, in the absence of the Clerk, AND on the Financial Deputy.

(d) The Clerk shall take all reasonable steps to assure that the funds are invested as quickly as the business of the Clerk's office will allow.

(e) The party obtaining the Order directing the investment of funds at interest will verify that the Clerk has invested the funds as directed.

(f) Failure of the party to personally serve a copy of the Order to invest funds as specified in this Rule, or failure to verify that the funds have been invested pursuant to this Rule, shall release the Clerk and any of his deputies from any liability for loss of interest which could have been earned on the funds.

(g) Early withdrawal of funds from interest-bearing instruments which result in a loss of interest penalty will be the sole responsibility of counsel making the request.

(h) Under no circumstances shall counsel purchase an interest-bearing instrument in his own name or in the name of the Clerk for subsequent deposit into the Registry. This is the sole responsibility of the Clerk of the Court or his designated deputy.

(i) Interest-bearing instruments shall not, under any circumstances, be endorsed by the Clerk of the Court to a payee. Prior to disbursement, interest-bearing instruments must be converted to a cashier's check and deposited with the Treasurer of the United States for subsequent payment.

(j) Funds deposited in the Registry Account by personal or corporate check, whether or not the funds are to be invested in an interest-bearing account, shall be received subject to collection. Said monies shall not be paid from the Registry for a period of three (3) weeks after receipt therefor.

(k) Pursuant to 28 U.S.C. §2042, disbursement of funds held in the Registry of the Court will be made only upon Order of the Court.

(l) The Clerk shall be allowed seven (7) business days following receipt of an order for disbursement of funds from the Registry Account, subject to the above paragraph (j).

(m) Pursuant to notice published in the October 24, 1990, edition of the Federal Register, the Clerk of the district court is required to assess a fee for handling funds deposited with the court in criminal and non-criminal proceedings held in interest-bearing accounts. The fee will be a charge of 10% of the income earned regardless of the nature of the case underlying the investment. The fee is effective with deposit of funds received on or after December 1, 1990. The Clerks of the United States District Court for the Eastern and Western Districts of Arkansas shall deduct the 10% fee on interest earned prior to any distribution without further order of the Court for subsequent deposit to the Treasurer of the United States.

Adopted and effective July 14, 1986 Amended March 26, 1992 Amended November 10, 2009 1 Interpleader funds under 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 Courts Registry Investment System (CRIS) and administered by the Administrative Office of the United States Courts (Director is the Custodian). The Custodian is responsible for meeting all DOF tax administration requirements and, effective December 1, 2016, is authorized to deduct a fee of 20 basis points on assets on deposit in the DOF, assessed from interest earnings. See District Court Miscellaneous Fee Schedule.