Originally Posted by David Merrill
I think there is a distinction though, the bank can only hold a maximum of 85% of it's deposits in "non" lawful money (I take this as meaning FRNs, etc.) This code pertains not to the total reserves, but the type of reserves. Obviously if the total reserves fall below a prescribed %, the bank is at fault, and has to either get funds from somewhere, or decrease it's loans. In the description of that type, the code uses the term lawful money...
15% of deposits must be held in lawful money. If the FRN's in vault fall, that would just mean the bank would have a larger % of lawful money. Now that lawful money has been shown to be different, I wander if those members at the bank can demand their money to be held as such? (***edit - Yeah so i read an earlier thread of you already coming to this conclusion, the belief that coins are lawful money because they fill all the needed requirements, mainly because the are issued from the us treasury) Kind of makes you think about why the Federal Reserve is holding billions in 1 dollar coins? Is there a reserve requirement in written in requiring lawful money to be held in a % within the states?
Another point comes to mind. What if I deposit $1,000 in quarters. To my knowledge, coinage is handled by the US Mint, under US treasury, and not equivalent to FRNs. Would it be too much a request a bank not convert my coinage into FRNs? Are coins lawful money? Though not backed by anything, the fact that they originate from the gov't could be a factor.
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