Contractual Clearing Balance Law and Legal Definition

According to 12 CFR 204.2 [Title 12 -- Banks and Banking; Chapter II -- Federal Reserve System; Subchapter A -- Board of Governors of the Federal Reserve System; Part 204 -- Reserve Requirements of Depository Institutions (Regulation D)] contractual clearing balance means “an amount that an institution agrees or is required to maintain in its account at a Federal Reserve Bank in addition to any reserve balance requirement. An institution that has a reserve balance requirement of zero may still have a contractual clearing balance.”