2  A bank employs deposits for its own lending and investment activities and can benefit from check float. However, banks with trust powers are urged to have written policies and procedures governing the use of own-bank deposits. For example, the FDIC's Trust Examination Manual provides as follows:

Trust departments should have written policies governing the use of own-bank...demand and interest-bearing deposits. As with other own-bank related investments, the fiduciary bank should fully document its review of alternative investment vehicles, the competitiveness of interest rates, and its approval procedures with a view to protecting the interests of both the beneficiaries and the institution. (Section 8(E)(3)(a).)
To properly manage the conflict of interest and self-dealing inherent in own-bank or affiliated bank demand deposits, the amount held in demand balances of each account should be restricted to the minimum necessary. There have been a number of beneficiary lawsuits in recent years that focus on the fiduciary's management of demand deposits and its concurrent use of the funds for lending and investments, together with the benefit of float gained by the bank. (Section 8(E)(3)(b).)