You have the option, but if you do, they become subject to Regulation CC. Not a bridge I would want to cross.

Your choice. Check out the FAQs

https://www.federalreserve.gov/supervisionreg/savings-deposits-frequently-asked-questions.htm

5. If a depository institution suspends enforcement of the six-transfer limit on a "savings deposit," may the depository institution report the account as a "transaction account" rather than as a "savings deposit"?

Yes. If a depository institution suspends enforcement of the six-transfer limit on a "savings deposit," the depository institution may report that account as a "transaction account" on its FR 2900 reports. A depository institution may instead, if it chooses, continue to report the account as a "savings deposit."

I think the key phrases in the Reg CC definition of account include the fact that it includes "transaction accounts as described in 12 CFR 204.2(e)" and that it "does not include savings deposits or accounts described in 12 CFR 204.2(d)(2), [b]even though such accounts permit third party transfers."

So, if you do change your savings deposits to make them transaction accounts, they will be subject to Reg CC.

Although I don't necessarily consider FRB Services as an arbiter of the fine distinctions between transaction accounts and savings deposits it has included this answer in an FAQ on the elimination of the savings transfer limits. So I can't recommend reporting your savings deposits as transaction accounts unless you want them subject to Reg CC (other than non-NOW-eligible accounts retaining the "reservation of right" provision).



It's FAQ #6, found HERE.

Thank you for the info!

So, just to get this straight, do we change our account opening disclosures eliminating the six transfer limitation or do we leave it and just not monitor - that would be saying one thing and doing another

Depends on if you are eliminating the restriction. Business decision.

If you are going to eliminate the limitation, you can update your account disclosures for accounts opened going forward. You do not have to notify existing customers via a change in terms, but may elect to.

As noted in the FAQthere is no mandated notification method.

Suppose a depository institution has account agreements with its "savings deposit" customers that require the depository institution to enforce the six-transfer limit. Suppose further that the depository institution would like to amend those account agreements so that the depository institution no longer has a contractual obligation to enforce the six-transfer limit on its "savings deposit" accounts. Does the interim final rule require the depository institution to amend those agreements in any particular way?

No. The interim final rule does not specify the manner in which depository institutions that choose to amend their account agreements may do so.

If we completely eliminate the six transfer restriction, and change our disclosure for account opening going forward, and then the 6 transfer restriction is made a requirement again, we would have to redisclose to all savings customers

I would just leave everything alone and just quit monitoring and come back and visit this in a year and figure out what you want to do, if anything.

OK, sounds good - thank you

Will this be a UDAAP issue if our disclosures say we limit them to 6, but then do not monitor and let them do as many as they want? Just wondering if we need to let customers know if we are 'temporarily suspending' the six per month limit, so our disclosures are not deceptive. That would also give us time for the Fed to put out a final rule as well as decide what we might want to do on a permanent basis.

Just use your common sense here. Giving customers more access to their funds isn't a UDAAP issue. Where is the consumer harm in that?

I do recommend informing your customers concerning a decision to temporarily suspend. It could be a reassuring piece of news for them. But if your plan is to bring the limits back once the economy crawls back, don't include a date in that notice for reactivation of the limits. Just say that you'll give them advance notice concerning reactivation.

Then, while you've got the limitations suspended, review them to decide what your want the limits (if any) to look like when they are reactivated, then start working on how and when to implement those changes. Once it's tested out, give customers plenty of advance notice (at least a month, preferably more) of what will happen and when.

That train of thought sort of ran over me, John: banks could make the business decision to enforce their own transaction limitations on accounts in the future (like the past Reg. D rules), it just wouldn't be according to Reg. D. Or am I misinterpreting your meaning.

That would be common sense to me, but our auditors (some of which are ex-examiners) would say it is deceptive because we are lying to our customers. We are telling them a six/month limit, so they think they are limited when actually they are not. Huge issue? Probably not.

We would say temporarily suspended until we decide what to do going forward.

Thanks!

What about customers who had their savings accounts closed in recent months for exceeding the limit three times? I'm thinking the whole 12-month rolling calendar is also a non-issue now. Seems and obvious yes as I type this but my brain is on overload these days. I'm guessing we are able to open a saving account again now even if they are still within the 12 month window?

I don't see any reason to say no to a customer who inquires about a new savings/money market account.

I might as well apply for citizenship in the state of confusion!

Send me an application also!!!

We are preparing to revise our disclosures for the July 1 Reg CC changes. If we have made the business decision to stop monitoring, it seems reasonable that we also remove from our TIS brochures at the same time as the Reg CC changes. Is anyone else thinking along these lines?

Fiserv has already sent an announcement about spec changes. The REG D MAXIMUM COUNT can be adjusted to eliminate suspect transactions for tracking. To adjust or suspend fees a different area of the specs is accessed.

I'm a little concerned that by removing the maximum count that fees will not be assessed. Can someone that is more familiar with the specs advise? Are these connected?

If we have decided to keep the transaction limitations in our brochures/disclosures, but suspend monitoring, are we required to provide notice to our customers?

What would you disclose? That you are no longer following your processes?

From an Audi prospective if you are no longer monitoring, ensure that Policy and Procedure is updated to reflect what you are going to do.

There are no notification requirements in Reg. D concerning changes to Reg. D. If you have disclosed these limitations in your TISA disclosure, your Reg. E disclosure, etc. then you need to follow the change notice rules for those regulations.

1. TISA: (a) Change in terms. (1) Advance notice required. A depository institution shall give advance notice to affected consumers of any change in a term required to be disclosed under Sec. 1030.4(b) of this part if the change may reduce the annual percentage yield or adversely affect the consumer. The notice shall include the effective date of the change. The notice shall be mailed or delivered at least 30 calendar days before the effective date of the change.

2. Reg E: (a) Change in terms notice. (1) Prior notice required. A financial institution shall mail or deliver a written notice to the consumer, at least 21 days before the effective date, of any change in a term or condition required to be disclosed under § 1005.7(b) of this part if the change would result in:

(i) Increased fees for the consumer;

(ii) Increased liability for the consumer;

(iii) Fewer types of available electronic fund transfers; or

(iv) Stricter limitations on the frequency or dollar amount of transfers.

This is an "open-ended" piece of legislation where they have left it up to you. It is no longer required to monitor for these transactions. This has been removed from the Reg. You have no requirement under Reg. D to notify the customer of this.

Since neither TISA or Reg E are triggered with this change, I am missing your point as far as change of terms disclosure requirements.