I had a really good question (at least I thought so) asked to me by one of our branch managers earlier and I'm just not sure how to respond. She was wondering if we were going to continue to penalize people that go over their Reg D transfer limits from their savings account now that many people are self quarantining and not able to get out of their homes. We just closed our lobbies this morning, however, our drive-thrus are open, but many people are not going out at all, especially older people and those with health issues. Should this be something the bank makes a decision on or should we wait and see if there is any kind of regulatory release addressing it? Is anyone else making exceptions for these transfers right now?

So far there have been no temporary amendments to the Reg, at least not that I'm aware. My advice would be to continue your normal business in this regard since it is driven by regulation. If an amendment is passed and provides a beginning date, you can always go back to that date refund any fees charged. Find other ways to assist your customers that doesn't break regulation, such as temporarily waiving maintenance fees.

The Fed has come out and removed reserve requirements. While this doesn't get rid of the Reg D withdrawal limits, it would allow you the option to convert savings accounts to transaction accounts with no need to reserve against them. It is unclear as of now whether or not this change is permanent or temporary.

https://www.federalreserve.gov/newsevents/pressreleases/monetary20200315b.htm

Thank you both for your responses.

The Fed's rule says nothing about fees you charge your customers. It is only concerned with your ability to keep them from exceeding the 6/month transfer limitation. So you certainly can waive the fees without triggering any examiner critique.

I plan to waive the fee; however I am concerned about customers hitting the 3 months in a rolling 12 month period very quickly it this stretches out. Quite honestly the 1st and 2nd letters do not get their attention, it is the fee that gets their attention.

I am also concerned about customers hitting the 3 months in a rolling 12 month period very quickly. Our state is currently under a Safer at Home order and I anticipate more will be using electronic means to pay bills and transfer funds. I am feeling a little guilty sending out the letters reminding them to stay within the limits.

Personally, under the circumstances, I think this might be about number 152 on my list of a 100 things to worry about right this minute.

I am in Randy's camp on this question. With reserve requirements knocked to $0 it's not likely that strict adherence to the §204.2(d)(2) definition of "savings account" is going to be a top priority with regulators.

That said, you can't totally ignore the matter and give customers free rein on transfer limits.

Thanks again for all the responses on this post. I was out last week as our bank has went to alternating groups of employees working by week. We don't charge a fee when the customer goes over their limit, we actually shut down their transfer abilities when we send out the 2nd notification letter. I was also feeling kind of guilty doing this when we are being told by state and federal government to stay home. Looking at my report today after being out for a week, we have a lot of customers who went over their limits during the last week. I have emailed my supervisor to see if we could make a bank decision to not shut down transfer abilities during this time, at least until the lobbies open back up, and simply have our CSR's call customers and discuss options to keep them from consistently going over their limit. I would of course keep detailed notes as to why we did this, when we started and when we stopped.

Thanks again!

The FRB basically clarified that you still have to monitor for excessive withdrawls but should attempt to work with customers, by converting/reporting applicable accounts as transaction accounts. See the FAQ here, starting with question 7: https://www.frbservices.org/resources/central-bank/faq/reserve-account-admin-app.html#collapsea7

Today, Reg D was amended. Restriction on transfers has been removed.

Do you have a source for that?

Thank you!

I am confused. Is this effective today or out for comment?

The suspension of the limits is effective as of 4/23/2020. This is an interim final rule, so the effective date for the rule is date of publication in Federal Register, but also open for any comment from the public for period specified - 60 days after publication in FR.

Federal Reserve Board announces interim final rule to delete the six-per-month limit on convenient transfers from the "savings deposit" definition in Regulation D
For release at 10:00 a.m. EDT
The Federal Reserve Board on Friday announced an interim final rule to amend Regulation D (Reserve Requirements of Depository Institutions) to delete the six-per-month limit on convenient transfers from the "savings deposit" definition. The interim final rule allows depository institutions immediately to suspend enforcement of the six transfer limit and to allow their customers to make an unlimited number of convenient transfers and withdrawals from their savings deposits at a time when financial events associated with the coronavirus pandemic have made such access more urgent.
The regulatory limit in Regulation D was the basis for distinguishing between reservable "transaction accounts" and non-reservable "savings deposits." The Board's recent action reducing all reserve requirement ratios to zero has rendered this regulatory distinction unnecessary.
Concurrently, the Federal Reserve is making temporary revisions to the FR 2900 series, FR Y-9, and FR 2886b reports to reflect the amendments to Regulation D.

Will this change be permanent or will it be reinstated once the pandemic is over?

Thank you RVFlyboy!

I see, on Page 6, that the interim final rule includes the deletion of the provisions in the savings deposit definition that require the bank to monitor savings deposits ex post for violations of the limit. Am I misunderstanding that provision?

That was posted by Adam to this thread before the release today of the new rules.

Thank you! I stay in a state of confusion lately.

The Board finds good cause for making this amendment effective without 30 days advance publication. The amendments relieve depository institutions of a regulatory burden and permit all customers, particularly those impacted by the coronavirus situation, to have increased immediate access to their funds. Implementation of the rule without 30 days advance publication will help both depository institutions and their customers to deal with the unique pressures of the coronavirus situation and to alleviate the adverse impacts it has caused.

The Board believes that any delay in implementing the rule would prove contrary to the public interest. The Board is requesting comment on all aspects of the rule and will make any changes that it considers appropriate or necessary after review of any comments received.

The interim final rule permits, but does not require, depository institutions to suspend enforcement of the six transfer limit. It may also suspend enforcement of the six transfer limit on a temporary basis. The interim final rule also does not require any changes to the deposit reporting practices of depository institutions. Additional information on the impact of the interim final rule is also provided as well as some great FAQ's.

The interim final rule does not require a depository institution to change the way it calculates or reports interest on an account where the depository institution has suspended enforcement of the six transfer limit.

The interim final rule does not specify the manner in which depository institutions that choose to amend their account agreements may do so.

The interim final rule does not require depository institutions to change the name of any accounts or products that have the words “savings” or “savings deposit” in the name of the account or product.

Regulation D does not require or prohibit depository institutions from charging their customers fees for transfers and withdrawals in violation of the six transfer limit. Accordingly, the deletion of the six transfer limit does not have a direct impact on the policies or account agreements of depository institutions that charge such fees to their customers.

The interim final rule does not have any impact on section 204.2(d)(1) of Regulation D. The “reservation of right” continues to
be a part of the definition of “savings deposit” under the interim final rule.

Depository institutions may continue to report these accounts as “savings deposits” on their FR 2900 reports after they suspend enforcement of the six transfer limit on those accounts.

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.”

Decisions to be made.