Well put.

Adam....thank you so much for this explanation!!!

The light is on a dimmer switch and slowing coming on.....

You will be getting some Call Report revisions that will have to be made due to the Fed's definition changes for savings deposits and transaction accounts. They should be coming out by June. The most likely changes will be in the instructions, rather than the Call Report itself. Whether you will have the flexibility to report savings deposits as transaction accounts or not will depend on what the FFIEC says, not the Fed's loose instructions for the FR 2900.

I'll be presenting a special ONE-HOUR webinar on the Fed's elimination of savings deposit transfer and withdrawal limitations at 2:30 ET on Monday, May 18. Register now for Limits on Savings Account Transfers -- An Update.

Any problem with keeping the savings and MMKT Account "as is" but just stop sending letters and closing accounts if the disclosed withdrawal limits are exceeded?

No.

I agree with Randy and to me, it seems like that really was the point of the rule - to allow you to just stop monitoring and enforcing withdrawal limits without changing anything else.

FYI - The Federal Reserve updated their FAQs yesterday to clarify what I explained previously: that savings deposits are still not subject to Reg CC holds.

https://www.federalreserve.gov/supervisionreg/savings-deposits-frequently-asked-questions.htm
13. How did the recent amendments to Reg D impact Reg CC?
On April 24, 2020, the Board of Governors issued an interim final rule amending its Regulation D to delete the six per month limit on convenient transfers from “savings deposits.” Among other things, the interim final rule amended the definition of “transaction account” in 12 CFR 204.2(e) such that the definition now includes accounts described in 204.2(d)(2) (savings deposits).

Regulation CC provides that an “account” subject to Regulation CC includes accounts described in 12 CFR 204.2(e) (transaction accounts) but excludes accounts described in 12 CFR 204.2(d)(2) (savings deposits). Because Regulation CC continues to exclude accounts described in 12 CFR 204.2(d)(2) from the Reg CC “account” definition, the recent amendments to Regulation D did not result in savings deposits or accounts described in 12 CFR 204.2(d)(2) now being covered by Regulation CC.

They've also updated the FAQ to make it clear that they don't intend to return to reserve requirements or to add back regulatory limits on savings deposit transfers/withdrawals.

The Fed could have made matters a lot clearer from the outset if it had made those statements and the statement about Reg CC on April 24, and added "eliminate" or "stop" to their use of "suspend."

The Fed rule writers seem to have forgotten where they left their "banker hats." They used to be better at anticipating some of the questions bankers might have about their rules.

John-

After attending your webinar yesterday, I noticed in the handout you included a statement that "subaccounts" are now gone. Does this mean we no longer need to provide the subaccount disclosure? Can you elaborate more?

As we discussed "off-line," sub-accounts aren't really as relevant to the changed definition of savings deposits as they are to the other big Reg D development -- the end of reserve requirements. Subaccounts have been used by many banks to categorize balances as savings deposits (no reserves) when the customer-facing side of the account behaves like a transaction account.

But because there is no longer a reserve requirement, there is no longer a need for subaccounts and if you don't keep them, you don't need the disclosures that go with them.

Can a Bank choose which types of Savings Deposit accounts they want to remove the six withdrawal limits on? For example, can we removed the limit on the standard savings deposit account, but not remove it on the Money Market Accounts?

Of course you can.

We stopped the monitoring of excessive transactions and charging an excessive transaction fee to our customers but we have not updated our new account disclosures. We were waiting until the end of the comment period in case they added it back (to avoid doing a change notice). So now that it's clear that the FED has no plans to add back the transfer limitations, we can update the account disclosures. Just want to confirm that it's not coming back

Thanks,

Under current circumstances - no. But like everything else, nothing is permanent.

Randy, I'm circling back to this. I'm wondering if most who have eliminated the transaction limit have changed their new account disclosures? We took the "sit on the fence" stance, but think we should change our disclosures now for new accounts to eliminate reference to the 6 transaction limit?

Not yet. Still waiving fees. We will be looking at this again in October.

Like CRL we too took the "sit on the fence" stance, we changed nothing and just stopped the back office operation of monitoring for excessive withdrawals....internally we documented that we would do nothing permanent until the final rule came out...

I'm wondering if we should do something permanent....should we change our disclosures to eliminate the reference to the 6 transaction limit....or should we continue to "temporarily suspend"

We also have a Reserve Requirement policy....since there are no longer reserve requirements, should we just delete this policy?

What have others been doing?

I should specify we have a Reg D-Reserve Requirement policy......is a Reg D policy still a necessity?

Since the Federal Reserve could change the reserve requirements at its discretion, unless Reg D is repealed, it's probably a good idea to keep that policy.

The Fed made a change to the definitions of Reg D. To reinstitute transaction limitations, the Fed would have to publish a notice in the federal register, have a comment period and set a future compliance date. The Fed addressed the verbiage of "suspend" when it updated the FAQs in May 2020.

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

Are the recent amendments to Regulation D temporary or permanent?
On April 24, 2020, the Board of Governors issued an interim final rule amending its Regulation D to delete the six-per-month limit on convenient transfers from "savings deposits." The underlying reason enabling the changes in Regulation D is the FOMC’s choice of monetary policy framework of an ample reserve regime. In such a regime, reserve requirements are not needed. As a result, the distinction made by the transfer limit between reservable and non-reservable accounts is also not necessary. The Committee’s choice of a monetary policy framework is not a short-term choice. The Board does not have plans to re-impose transfer limits but may make adjustments to the definition of savings accounts in response to comments received on the Board’s interim final rule and, in the future, if conditions warrant.

Thank you Brian....I was aware of the FAQ update....but since it states that they may make adjustments to the definition of savings accounts in response to comments....I'm really hesitant to make any kind of changes until the final rule comes out.....

I am wondering what others have done....if any of you care to share.....

We too suspended the fees and discontinued monitoring for excessive transactions. We intend to keep the accounts priced as they are with an excessive transaction fee. Similar to any other account with excessive transactions. We will just charge the fee, but we will no longer be sending warning letters.

Will be sending all MMDA/SAV customers a statement message to announce that we have been waiving the fee due to the pandemic, but intend to start assessing again beginning XX/XX/XXX.

Will be revising TISA disclosures to revise the language about converting to another account type.

I've checked other banks websites in our area and so far I have not found any that have changed their pricing.

We never charged any fees.....we just stopped the entire monitoring process...we don't want to go back to monitoring if we don't have to.....it's labor intensive for us....

I attended a webinar that stated if we totally do away with transaction limitations then at some point we are going to have to classify savings accounts as transaction accounts which we don't want to do....the suggestion made was to limit to 24 transactions....we don't want to do this if it is not necessary to do....

Without a final rule that defines a savings account, are we ok to still not change anything for now?

Have our disclosures still show the 6 limitations and just not enforce it?

The instructor from that webinar must not have read the FAQs.

How did the recent amendments to Reg D impact Reg CC?
On April 24, 2020, the Board of Governors issued an interim final rule amending its Regulation D to delete the six per month limit on convenient transfers from “savings deposits.” Among other things, the interim final rule amended the definition of “transaction account” in 12 CFR 204.2(e) such that the definition now includes accounts described in 204.2(d)(2) (savings deposits).

Regulation CC provides that an “account” subject to Regulation CC includes accounts described in 12 CFR 204.2(e) (transaction accounts) but excludes accounts described in 12 CFR 204.2(d)(2) (savings deposits). Because Regulation CC continues to exclude accounts described in 12 CFR 204.2(d)(2) from the Reg CC “account” definition, the recent amendments to Regulation D did not result in savings deposits or accounts described in 12 CFR 204.2(d)(2) now being covered by Regulation CC.

Yes, you have the option to sit and wait for a final rule that may clarify the distinction (if any) between a savings deposit and a transaction account. You can leave your disclosures as is if there is any chance you will revert to enforcing the old limits. But I do hope you informed customers that the limits were suspended until further notice.