Answer:
Answer by David Dickinson: Most institutions provide a monthly notice. Reg D does not provide any further guidance, only the following:
“In order to ensure that no more than the permitted number of withdrawals or transfers are made, a depository institution must either:
(a) prevent withdrawals or transfers in excess of the limits, or
(b) adopt procedures to monitor those transfer on an ex post basis and contact customers who exceed the established limits on more than an occasional basis.
For customers who continue to violate those limits after they have been contacted by the depository institution, the depository institution must either close the account and place the funds in another account that the depositor is eligible to maintain, or take away the transfer and draft capabilities of the account."
Answer:
Answer by John Burnett: There is one further piece of information available in the Federal Reserve Regulator Service, at Locator 2-342.2. In part, that FRB Staff Opinion letter of 2/11/1992 reads:
"If an institution monitors a savings account during a month and notifies a customer of transfers in excess of the transfer limits promptly after the excess transfers are discovered, the customer may take appropriate steps to prevent additional excess transfers during the remainder of the month, and the institution may not need to close the account or take other remedial action. On the other hand, if monitoring is performed and notice is given only after the close of the month, the customer who has exceeded the transfer limits early in the statement cycle might have a significant number of additional transfers during the month that will far exceed the transfer limits."
You are subject to criticism if you only monitor at month-end and customers are able to significantly exceed the monthly transfer limits in the regulation.
[Editors Note: As of 7/2/09, the separate limit of three per month for checks, POS debit card transactions, etc., has been eliminated, and those transactions are now only subject to the 6/month limit that applies to other restricted transfers and withdrawals.]
First published on BankersOnline.com 1/2/07
print
share