Regulation

NAFCU urges Fed to raise transaction limits under Regulation D

NAFCU_logo_edited-150x150In a letter to the Federal Reserve, the National Association of Federal Credit Unions urged the board to review the account transaction limitations for savings deposits under Regulation D.

Currently, the Fed is reviewing certain rules related to the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA).

Regulation D imposes requirements on banks with transaction accounts or time deposits, requiring reporting to the central bank. The regulation requires credit unions to reserve against transaction accounts but not against savings accounts and time deposits.

Under the rule, customers of banks and credit unions are limited to six withdrawals from savings or money market accounts. Meanwhile, transfers or deposits into savings or money market accounts are unlimited.

In the letter, NAFCU said a monthly transaction limit is “obsolete and archaic” because members use electronic methods to review and manage their accounts.

“The six-transaction limit imposes a significant burden on both credit union members in attempting to access and manage their deposits and credit unions in monitoring such activity,” the NAFCU letter said. “Should the Board decide not to remove the transaction limitation requirement for savings deposits, NAFCU urges the Board to raise the current limitation from six to twelve transactions.”

Additionally, NAFCU urged the board to revise the rule to detail how the term “occasional basis” is applied as it relates to members who exceed the transaction limits.

“Current guidance on this issue is scant and does not provide sufficient regulatory clarity or certainty for credit unions attempting to comply with this regulation,” the letter said.

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