Regulation D, six transaction rule still around?

[jim584672]

Last year the Fed revoked the six transactions limit on Savings accounts. Does anyone know why some banks are still enforcing the rule? Did I miss something?

 

[audreyh1]

Too lazy to change?

 

[jazz4cash]

I just saw this in the 2021 CD Rates and Bank Promo thread. I know for sure BofA was still using popup warnings on every savings account transfer as of a few days ago.

 

[Done]

From the FAQs:

“The interim final rule permits depository institutions to suspend enforcement of the six-transfer limit, but it does not require depository institutions to do so.”

It’s at the discretion of the bank. The suspension of the transfer limit was due to the pandemic, but they say they have no plans to reinstate it.

 

[Koolau]

Last year the Fed revoked the six transactions limit on Savings accounts. Does anyone know why some banks are still enforcing the rule? Did I miss something?

Okay, I admit I know nothing about this (the rule itself or the revocation thereof.) Is there a tutorial? What is the rule? Why was there a rule? Why was it suspended? Sorry but I never mess with my couple of small savings accounts, so don't want to run afoul of some rule. Thanks.

 

[jazz4cash]

It’s a stupid rule. To help ensure that banks retain an adequate quantity of reserves, they restrict the frequency of withdrawals, but there are loopholes so really the withdrawals are not entirely restricted, enforcement is lax and inconsistent.

 

[Koolau]

It’s a stupid rule. To help ensure that banks retain an adequate quantity of reserves, they restrict the frequency of withdrawals, but there are loopholes so really the withdrawals are not entirely restricted, enforcement is lax and inconsistent.

Hmmm. Sounds like a rule the banks induced the Feds to put in place to allow them to restrict their customers' ability to do what they want with their own money. I'm betting it's one of those rules they dust off every once in a while if their reserves are bit low. Since it's a Fed regulation, they can say "our hands are tied - it's not OUR rule." It probably IS their rule - but keep in mind I never heard of it before, so YMMV.

 

[mrfeh]

I asked Ally about this - they said while the rule is still enforced, they will refund any fees associated w/ exceeding the limit.

Sounds like they just don't want to modify their code to remove the limit.

 

[jazz4cash]

I always suspected the real intent was to suppress criminal activity.

EDIT: I just transferred funds from a savings acct to checking at BOA with no warning of exceeding the 6 per cycle limit so I guess they have adopted the change but I never saw any notice.

 

[MJ]

It was an annoying and useless rule especially when banks like Ally allowed you to create lots of online accounts, each with its own 6 withdrawal limit.

 

[jazz4cash]

It was an annoying and useless rule especially when banks like Ally allowed you to create lots of online accounts, each with its own 6 withdrawal limit.

+1. I just learned that amendments to Reg D also reduced financial reserve requirements to zero! That sounds dicey. I’m trying to assess if the revisions are temporary.

 

[Koolau]

+1. I just learned that amendments to Reg D also reduced financial reserve requirements to zero! That sounds dicey. I’m trying to assess if the revisions are temporary.

That does sound dicey. Who's minding the store?