Fed Loosens Limits on Withdrawals
A statement entitled, "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," tells us, "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." It adds, "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." See also the Fed's "`Savings Deposits Frequently Asked Questions," which comments, "A 'savings deposit' is a deposit or account, such as an account commonly known as a passbook savings account, a statement savings account, or as a money market deposit account (MMDA), that otherwise meets the requirements of §204.2(d)(1) and from which, under the terms of the deposit contract or by practice of the depository institution, the depositor may be permitted or authorized to make transfers and withdrawals to another account (including a transaction account) of the depositor at the same institution or to a third party, regardless of the number of such transfers and withdrawals or the manner in which such transfers and withdrawals are made."
