WASHINGTON (12/29/11)--The Credit Union National Association (CUNA) in a comment letter told the Federal Reserve that it generally agrees with proposed technical amendments to Regulation J, but CUNA also called on the Fed to work with the Consumer Financial Protection Bureau before the Reg J proposal is completed to address some outstanding remittance transfer issues.
Regulation J implements portions of the Federal Reserve Act and the Expedited Funds Availability Act, as well as the Check Clearing for the 21st Century Act and other laws.
The Fed's proposed Reg J changes would clarify that subpart B would continue to apply to a Fedwire funds transfer even if the funds transfer also meets the definition of a "remittance transfer" under Section 919 of the Electronic Funds Transfer Act (EFTA), and Section 919 would prevail if there is an inconsistency between Reg J and Section 919. Changes to Section 919 are expected to be finalized by the CFPB in the near future.
The Fed proposal also incorporates proposed changes to Regulation D, which governs reserve requirements of depository institutions. The Reg D plan, addressed in a separate CUNA comment letter, would simplify the administration of reserve requirements by discontinuing as-of adjustments related to deposit revisions, replacing all other as-of adjustments with direct compensation, and establishing a penalty-free band around reserve balance requirements in place of carryover and routine penalty waivers. (See related Dec. 20 story: CUNA asks for more time for Reg D changes.)
The Reg J proposal harmonizes that regulation with the Reg D changes by removing any references to a Reserve Bank's use of as-of adjustments in connection with a Fedwire funds transfer from Reg J.
The Fed has also proposed amending subpart A of Reg J to clarify that when an institution sends a check or other item for collection to a Reserve Bank, the institution's Administrative Reserve Bank is deemed to have accepted deposit of the item even if the item was sent directly to another Reserve Bank. CUNA said this clarification is "useful," as Reserve Banks currently permit institutions to send checks and other items directly to a Reserve Bank that is not the Administrative Reserve Bank.
For the full CUNA comment letter, use the resource link.