Removing Barriers Blog

CUNA Urges Fed Board to Consider Increasing Reg D Transfer Limit
Posted May 13, 2019 by Chandler Schuette

Today, CUNA filed a comment letter with the Federal Reserve Board in connection with an advance notice of proposed rulemaking (ANPR) on Regulation D regarding reserve requirements of depository institutions. Specifically, the Board is considering whether to propose amendments to Regulation D to lower the rate of interest paid on excess balances (IOER) maintained at Federal Reserve Banks by eligible institutions that hold a very large proportion of their assets in the form of balances at Reserve Banks. While the specifics of the Board’s ANPR would not impact credit unions, we decided to use the opportunity to urge the Board to consider amending Regulation D to increase the current regulatory limit of six transfers per month from a savings account.

Whether as part of or outside the Board’s current inquiry into Regulation D, we urge the Board to examine how it can increase the Regulation D transfer limit beyond six transactions per month. We believe such threshold is arbitrary, antiquated, and unnecessary. At the very minimum, the Board should increase the transfer limit to at least 25 transactions per month. For the consumer protection issues discussed in our letter, we believe it is long overdue for the Board to update this limit that has its roots in the early 1980s.