Effective April 24, 2020, the Federal Reserve amended Regulation D to remove the six-per-month limit on transfers or withdrawals from the definition of a “savings deposit.” The amendment is set forth in an interim final rule published in the Federal Register on April 28. Comments on the interim final rule must be filed by June 29, 2020.
The amendment follows the Fed’s announcement that, effective March 26, 2020, reserve requirements were reduced to zero. In its discussion of the interim final rule, the Fed stated that “as a result of the elimination of reserve requirements on all transaction accounts, the retention of a regulatory distinction in Regulation D between reservable “transactions accounts” [without a six-per-month limit] and non-reservable “savings deposit” is no longer necessary.” The Fed also stated that the financial disruptions arising from the COVID-19 pandemic “have caused many depositors to have a more urgent need for access to their funds by remote means, particularly in light of the closure of many depository institution branches and other in-person facilities.”
The Fed’s discussion includes a series of new FAQs that the Fed is publishing on its existing “Savings Deposit Frequently Asked Questions” web page. In addition to other information, the FAQs indicate that the interim final rule does not require an institution to suspend enforcement of the six-per-month limit and allows an institution to suspend the limit on a temporary basis. They also indicate that if an institution suspends enforcement of the monthly limit but has the right under its policies or account agreement to charge a fee to a customer who exceeds the limit, the institution’s ability or right to charge the fee is not impacted.