Regulation D Limitations Suspended…What Does it Mean?

On Friday, April 24th, the Board of Governors of the Federal Reserve System published the amended Regulation D (Reserve Requirements of Depository Institutions) to eliminate transaction limitations on certain kinds of transfers and withdrawals that may be made each month from “savings deposits.” The amendments are intended to allow depository institution customers more convenient access to their funds and to simplify account administration for depository institutions.

There are no mandatory changes to deposit reporting associated with the amendments. The effective date was April 23, 2020. Regulation D distinguishes between reservable “transaction accounts” and non-reservable “savings deposits” based on the ease with which the depositor may make transfers (payments to third parties) or withdrawals (payments directly to the depositor) from the account. Prior to this interim final rule, Regulation D limited the number of certain convenient kinds of transfers or withdrawals that an account holder may make from a “savings deposit” to not more than six per month (six transfer limit).