We had a question regarding a Deluxe check order debit from a customer's account. The customer ordered checks and Deluxe then sent through a debit to the customers account to pay for the checks. Our system counted this debit as a draft, thus it fell under the limitations of no more than 3 of the six transfers under Reg D may be made by check, draft, debit card or similar order to a third party. Is this correct? What is the definition of "draft". Does an ACH debit count as one of the three transfers allowed or is it just one of the six allowed?
I think I have thought about it so long that I have confused myself. Thanks for any info.

I wouldn't count it against either the 3 or the 6. Even though the debit goes to a third party, I would characterize this as an account service charge. I do not believe they are subjest to the transaction limitations.

I'm not so sure I'd count it as a service charge because it is not considered a fee when deciding whether an account is free. I think the question still comes back to what is the difference between a draft and an ACH debit.

Doesn't the fact that it is a bank initiated charge make any difference?

Reg D:
(d)(2) The term savings deposit also means: 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 Sec. 204.2(d)(1) and from which, under the terms of the deposit contract or by practice of the depository institution, the depositor is permitted or authorized to make no more than six transfers and withdrawals, or a combination of such transfers and withdrawals, per calendar month or statement cycle (or similar period) of at least four weeks, to another account (including a transaction account) of the depositor at the same institution or to a third party by means of a preauthorized or automatic transfer, or telephonic (including data transmission) agreement, order or instruction, and no more than three of the six such transfers may be made by check, draft, debit card, or similar order made by the depositor and payable to third parties.

It looks to me that the depositor has to initiate the transfer or debit for it to be counted.

In general, ACH debits fall into the 6 bucket and not the 3 bucket (with an exception here and there). However, I'm in the camp that would omit this debit entirely.

Let's get reasonable about Regulation D here (some will be shocked at this coming from my fingertips!). This isn't a recurring thing. Check order fees, even if they fall into the 6 bucket, ought not push a customer over the limit by themselves, since they are clearly not transactions done by the customer with any thought of counting them toward the limit. They are innocent little vagaries that pop up once in a check order that shouldn't reasonably be counted against the customer's overall record of complying with the rules.

Perhaps that is put inelegantly. But I think my message is that you need to look at the customer's overall record, not just a one-time event, to determine whether there's a D violation. I don't think a reasonable regulator (or even an unreasonable one) will criticise your ignoring check order debits in the overall scheme of Reg. D monitoring.

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I'm not so sure I'd count it as a service charge because it is not considered a fee when deciding whether an account is free. I think the question still comes back to what is the difference between a draft and an ACH debit.

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An NSF fee doesn't count for deciding whether the account is free either, but I'm sure we can agree that an NSF fee would not be counted.

This is a fee for account set-up; The only reason the debit is paid to a third party is that the bank is not in the printing business and contracts with the checkprinter to provide the service. The customer has no control over whom is chosen by the bank to provide the service. In essence, this is a bank fee.

Now, if the customer orders checks directly from Deluxe after these run out, then I agree that the charge for these checks is part of the 6 (if ACH).

I like Maria's test: If the transaction occurs because of something outside their volition or control, it should not be counted in the ransaction test.