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Notification of Excessive Transfers
John Burnett, BOL Guru
Guru Bios
Question: What are the Reg D requirements for notices of excessive transactions? By this I mean do we have to produce a notice at the time of the excessive transaction, or is it enough to provide a monthly notice at the time a statement cuts?
Answer: There is no specific requirement for a notice. All of the regulatory discussion behind the rule (in the Federal Reserve Regulatory Service, for example, and in unofficial discussions with regulators) suggest that communication with the offending customer is key to the compliance effort. The Fed has opined that waiting until the end of the statement cycle is not sufficient, since the customer would be permitted to make substantial numbers of transfers during the cycle, before contact takes place. The regulators expect that you will have a system in place that alerts the bank to the overlimit transfer counts when they occur, and that the bank will take action as soon as the customer's activity breaches the limits, so as to correct the customer's future behavior as soon as possible.
First published on BankersOnline.com 7/31/06
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