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Monitoring Passbook Savings Accounts
by Sue Burt, BOL Guru
BIO AND CONTACT INFO
Question: We monitor our money market savings accounts on a monthly basis for excessive transactions. Is it necessary to apply the same monitoring to our passbook savings accounts?
Answer: Technically, passbook accounts are subject to the same savings account limitations as other savings accounts, but for all practical purposes these limitations may not be an issue. Regulation D only requires the monitoring
of transfers to the extent that your passbook savings accounts allow for preauthorized, automatic, or telephonic transfers to another account or to third parties, or checks, drafts, or point-of-sale transfers to third parties. The Regulation D definition of "savings account" is the source of these limitations, and can be found at 12 CFR 204.2(d)(2). Some of the types of transfers that are excluded from the Reg D limitations include:
in-person withdrawals; transfers to the institution to pay loans or other expenses; transfers to other accounts held by the same account holder made in person, by mail, or ATM; or telephone transfers where a check for the withdrawal is mailed to the depositor. Typically, passbook savings account transfers are made via one of the above methods that are not subject to monitoring for purposes of Reg D.
First published on BankersOnline.com 6/17/02
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