I have a senior operations officer who refuses to do anything about excess trans MMDAs other than reclassifying them for reserve purposes. He said it was too much trouble and how they handle it now is fine.
I have documented my recommendation to monitor these accounts and transfer them to NOWs or non-int checking accounts, to no avail.
I have had Blair Rugh (Kirchman) speak to this guy recommending the same.
My thoughts are, I am only the compliance officer and can only make recommendations and if management refuses to accept them, I should just keep it documented and shut up!
Do I just keep recommending it year after year and documenting it? I am the "new" compliance officer and therefore not worthy of this particular "gentleman" who's been doing things his way for a million years.
I guess, I feel a little better, but advice is appreciated.

I can understand your frustration. We are an FDIC insured institution and based on my very recent experience with the new Compliance Exam procedures, this would fall under Compliance Management. If senior management is not listening to you on simple issues and not following through with your recommendations, it could mean that larger issues are falling through the cracks and your bank could find itself under a big black cloud. The regulators are taking a top down approach and are taking the new procedures seriously.

Good luck!

Yes - I'm assuming that the account was "reclassified" as an account that the customer was eligible to maintain. In the case of a corporation, if it was no longer permitted to maintain an MMDA because of excessive transactions, it would have to be a non-interest-earning account. It could still be called an MMDA if the bank wanted to do that. My point was that the name of the account doesn't drive the reserve reserve requirements, it's how the account functions.

Actually, there is nothing wrong with the handling of this, e.g. re-classification to transaction accounts, so why pursue a change at all? In theory, reclassification costs money with a higher reserve required that does not pay interest, but that all depends on the liability structure of each institution and in some cases there would not be a monetary impact of reclassification.

Just make sure the reclassification is actually happening and move on.

I had the same problem once, I solved it by just telling Accounting that they would have to reserve another XX million due to our reservable transaction accounts increasing. They promply freaked out about and I pointed them in the direction to the stubborn manager....I let Accounting and Operations fight it out.....

needless to say... we now monitor and close accounts for Reg D violations.

Although reclassing these accounts (taking care that no one ends up with an interest-bearing checking account without qualifying for same) may take care of the bank's liability on the issue, and although there may actually be no bottom-line change if you already have plenty of reserves, I'd be concerned about the complications this approach presents. Why would a bank want to have "regular" MMDAs and non-interest bearing MMDAs (or savings or NOWs). Doesn't this just present a cluttered, confusing landscape for customer-contact people?

No one hates the archaic and overly complicated savings transaction rules more than I (although they do provide employment for operations compliance people and regulators), but methinks this overbearing upper management person needs to get with the program and stop being an obstructionist. In the meantime, the "newbie" compliance officer will have to document in a CYA maneuver if attempts at effecting change continue to be futile.

It's sad, but it's life!