We have a customer that has a sweep set up on their DDA account and it pulls money from their Money Market account daily to fund the DDA account. We originally thought this would be a Reg D violation, but someone said that it isn't since both accounts are at our bank. Any help would be appreciated!

'Someone' is wrong. Any withdrawals over 6 per month is a violation of Regulation D unless they are made in person.

The section she is referring to is Section 204.2(d)(2). This is what she said, "The following types of transfers from a savings deposit are permissible in unlimited numbers: Section 204.2(d)(2) Automatic (preauthorized) transfers for

the purpose of paying loans at the same institution Transfers or withdrawals made by mail, messenger, automated teller machine, or in person as: Withdrawals or

Transfers to another account of the depositor at the same institution."

Close, but not completely true.

The Regulation also allows transfers from the Savings Account to repay loans or associated expenses at the same instution. Also, transfers to an account held by the same person or withdrawals, are allowed by mail, messenger, telephone with check mailed to person, or by ATM in addition to in-person. But, you may set up stricter parameters.

However, as you mentioned, the "someone" is still wrong in this case.

She is mis-interpreting the regulation. The transfers to another account of the depositor at the same institution are: "when such transfers or withdrawals are made by mail, messenger, automated teller machine, or in person or when such withdrawals are made by telephone (via check mailed to the depositor) regardless of the number of such transfers or withdrawals."

In the case you described they are not doing the transfer by mail, messenger, ATM, telephone w/ check, or in person.

This should help you if the person does not want to listen to the fact they are mis-interpreting the regulation: http://www.bankersonline.com/tools/regdlimits_chart.html

Tagging on.... Would a return deposit item be counted for Reg D? What about check printing fees to the bank (we print our own checks)?

Thanks!!

BUMP

I would not count those items against the customers account, as they did not directly control the withdrawal.

We also do not count those. Just electronic transfers and debits initiated by the customer.

We would not charge a savings account for check printing fees.

Thanks!

So to clarify the limited transactions from a savings account -transfers to another account at the same institution whether done by sweep or an automatic scheduled transfer ARE limited to the 6 per month. We were under the assumption that they were only limited IF they were for overdraft protection.

The restricted transactions are those that are generally “prearranged”, such as preauthorized transfers, automatic transfers, telephone agreements, telephone orders, or telephone instructions.

Examples of restricted transfers or withdrawals from savings deposit accounts are as follows:
- Third-party payment made by check, draft, debit card, or similar method
- Any type of telephone order or instruction to pay a third-party
- Any type of telephone order or instruction to transfer money to another of his/her accounts at the same bank.
- Written instructions to pay a third-party at a certain time or according to a certain schedule
- Verbal instructions to pay a third-party at a certain time or according to a certain schedule
- Written instructions to transfer money to another of his/her accounts at the same bank at a certain time or according to a certain schedule
- Verbal instructions to transfer money to another of his/her accounts at the same bank at a certain time or according to a certain schedule
- Automated clearinghouse (ACH) payment or debits


Hope that helps.

What about incoming and outgoing wire fees?

Fees? I would not count a fee.