What is the normal procedure when a customer has violated Reg D so many times that we have to close their account, and they come back in later and try to open another one? Its my opinion to put some kind of restriction on this, but I couldn't find any guidance in the reg (unless I'm missing it). Do other banks normally just say no forever, put a time restriction, or not put any restriction at all? Can anyone offer any guidance?

We don't close the account, we convert them to a DDA account. We don't say "no" if they want to open another restricted transaction account in the future. We charge a fee (per transaction) if you go over your regulatory limit and your account is converted if you go over your limit either two statement cycles in a row OR 3 times in a year.

I keep pushing for cutting off restricted transactions after 6 and not allowing them to go through, but that's a different topic. My previous employer did this and I liked that solution better.

Thanks for the input. We usually try to get them to open a checking account as well, because it makes more sense for everybody if they had a transaction account, since they're obviously using it for that purpose. But I've had some stubborn customers want to say, "well okay if we have to close it lets just open a new one." Which is obviously not correcting any problem. Shouldn't there be some time frame? Like, okay lets wait a few months and then we'll try another savings account. Does anybody else do that? Aggs, does your institution allow the customer to immediately open another account if they choose?

I've recommended to clients in the past that they implement a minimum 6 month waiting period between non-transaction account openings for those that have violated Reg D in the past.

That makes good sense to me J Hunt, when you say you recommend to "clients" are you an auditor?

I have worked at a variety of banks for more than 20 years and recently started a consulting business to assist with compliance related services. {not intended to be construed as a marketing/solicitation statement}