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#17086 - 05/07/02 07:47 PM Reg D Question
conniew Offline
100 Club
Joined: Apr 2002
Posts: 155
St. Louis, MO
Reg D limits the number of third-party checks to no more than three per statement cycle or four-week period. The institution is required to either prevent or adopt procedures to monitor after the fact and notify customers who exceed the limits on more than an occasional basis. Our system will generate a notice for each check in excess of three for the statement cycle. In other words, if a customer has five checks clear their account in one statement cycle, our system will generate two notices. In addition, the year-to-date counter will show 2 times exceeded. Would it not suffice to have one notice per statement and therefore, the system would show 1 time exceeded year-to-date? Our software provider is unwilling to modify their system unless we can provide some sort of proof that would back this method up. I would appreciate any guidance you can provide. Thanks!

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General Discussion
#17087 - 05/07/02 08:22 PM Re: Reg D Question

Reg D 12 CFR 204.2(d)(2) speaks to violations on a per month basis rather than a per transaction basis. The bank I work for will assess 2 "strikes" in a single month only if the customer has 12 or more preauthorized transfers in a single statement cycle. The way your bank appears to be doing it is pretty customer unfriendly in far more stringent than what Reg D requires. The intent of tracking violations on a per month basis rather than a per item basis is to allow the institution to work with customers who inadvertently violate the regulation.

The views expressed here should not be construed as legal advice...

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