Tw questions. In reg D it stats that if a customer exceeds the MMA transactions in 4 consecutive statement cycles the account must be closed. There is more, but keeping this simple. We were told it's rolloing period of 12 months, not consecutive months. Which is it or can we determine the frequency? If after the 4th statement we allow the customer 30 more days to arrange to redirect their direct deposits and automatic debits to another account are we violating the regulation by allowing that account to remain open?

In reg D it stats that if a customer exceeds the MMA transactions in 4 consecutive statement cycles the account must be closed.

There is no such statement in the regulation. The Fed Staff at one time said that inadvertently exceeding the limitation more than three times in any rolling 12-month period would be considered excessive. They also said that any intentional violations must be acted on immediately. Most banks go with three strikes and you are out unless these is a blatant disregard for the rules.

You find other statements in the Staff Opinions such as :

" For customers that continue to exceed the transactions limit after being contacted, the institution is required to close the account or take away the transactions capability."

"For this reason, the staff has applied a general rule that an institution may continue to consider an account an MMDA even if there are excess transfers so long as those excess transfers are not the result of an attempt to evade the transfer limits, and if the excess transfers occur in not more than three months during any 12-month period. This working rule is not absolute, however, and the facts and circumstances must be considered in each case."