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#1801769 - 04/05/13 01:22 PM MMAs and sweep accounts
DeeQ Offline
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DeeQ
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I have seen tons of banks offer this MMA sweep account feature for the business customers. Doesn't Reg D restrict the sweeping back into the checking account? How does the bank get aroun that rule?
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#1801777 - 04/05/13 01:26 PM Re: MMAs and sweep accounts DeeQ
John Burnett Offline
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John Burnett
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Yes, the sweeps back to the DDA account are limited under the "six per month" rule in section 204.2(d)(2). The sweep arrangement may include a provision stating that funds are swept FROM the MMDA only once a week. Or that no more than 6 sweeps from the MMDA will be completed in a given month.
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#1801804 - 04/05/13 01:56 PM Re: MMAs and sweep accounts DeeQ
rlcarey Online
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Or, the MMA account is really classified as an interest bearing checking account by the institution.......
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#1801841 - 04/05/13 02:35 PM Re: MMAs and sweep accounts DeeQ
DeeQ Offline
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SO it would be OK to name it a MMA if it was reserved for as a checking account? (That was my original thought, but reading D made me think not.)

And thank you both. smile
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#1801869 - 04/05/13 03:05 PM Re: MMAs and sweep accounts DeeQ
rlcarey Online
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rlcarey
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Galveston, TX
That can call the product a SDSA (super duper savings account) if they wanted to. An account name is only an account name.
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#1801888 - 04/05/13 03:22 PM Re: MMAs and sweep accounts DeeQ
DeeQ Offline
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DeeQ
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Great, thanks! smile
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#1802665 - 04/09/13 02:11 PM Re: MMAs and sweep accounts DeeQ
Elwood P. Dowd Offline
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Elwood P. Dowd
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Next to Harvey
The sweep mechanism was contrived to get around the customer's ineligibility for a NOW account. Now that bank's can offer interest bearing DDA's to anyone, it no longer serves a purpose. If you want to pay interest to corporate customers you may design a product for that purpose...
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