If I understand correctly, Reg D permits 6 transactions on a monthly basis from a savings/MMA account. If the account holder wishes to have a MMA linked to either a debit or ATM card (I know, a bad idea), am I correct in stating that:

1. Transactions conducted by the account holder using the debit card to make payments would count towards to the monthly limit?

2. Withdrawing cash from an ATM machine would not count toward to monthly limit?

Separate question. A number of peers informed me that if a customer exceeds the limit, they send a warning letter. If the limit is exceeded a second time, a second warning letter is sent. It isn't until the third time (18 transactions) that they will either close or convert the account. I couldn't find anything in the regulation to support this practice? I always thought it was 6 transactions per month, period?

Separate question.

I don't think there is any hard and fast rule. The intent is that the bank is monitoring these excess debits and taking appropriate action when they become a blatant disregard of the regulation.

I believe among most colleagues that there is a 'rule of thumb' that if they exceed the 6 trans per cycle more than 3 times in a rolling 12-month period, the bank should then take action.

We do it by a 'soft' first time letter, a bit 'harder' second time letter and then an action against the account the third time (closure, removal of ability to perform transfers, etc.).

These FRB opinions can be rather surprising.

http://www.philadelphiafed.org/bank-reso...egulation_d.pdf

I would disgree if you been in a FED exam. This is where they try to catch a bank on the account closure and timing of that closure with REG D- 6 transactions.

On your first two questions, you have the right information. POS debits count, ATM transactions don't (insofar as the Regulation is concerned).