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#205 - 12/12/00 05:01 AM Reg D & Reg Z

I would like to know if the number of transfers is limited to six (6) (with respect to accounts regulated by Reg D) for transfer completed through internet online banking?

Also, another question: Are underwriting and processing fees considered finance charges for real estate mortgage transactions?

Thank you.

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General Discussion
#206 - 12/11/00 06:27 PM Re: Reg D & Reg Z
Andy_Z Offline
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Joined: Oct 2000
Posts: 27,485
On the Net
As to Reg. D, generally yes. This would apply to transfers between accounts (other than to pay debts to the bank) and bill payments. It shouldn't count towards the customers using a bill pay feature to send themselves a check as that is not a third party item or otherwise restricted.

One basic test is whether or not the transaction is convenient. If yes, it counts. (Also, look at the Reg. D and Permissible Transactions thread in this forum.)

As to "Z", look at 226.4 and determine the exact nature of your fee to the definition.

Andy Zavoina
Opinions stated are not necessarily that of my employer.

[This message has been edited by Andy Z (edited 12-11-2000).]

My opinions are not necessarily my employers.
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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#207 - 12/11/00 06:40 PM Re: Reg D & Reg Z
Mary Beth Guard Offline
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Mary Beth Guard
Joined: Oct 2000
Posts: 797
Oklahoma City, OK
Andy's right. I've also heard it referred to as the "seat of the pants" rule. If you can make the transfer without getting up off the seat of your pants, it probably counts toward the limit of 6. (Examples: telephone transfers, automatic transfers, online banking transfers.) If, on the other hand, you exert some energy to get up and go to the ATM, or go in person, or arrange for a messenger, it will not count.

I think it helps to think about what they're trying to accomplish through this rather crazy-sounding scheme. The intent of Congress and the FRB is for financial institutions to be able to attract deposits on which they will not have to pay interest. In order to do so, they have placed various restrictions on interest-bearing accounts, to make them less attractive. NOW accounts have strict eligibility limits. CDs have early withdrawal penalties. Savings deposits and MMDAs have limits on transfers/withdrawals. The delineation of what counts as a covered transfer or withdrawal represents a kind of a balance. They didn't want to bring all transfers/withdrawals under the umbrella because that would create accounts that would be too inflexible to be attractive to most customers. On the other hand, if they allowed unlimited transfers/withdrawals, money would flow out of noninterest-bearing accounts immediately and everyone would want only accounts which paid interest.

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