Good Morning. We have a customer who owns a small business that is incorporated. He has a rather large build up in funds in his operating account and wants to know if he can move these funds to a interest-bearing account and then have the bank move the funds to the operating account when checks are presented against it. There is some discussion as to whether or not he can have a "zero balance" account with sweeps from the savings account or repurchase agreement without being in violation of Reg D. Any suggestions? Thank you.

We have ZBA accounts set up for various business customers. These are swept nightly into a repurchase agreement and will sweep back as needed to cover checks written. The repurchase agreements are secured by bank owned securities. We have never had any issues with Reg D violations from examiners.

Thank You.