What are the penalties to the bank if after sending the three letters for Reg D violations the account isn't changed from a money market account?

I have heard of circumstances where regulators have made the bank go back and recalculate reserve requirements (I believe it was for two years). It cost the bank big bucks.

thanks

Did the regulator(s) in the case(s) you mentioned require recalculation of reserves for all MMDAs or just the offending parties?

It was my understanding that all MMAs were reclassified for recalculation purposes. As I recall, this was not a large bank, so it had a big impact on the reserve calculations.