Our data service provider can offer a product called a “Transactional Savings Account” for Regulation D customers who exceed the transaction limits. This product allows the savings account to be closed and using the same number the account can be transferred to this new product called a Transactional Savings Account. They have several Credit Unions that use it. My question is, is this type of account permissible with OCC federally regulated banks? Thanks!

I've never heard of a "Transactional Savings Account" (at least not defined in Reg D) but it probably doesn't matter as much what you call it as how you report it. If you report it on your Call Report/UPBR as a savings account, it is subject to the restrictions.

I agree with Adam. I'm assuming it would be reported with the checking accounts on your call report, correct?

Also, assuming that these are interest-bearing accounts you want to be sure you do not run afoul of NOW account restrictions that may apply.

Correct, if this was allowed and we went this direction, it would be reported as checking. What the product is designed to do is keep the same account number and our data service provider does not allow that except within the same minors (savings to savings---checking to checking)

Sounds like a system limitation to me and has nothing to do with your product. If your system separates your checking and savings account products by account number range, then there is not much you can do.

Reporting it as a checking account should clear up any concerns under Reg D.

The only other thing I would be concerned about is UDAAP as you would be calling a checking account a transaction "savings" account (assuming that is the proposed title of the account) and depending on the structure of the account, it could be considered misleading in the eyes of an examiner. I haven't really thought through the three prong tests on this scenario, but I would at least consider it before proceeding.