ACH Debits - Three or Six Limit?

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Question:

I wanted to get clarification on whether ACH debits were considered in the three or six limit, so I talked with the Director of Compliance for the Federal Reserve and she told me that ACH counts in the three limit along with checks, drafts, debit cards and similar orders to pay because of the convenience. Is that correct?

Answer:

That doesn't agree with official published opinions from the Federal Reserve. ACH transactions are classified as pre-authorized transfers, which are restricted by the six per month limit. I do agree that certain ACH transactions, check conversion entries (ARC, BOC, POP and RCK), should be limited to three per month because they are direct replacements for check transactions. However, the Fed hasn't issued any formal ruling to that effect of which I am aware. If the Fed's proposed revision to Reg D is finalized as proposed the question will be moot because the three per month limit would be eliminated.

[Editors Note: As of 7/2/09, the separate limit of three per month for checks, POS debit card transactions, etc., has been eliminated, and those transactions are now only subject to the 6/month limit that applies to other restricted transfers and withdrawals.]

First published on BankersOnline.com 6/30/08