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New Reg D Regulation Changes for COVID-19

For the new Reg D regulation changes for COVID-19 in which withdrawal limits are waived, does the bank have to provide a notice of change within 30 days of the change or not? Is the notification requirement waived if the change is temporary and/or the change is permanent?

by Brian Crow
The change is to the customer's benefit so Regulation DD subsequent disclosures are not required.


by John Burnett
First, the withdrawal limits were not waived. They have been removed, and not because of COVID-19. The Fed removed the limits because it no longer plans to use reserve balances as a monetary policy tool. The COVID-19 pandemic and the Fed's perception that depositors may be hindered in their access to savings funds by the withdrawal limits was the reason the Fed used an "interim final rule," which could be made effective at once, with comments taken afterward, rather than going through the protracted sequence of proposed rule, comments and final rule.

You don't need to provide advance notice if your bank decides to suspend the limits you may have on transfers and withdrawals (or cancel them altogether) because the effect is beneficial to the consumer. You may want to provide notice anyhow so that depositors realize they don't need to adhere to the limits.

First published on 05/24/2020

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