Reg D Limited or Unlimited Transaction

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Question:

In regards to Reg D, if a person initiates an Internet transfer from a savings account to make a loan payment, is that a limited or unlimited transaction?

Answer:

From the definition of Savings Deposit in Regulation D, section 204.2(d)(2): "Such an account is not a transaction account by virtue of an arrangement that permits transfers for the purpose of repaying loans and associated expenses at the same depository institution (as originator or servicer)...."

If the loan payment is made to the same institution as the one holding the savings account, the transaction is not counted against the six-per-month transfer/withdrawal limit in the regulation. If the payment is to another party, however, it's counted.

First published on BankersOnline.com 9/24/12