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Reg D Money Market Accounts-Restrictions Lifted?

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Question: 
Is Reg D doing away with restrictions on Money Market accounts? (The 6 transaction limit is being lifted)
Answer: 

No, and I wonder where that rumor got started. What is being lifted are the almost eight decades old legal prohibitions against paying interest on demand deposits (which, of course, includes business checking accounts) as of July 21, 2011.

There were a number of legislative attempts to loosen the transaction restrictions on savings and money market deposit accounts in Regulation D over the last several years, each connected to a bill that would have lifted the demand deposit interest ban with a delayed effective date. None of those attempts was successful, and I imagine that the idea has now been put to rest.

What we may see as a result of the anticipated availability of interest-bearing demand deposit accounts is a lowered demand for business savings, MMDA and perhaps even sweep accounts. But that's entirely speculation.

First published on BankersOnline.com 6/13/11

First published on 06/13/2011

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