WASHINGTON—The Federal Reserve has published an interim final rule to lower reserve ratios on transaction accounts maintained at depository institutions to 0%, providing flexibility to credit unions under the Regulation D limit.
Both credit union trade groups had been advocating for the lower ratios. Credit unions they can submit comments on the rule to the Fed until May 26.
Although Regulation D’s transfer limit has not been eliminated, credit unions may elect to reclassify savings accounts as transaction accounts without incurring new reserve requirements, noted NAFCU, clarifying the election must be consistent with how the credit union reports the accounts on its call reports.
“Credit unions can continue to use their discretion on whether to classify each account as transaction or non-transaction accounts, but should be aware that the account designation could impact funds availability requirements under Regulation CC,” said NAFCU. “This change does not amend the Regulation D transfer limit of six transfers or withdrawals per month.”
As CUToday.info reported earlier, both CUNA and NAFCU had urged the Fed to make changes in Reg D prior to the Fed doing so.