WASHINGTON—The Federal Reserve is being asked by NAFCU to clarify whether the recent interim final rule that eliminates the six-per-month transaction limit between savings and checking accounts under Regulation D is permanent.
"While the current pandemic serves to highlight the transfer limit’s lack of purpose and detrimental effect on consumers, the fundamental conditions underlying the board’s amendments should be regarded as permanent," wrote NAFCU President and CEO Dan Berger in a letter to the agency. "The board should make this understanding explicit in a final rule by clarifying that the elimination of the Regulation D transfer limit is not a temporary measure."
NAFCU noted it has long advocated for the transfer limit to be eliminated. Prior to the interim final rule, the Fed's announcement in March to eliminate reserve requirements provided credit unions with some relief from the Regulation D restrictions, but did not eliminate the limit.
Failure Could Cause ‘Hesitation’
In his letter, Berger further noted that "while the preamble to the interim final rule strongly suggests that the Board did not intend for the Regulation D amendments to be time-limited, repeated references to the exigencies of the pandemic might suggest the changes are somehow temporal in nature."
"Doing so will encourage credit unions to modify their operations with confidence and in turn provide immediate aid to members," Berger added. "Failure to clarify the permanence of the amendments might cause hesitation within the industry as there are many legal and operational questions associated with the process of reverting back to enforcement of the transfer limit."