On April 23, 2020, in an Interim Final Rule, the Federal Reserve dropped the convenient transfer limitations from savings deposit accounts of six per month, and now allows unlimited transfers from “savings deposits.”

The effective date of the Rule will be 60 days from the date of publication in the Federal Register, but the applicability date was April 23, 2020. In other words, you can rely on the Rule now.

The Rule contains anticipated frequently answered questions regarding the removal of the limitations, which are included below.

Q.1. Does the interim final rule require depository institutions to suspend enforcement of the six convenient transfer limit on accounts classified as “savings deposits”?
A.1. No. The interim final rule permits depository institutions to suspend enforcement of the six transfer limit, but it does not require depository institutions to do so.

Q.2. May depository institutions continue to report accounts as “savings deposits” on their FR 2900 deposit reports even after they suspend enforcement of the six transfer limit on those accounts?
A.2. Yes. Depository institutions may continue to report these accounts as “savings deposits” on their FR 2900 reports after they suspend enforcement of the six transfer limit on those accounts.

Q.3. If a depository institution suspends enforcement of the six transfer limit on a “savings deposit,” may the depository institution report the account as a “transaction account” rather than as a “savings deposit”?
A.3. Yes. If a depository institution suspends enforcement of the six transfer limit on a “savings deposit,” the depository institution may report that account as a “transaction account” on its FR 2900 reports. A depository institution may instead, if it chooses, continue to report the account as a “savings deposit.”

Q.4. Does the interim final rule have any impact on the “reservation of right” provisions set forth in section 204.2(d)(1) of Regulation D?
A.4. No. The interim final rule does not have any impact on section 204.2(d)(1) of Regulation D. The “reservation of right” continues to be a part of the definition of “savings deposit” under the interim final rule.

Q.5. If a depository institution suspends enforcement of the six transfer limit on a “savings deposit,” is the depository institution required to change the way that interest on the account is calculated or reported?
A.5. No. The interim final rule does not require a depository institution to change the way it calculates or reports interest on an account where the depository institution has suspended enforcement of the six transfer limit.

Q.6. Suppose a depository institution has account agreements with its “savings deposit” customers that require the depository institution to enforce the six transfer limit. Suppose further that the depository institution would like to amend those account agreements so that the depository institution no longer has a contractual obligation to enforce the six transfer limit on its “savings deposit” accounts. Does the interim final rule require the depository institution to amend those agreements in any particular way?
A.6. No. The interim final rule does not specify the manner in which depository institutions that choose to amend their account agreements may do so.

Q.7. If a depository institution chooses to suspend enforcement of the six transfer limit on a “savings deposit,” must the depository institution change the name of the account or product if the account or product name has the words “savings” or “savings deposit” in it?
A.7. No. The interim final rule does not require depository institutions to change the name of any accounts or products that have the words “savings” or “savings deposit” in the name of the account or product.

There is no Q.8. in the Rule.

Q.9. May depository institutions suspend enforcement of the six transfer limit on a temporary basis, such as for six months?
A.9. Yes.

Q.10. Suppose that a depository institution currently has policies or provisions in their savings deposit account agreements pursuant to which the depository institution charges fees to savings deposit customers for transfers and withdrawals that exceed the six transfer limit. May a depository institution that suspends enforcement of the six transfer limit continue to charge these fees when savings deposit customers make seven or more convenient transfers and withdrawals in a month?
A.10. Regulation D does not require or prohibit depository institutions from charging their customers fees for transfers and withdrawals in violation of the six transfer limit. Accordingly, the deletion of the six transfer limit does not have a direct impact on the policies or account agreements of depository institutions that charge such fees to their customers.

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