Fed suspends 6-transaction-per-month limit on savings accounts

Dive Brief:

The Federal Reserve is temporarily suspending a six-transaction-per-month limit on transfers and withdrawals from the savings accounts of bank and credit union customers, according to an interim final rule published Tuesday.
The threshold was rendered moot when the Fed reduced all reserve requirement ratios to zero last month to curb the effects of the coronavirus crisis, the regulator said in a press release.
It is unknown for how long the Fed will allow unlimited transactions. The Independent Community Bankers of America (ICBA) asked the central bank in a letter last month to suspend the transaction limit for at least a year, asserting that consumers need better access to their bank accounts to cover bills and household expenses. "Restrictions on traveling outside the home, limited bank hours, and reduction in public transportation operations will force customers to facilitate more transactions online or over the phone and may cause them to meet and surpass their limit more quickly," ICBA CEO Rebeca Romero Rainey wrote.

Dive Insight:

With the suspension of the limits imposed under Regulation D, banks can "allow their customers to make an unlimited number of convenient transfers and withdrawals from their savings deposits at a time when financial events associated with the coronavirus pandemic have made such access more urgent," the Fed said in its interim final rule.

The ICBA isn't the only trade group advocating for the transaction limit's suspension. The National Association of Federally-Insured Credit Unions urged the Fed to make the temporary revision to Regulation D permanent.

"As the coronavirus pandemic exacerbates longstanding concerns with the transaction limit, it is important consumers have the flexibility they need to freely transfer essential funds between their accounts to cover everyday expenses and manage their personal finances," Dan Berger, the group's president and CEO, said in a statement emailed to Banking Dive.

Jim Nussle, president and CEO of the Credit Union National Association, said his group has sought an easing of the transaction limit "for years."

"We've long believed the threshold was arbitrary and unnecessary," Nussle said, according to American Banker.

The central bank is accepting public comments on the rule change until June 29, but the interim final rule is effective as of April 24.