Regulation D (REG D) is a Federal law that limits the number of transfers and withdrawals that you can make from an interest bearing account (Regular Savings, Money Market, or Club Account) to a Checking Account or to a third party. According to REG D, you may not make more than six pre-authorized, automated, or telephone transfers/withdrawals from these accounts each month. The regulation was established to prevent consumers from using interest bearing accounts as transaction or checking accounts. Fees are typically applied to such transfers and withdrawals in order to discourage consumers from using interest bearing accounts as transaction accounts. There may be fees associated with transfers from an interest bearing account to your Checking Account or to a third party. Please refer to the Credit Union fee schedule for applicable fees.
REG D restricts certain types of transactions that can be performed on savings, money markets and other non-checking accounts. Specifically, during any calendar month you may not exceed six (6) transactions on an account that include:
- Transfers made using Online Banking (One time and Recurring)
- Transfers made using Telephone Banking
- Overdraft transfers (made automatically to cover insufficient funds in checking)
- Transfers requested by phone and processed by Connect CU staff
- Transfers to 3rd parties
- ACH Debits
- Debit Card Point of Sale (POS) transfers
Transactions that do not fall under the limit
- ATM transactions
- Scheduled Automatic Transfers made between Connect CU accounts
- Transactions done in person at a branch including shared service centers
- Transactions sent in by mail or night drop with an original signature
- Connect CU Bill Pay (which uses funds from a checking account)
Beginning on 12/1/13, any transactions attempted that exceed the limit of six (6) will be denied or returned as non-sufficient funds. Please note that REG D does not limit the number of withdrawals from a checking account. If you do not have a checking account established with the Credit Union, please contact us immediately to discuss your options.
Federal Reserve Regulation D (REG D) FAQ's
- If an account used for Overdraft Protection has reached its Regulation D limit, will overdraft requests be honored?
No, if the Overdraft Protection account is a Savings Account or Money Market Account (MMA). No notice will be sent. An NSF Fee will be charged for every overdraft attempted beyond the monthly limit of 6.
However, if the Overdraft Protection account is a Line-of-Credit/Credit Card loan (which is not affected by Regulation D) the overdraft will complete normally.
- If a member has a merchant automatically withdraw payments from my Savings Account via ACH; do these count against the monthly limit?
Yes. These are payments to 3rd parties and fall under REG D. Any withdrawals attempted beyond the monthly limit will not be honored. No notice will be sent. An NSF Fee will be charged for every transaction attempted beyond the monthly limit of 6. To avoid this situation we suggest members make automatic payments using a checking account. Members will need to contact the merchant/3rd party to make the account number change. Alternatively, members may use Connect CU bill pay and their checking account to automatically send payments to the merchant, rather than authorizing the merchant to automatically withdraw payments from their Savings.
- If a member uses a debit card to withdraw cash at an ATM machine; do these count against the monthly limit?
No. ATM withdrawals are not payments to a 3rd party and do not fall under REG D.
If a member uses a debit card as a Point Of Sale or has a merchant setup for recurring billing to the card from their Savings account; do these count against the monthly limit?
Yes. These are payments to 3rd parties and fall under REG D. Any authorization requests attempted beyond the monthly limit will be denied. No notice will be sent. Please refer to the Credit Union Fee Schedule for applicable fees.
Note: Merchants that have a recurring billing that do not reauthorize the transaction may inadvertently cause the limit to be exceeded. The Credit Union may cancel the card, restrict the account or close the account for repeat violations.