Trades Seek Reg D Delay
CUNA and NAFCU have asked the Federal Reserve Board to push back the implementation of proposed changes to Regulation D to later next year.
Dillon Shea, NAFCU regulatory affairs counsel, said his trade group supports proposed changes to Regulation D but would like implementation pushed back to the third quarter of next year.
In a letter to Federal Reserve Board Secretary Jennifer J. Johnson, Shea said proposed changes to Regulation D, regarding reserve requirements for depository institutions, would simplify the reserve requirement process.
It its letter to Johnson, signed by Kristina A. Del Vecchio, counsel for special projects, CUNA also ask for a nine-month delay so that credit unions can prepare for the changes.
Credit unions, particularly smaller ones, are already awash in regulatory compliance issues, CUNA said.
“Credit unions and other depository institutions are currently working hard to implement many of the new regulations imposed as a result of the Dodd-Frank Act and other regulatory initiatives,” Del Vecchio wrote. “CUNA requests that the board give depository institutions ample time, at least nine months, to implement the proposed changes and that it stagger the effective dates for each proposed amendment.”
Shea in his letter said, “NAFCU supports a slightly longer implementation period than that proposed by the board. The proposed rule states that the changes regarding the contractual clearing balance program and the use of as-of adjustments may occur as early as the first quarter of 2012. A slightly longer implementation period would be helpful in this regard,” Shea said.
Specifically, NAFCU requested that the Fed consider implementing changes no earlier than the beginning of the third quarter.
CUNA and NAFCU also requested that the Fed reconsider the limitation on convenience transfers. Under current law, consumers are limited to no more than six convenience transfers or withdrawals from their savings account per month.
The Federal Reserve has provided some flexibility over the past several years by exempting ATM and some other transactions from the rule, Shea noted.
“Nonetheless, depositors should be permitted to make internal transfers between accounts at the same institution, without limitation,” he said. “Technological advances have made it easier for the consumer to transfer money between accounts. Moreover, these same advances allow depository institutions to execute those transfers at a lower cost than ever before.”
CUNA suggested the Fed either raise the limit or abolish it entirely.
“The increased use of electronic channels has enabled financial institutions to deliver financial services to consumers conveniently and at lower costs. For this reason, the six transfer limitation unreasonably restricts consumers from being able to easily access their own funds for their own use,” Del Vecchio said.
CUNA urged the board to consider raising or even removing the six-transfer limitation on internal transfer payments and deposits made by consumers among their own accounts within the same financial institution. Transfers or payments to third parties would still be included within the limited transaction rule, CUNA noted.
Shea called the current law burdensome and confusing for depositors who wish to have unfettered access to their funds. “It is unreasonable to expect consumers to understand and remember the arcane limits on the number and type of transfers that are allowed out of their savings account,” he added.
NAFCU, agreeing with CUNA, said limits on transfers to third parties could be kept in place.