‘I’ll take potpourri for $200, Alex’

I love watching Jeopardy — even though it is a constant reminder that my wealth of knowledge is painfully small. 

If I am lucky, I may get 5 questions out of 61 right. However, when the potpourri category comes up, I can run the board. I may not be able to name the presidents or have any clue a war even happened — let alone when it happened or why — but boy do I know useless, random trivia no one else cares about.

Recently, thanks to COVID-19, new random compliance topics have emerged. Lenders who never dreamed of doing SBA loans had to become experts overnight. Changes to regulations seemed to just pop up, even if the change was not related to COVID-19.

One of those changes was to Regulation D. On April 24, 2020, the Board of Governors of the Federal Reserve System issued an interim final rule amending Regulation D to delete the limits on certain types of transfers and withdrawals that could be made each month from savings deposits. They also amended the definition of “transaction account” so savings accounts became part of the definition.

What does that mean for your financial institution? First, it means you will no longer be required to enforce the withdrawal limitations on savings and money market accounts. However, you are still allowed to limit the number of transactions and charge a fee if the consumer exceeds that limit. You just should not reference Regulation D as the reason for the limitation on transactions.

Second, you can continue to report these accounts as savings deposits, or you may start reporting them as transaction accounts, on the FR 2900 reports. Your choice.

As usual, this simplified one regulation and clouded another. Since Regulation CC refers to Regulation D for the definition of “account,” there was confusion as to whether this would result in savings accounts becoming subject to your funds availability policy. The Federal Reserve cleared this up on May 13, 2020, when it added FAQ 13 to its Savings Deposits Frequently Asked Questions, stating that the recent amendments to Regulation D did not result in savings deposits or accounts now being covered by Regulation CC.  

Who knows … maybe next time Jeopardy comes on, Regulation D will pop up in the potpourri category? Then you can dazzle your friends and family with your vast knowledge of the topic.

Wipfli has a potpourri of knowledge on all things compliance. Let us know if you have any questions or need help. Give us the opportunity to dazzle you with our vast knowledge.