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Berger to Fed: Clarify Reg D limit removal is permanent
NAFCU President and CEO Dan Berger Monday wrote to the Federal Reserve Board of Governors asking for clarification on whether the recent interim final rule that eliminates the six-per-month transaction limit between savings and checking accounts under Regulation D is permanent.
"While the current pandemic serves to highlight the transfer limit’s lack of purpose and detrimental effect on consumers, the fundamental conditions underlying the Board’s amendments should be regarded as permanent," Berger wrote. "The Board should make this understanding explicit in a final rule by clarifying that the elimination of the Regulation D transfer limit is not a temporary measure."
NAFCU has long advocated for the transfer limit to be eliminated and doubled down on its advocacy amid the coronavirus pandemic. Prior to the interim final rule, the Fed's announcement in March to eliminate reserve requirements provided credit unions with some relief from the Regulation D restrictions, but did not eliminate the limit.
In his letter to the Fed, Berger noted that "[w]hile the preamble to the interim final rule strongly suggests that the Board did not intend for the Regulation D amendments to be time-limited, repeated references to the exigencies of the pandemic might suggest the changes are somehow temporal in nature."
"Doing so will encourage credit unions to modify their operations with confidence and in turn provide immediate aid to members," Berger added. "Failure to clarify the permanence of the amendments might cause hesitation within the industry as there are many legal and operational questions associated with the process of reverting back to enforcement of the transfer limit."
In addition, Berger highlighted concerns about the rule's implications on Regulation CC and sought additional clarification. NAFCU discussed these issues with the CFPB Monday.
NAFCU will continue working to obtain relief for credit unions under outdated regulations and amid the coronavirus pandemic.