Compliance Q&A: Reg D Amendments – Temporary or Permanent?

Question: Regarding the recent Regulation D amendments, are these temporary or permanent changes?

Answer: As the interim final rule is currently written, these changes do appear to be permanent, and not tied directly to the current COVID-19 pandemic:

“In January 2019, the FOMC announced its intention to implement monetary policy in an ample reserves regime. Reserve requirements do not play a role in this operating framework. In light of the shift to an ample reserves regime, the Board announced that, effective March 26, 2020, reserve requirement ratios were reduced to zero percent. This action eliminated reserve requirements for thousands of depository institutions and helped to support lending to households and businesses. As a result of the elimination of reserve requirements on all transaction accounts, the retention of a regulatory distinction in Regulation D between reservable “transaction accounts” and non-reservable “savings deposits” is no longer necessary. In addition, financial disruptions arising in connection with the novel coronavirus situation have caused many depositors to have a more urgent need for access to their funds by remote means, particularly in light of the closure of many depository institution branches and other in-person facilities.”
p. 5:

Because this is an interim final rule, however, there is an allowance for comments–so it’s possible that there can be changes to it after those are considered and a finalized rule is issued:
“III. Request for Comment The Board seeks comment on all aspects of this interim final rule. In particular, the Board seeks comment on the considerations that may lead depository institutions to choose, or to be required, to retain a numeric limit on the number of convenient transfers that may be made each month from a savings deposit.”

p. 11:


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