Conference 7.286::dcu

    Re .0
    
    I think people are confusing a "SAVING" account with an RSVP account
    (soon to be called Money Market). As far as I can see there is no
    purpose whatsoever in keeping anything other than $5 in your "Savings"
    account. From what I read I don't believe the RSVP/Money market account
    is a "Savings" account.
    
    The ony annoying thing about this is that from reading the literature
    sent to me it seems like if you overdraw your checking account an
    automatic transfer will be done from your savings to cover it. BUT no
    such convenience exists for the RSVP/Money market account. It's my
    understanding that the Savings account pays less interest than the
    RSVP.
    
    Dave

    I just added this conference based on the "letter" alot of people
    in here are talking about.
    
    I was very curious about this "Regulation D".
    
    What I have learned is it is 6 transfers on each savings account/month.
    
    I did not ask if the .10 account is considered a savings account.
    
    If you transfer to pay off a DCU Visa - or another loan payment
    using Easy Touch, then it is an exemption.
    
    Does anyone have the description of the regulation that is responsible
    for this change?
    
    What are the exemptions from this transfer rule? What if I want to 
    make a 7th transfer - will it not be allowed?
    
    Mike
    

�    Now if you have a branch or ATM, you can get at it.  Kinda eliminates
�    those not in the GMA now doesn't it?
    
    No since you can access your account through non DCU ATMs, albeit with
    a transaction charge.

Reg D is FedGov, so not much DCU can do about it other than comply.
Wasn't Reg D put in place along with other regulations as an attempt 
to make it difficult for sleazy criminal types to launder money?

./chris

    I just called the 1-800-shawmut line about the service they offer
    - telephone transfer between accounts.
    
    I called to see if they had a limit - or thought there would be a limit
    in the near term.
    
    the answer
    
    No limit, though it costs 25 cents/transfer
    
    this policy will not change.
    
    So how come DCU has a limit?
    
    Does anyone have any idea what Regulation D is?
    
    mike

RE:          <<< Note 696.6 by CADSE::SHANNON "look behind you" >>>

     The same goes for Ent Federal Credit Union, here in Colorado.
We can transfer to our heart's desire via the "audio teller".  However,
there is a limit on how many automatic transfers will be performed to 
cover overdrafts in the checking account.

                                      Greg

I almost never read this conf, but was driven to do so
after getting the mail on Reg D.  From other replies,
it looks like it is questionable whether other banks
or credit unions are implementing this, or have even
heard of it.  Can someone from DCU please confirm/deny
this and show us where we can get copies of this Reg?
I'd also like to know what agency or person to contact
with complaints about regulations like this.  Is this
one of those "write your congressman" deals?

This limit may seem like a minor annoyance, but it feels
to me like just one more part of my life the government
is trying to control.  I can kind of understand the
prevention of money laundering idea (if indeed that has
anything to do with this reg), but isn't this sort of like
locking up the citizens because there's crime in the streets?
There must be a better way.

- Tom

       I have talked to a local credit union (Colorado Springs). 
    They indicated there is no limit on the number of electronic
    transfers from savings. They also knew nothing of regulation D.
    I would like to know what agency controls this regulation.
    
    Wes

    Maybe by putting another note in here someone who knows something
    about this will answer the request.
    
    What is regulation D?
    
    What is it's true written form, or where can one get a copy of it.
    
    Why is do other banks/CU's not have to comply with it?
    
    m

    
    I have a copy of Reg D in front of me.  Reg D is the "Reserve
    Requirements of Depository Institutions" (Code of Federal Regulations, 
    title 12, chapter 11, part 204).
    
    Section 204.1  -- Authority, Purpose, and Scope
    
    (a) ...
    
    (b) Purpose.  This part relates to reserves that depository institutions
    are required to maintain for the purpose of facilitating the
    implementation of monetary policy by the Federal Reserve System.
    
    ... (followed by 17 pages of legalese).
    
    
    
    I think I have an idea of what may be going on here.  I will either
    confirm or dispel it at the Board meeting this Tuesday.  Please sit
    tight.
    

Re .11

> I think I have an idea of what may be going on here.  I will either
> confirm or dispel it at the Board meeting this Tuesday.  Please sit
> tight.

Anyone know if DCU has decided to stick with their restrictive
interpretation of Fed Reg. D. despite the fact that other CU's/Banks
are not planning to do this?  If so, can someone please tell me why?

thanks,
- Tom

  Because they are the DCU and they are trying to play BIG BANK!

    
    	[from September DCU mailing]
    
    	"Regulation D:  This federal regulation limits you to a maximum of
    	 six (6) transfers each month from your savings accounts via
    	 telephone, FAX or our Easy Touch Audio Response System.  DCU will
    	 allow three (3) of the six (6) to be automatic overdraft transfers
    	 from your primary savings to your checking account at $3.00 per
    	 transaction.  This fee is waived for relationship members."
    
    	------------------------------------------------------------------
    
    
       I have received the following summary from DCU management with
    regards to Reg D.  If you know of other banks and/or credit unions that
    do not follow the same logic, please post them along with what they do.
    
       I still have some questions on exactly what is classified a 
    transaction account by DCU and its competitors.  That seems to be the
    crux of the issue.  I understand Reg D to be the regulation that
    determines what reserves must be kept at the Federal Reserve Bank (FSB).
    I believe "transaction accounts" require certain reserves be kept on
    deposit at the FSB (at no interest).  I will ask for a complete
    presentation to the Board at our October meeting to get this
    straightened out in everybodys mind.
    
    


			Summary of Regulation D Requirements
				   12 CFR 204



		Is account a checking
		(transaction) account?   ------------ Yes --------------+
			|						|
			No						|
			|						|
		Was transaction made by					|
		mail, messenger, ATM or					|
		in person?   ------------------------ Yes --------------|
			|						|
			No						|
			|						|
		Was transaction made by					|
		ACH, phone, FAX or					|
		audio response (ET)?					|
			|						|
			Yes						|
			|						|
		Was transaction a loan					|
		payment, check/wire to					|
		prime or joint owner?   ------------- Yes --------------|
			|						|
			No						|
			|						|
		Was transaction a					|
		check*, POS* or a wire		      Allowed 3		|
		to a third party?   ------- Yes ----  per month		|
			|						|
			No						|
			|						|
		Allowed 6 per month			    Allowed unlimited
							    monthly transactions


	* Not applicable at DCU as these transaction are posted to checking
	  (transaction) accounts only and are, therefore, unlimited.


	Questions relating to this regulation should be addressed to your
	local Federal Reserve Bank.  For your convenience, the address of the
	Massachusetts region Federal Reserve Bank is:

			Federal Reserve Bank of Boston
			P.O. Box 2076
			Boston, MA  02106

Re: .16

>I will ask for a complete presentation to the Board at
>our October meeting to get this straightened out in
>everybodys mind.

Any word from the board about Reg. D?

- Tom

    
    RE: .17
    
    Yes, sorry for not getting back to you sooner.  This is the plain English 
    description of what is going on.  
    
    Reg D is the regulation that deals cash reserves that financial
    institutions keep on hand at the federal reserve.  Certain types of 
    accounts (such as checking, and others defined in Reg D) require
    that money be keep on reserve at the Fed.  It appears that since DCU
    was allowing transfers (on certain accounts) over the limit defined 
    in Reg D, they should have been keeping more reserves at the Fed.  So
    they are now in compliance with Reg D.
    
    Now for the other part of the equation, these reserve funds earn no 
    interest.  So the choices were:
    
    	1) Leave everything the way it was and keep more on deposit at the
    	   Fed.  The estimated cost (lost investment income) was about
    	   $640,000 ($16 million @ ~4%).  DCU currently keeps $11 million
    	   on reserve.
    
    	2) Bring DCU in full compliance with Reg D at no cost but at a slight
    	   reduction in the ability to transfer funds by some members.
    
    
    Now, I think a bit of clarification is in order.  The limit of 6
    transactions per month is on EACH share account or share-type account
    (member described accounts, etc.)
    
    I hope this helps.

>    Has Phil bought the line hook line and stinker? ;-)
    
    I knew there was more to this change than was disclosed but there was
    no way this topic could be adequately described in a flyer IMO.  The
    Board didn't vote on this change BTW.  I'm glad somebody brought it up 
    though.  Always nice to know what changes are going on that might be
    considered "operational".
    
>    if we have to keep 11Mil in there , but 16 mil to satify how we do it
>    now, the lost income is 5mil *4% NOT 16mil at 4% since we'd have to
>    keep 11mil anyways.
    
    Sorry.  Guess my explanation wasn't clear enough.  The $16 million was
    IN ADDITION to the current $11 million.  So to keep things the way it
    was would require $27 million to be parked, interest free.
    
>    and, the provision about nameing transition accounts hasn't been
>    addressed.
>    is there an answer?
    
    I'm sure there's an answer, but I don't understand the question.  Any
    more detail?
    

I gathered from this that a transition account is any account which the
bank / cu must place an amount on deposit with the Fed. or place limits
on funds availability.  DCU, instead of depositing the funds with the Fed
took the route of limiting availability.

So, it is not Sched D that says you must limit EFT transfers to 6 per
month, but rather that is how DCU chose to meet the requirements of
Sched. D   And it is why other financial institutions don't have such
limits ... they've met the requirements some other way ... like deposits
with the Fed.

It looks like the primary reason for this is to stop money laundering
and causing a run on a bank by "playing" the float.

Stuart

>    transition accoutns are discribed in reg D  204.2 (e).
    
    Ed, I think you mean transaction accounts.  But I still don't understand
    your previous question with regards to naming them.
    
>    as I suggest earilier in this note, If I were a director, I'd want the
>    ability to consult with a person who could decode reg d.  and that
>    person would not be current managment.
>    I could not expect any director to be able to decode that goublygook.
    
    While Reg. D is a bit heavy, it is understandable if you wade through
    it slow enough.
    
>    However I do expect the directors to look after my best interests and
>    investigate what managment is trying to do to us!
    
    Hmmm...  That's what I thought I was doing Ed.
    
    >This is ANOTHER reduction in service to users.
    
    Do you think this "service" is worth $640,000 a year?  (And potentially
    MUCH more if interest rates rise, or deposits rise)
    
>    a conflicting piece of data given by Julie is that if I go to the ATM,
>    I can do as many xfers as I want.
    
    This is correct according to the flowchart in .16
    
    >If I use easytouch, I can only do 6/month.
    
    To be complete, you can do 6 transactions PER SAVINGS ACCOUNT per
    month.
    
    >Again, we punish the people outside of the GMA!
    
    By "we" do you mean the government?
    
    >and, why don't we require the reserves?
    
    Reserves ARE required.

    
>>    a conflicting piece of data given by Julie is that if I go to the ATM,
>>    I can do as many xfers as I want.
>    
>    This is correct according to the flowchart in .16
>    
>>If I use easytouch, I can only do 6/month.
>    
>    To be complete, you can do 6 transactions PER SAVINGS ACCOUNT per
>    month.
    
    Phil, I'm following all this for the most part but what I don't
    understand is why ATMs are different than EASYTOUCH. I'm not sure
    how they should be treated under Reg D but it strikes me that they
    should both be treated the same.
    
    			Alfred

    
>    Phil, I'm following all this for the most part
    
    You must have taken Advanced Government Bureaucracy... ;-)
    
    >but what I don't
    >understand is why ATMs are different than EASYTOUCH. I'm not sure
    >how they should be treated under Reg D but it strikes me that they
    >should both be treated the same.
    
    Well, for one an Easy Touch transfer could be made from a beach, in say
    Tahiti, whereas an ATM might be hard to find.
    
    This whole thing may be a classic government attempt to address illegal
    activities with the shot gun approach.  Sometimes innocents get caught in
    the crossfire.  I don't personally agree with it.  If people are using
    it for illegal activities, it seems to me the record of these
    transactions would make great evidence and be a tipoff to the
    government.
    

        
>>    Phil, I'm following all this for the most part
>    
>    You must have taken Advanced Government Bureaucracy... ;-)

    Next best thing. 6 years on School District budget committees. :-)

    			Alfred