Federal Regulation D Frequently Asked Questions (FAQs)

A Few Terms :

• Transaction Accounts-Checking Accounts
• Non-Transaction Accounts-Savings and Money Market Accounts
• Automated Clearing House (ACH) Transactions-These include pre-authorized debits or withdrawals made from accounts such as Mortgage, Rent, Insurance, Gym Dues, Online Purchases such as E-Bay, etc. These are also known as Electronic Funds Transfer (EFT) transactions.
• Electronic Funds Transfer (EFT)-See ACH transactions above.

Q: What is Federal Regulation “D”?
A: Regulation “D” requires financial institutions that offer Checking Accounts (also known as Transaction Accounts) to maintain enough money in the Federal Reserve System to cover outstanding checks should the institution fail. Although RCU is a financially sound institution, we are still required to comply with this Regulation.

Q: So What Does the Regulation Mean to Me?
A: Regulation “D” requires the Credit Union to keep track of monthly transactions on Savings and Money Market Accounts (also known as Non-Transaction Accounts). Regulation “D” limits these types of transactions to six (6) per month. Regulation “D” also limits the number of checks that can clear on a Money Market Account each month to three (3).

Q: Can You Summarize the Types of Transactions that Count for Regulation “D” on Non-Transaction Accounts Such as Savings or Money Market?
A: Generally speaking, any combination of the following transactions cannot exceed 6 per calendar month on Non-Transaction Accounts:

• Transfers Made Through 24-Hour Telephone Teller
• Overdrafts to Checking
• Transfers Made Over the Telephone (such as through our Telephone Member Service Center)
• Transfers Made Through RCU Online Banking
• Automated Clearing House (ACH) or Electronic Funds Transfer (EFT) Transactions
• Monthly Automatic Transfers

Q: Which Types of Transactions are Unlimited on Non-Transaction Accounts?
A: As a general rule of thumb, you may perform an unlimited number of transactions that you make in person or that you authorize with your signature, such as:

• Transfers Made Through an ATM
• Transfers Made in Person and With Your Signature (such as with an RCU Teller)
• Cashier's Checks Withdrawn From Your Account and Mailed to You
• Loan Payments to RCU Loans
• Telephone Transfers Authorized With Your Signature (such as a fax, letter, etc.)

Q: Why Do Loan Payments from Savings NOT Count for Regulation “D”?
A: Regulation “D” limits the number of transactions made from Non-Transaction Accounts to Transaction Accounts because of the reserve requirements. A loan is not a Transaction Account and is therefore not affected by Regulation “D”.

Q: What Happens If I’ve Had 6 Regulation “D” Transactions for the Month and I Need an Overdraft to Pay a Check on my Checking Account?
A: Due to RCU’s requirement to comply with the Regulation, if your account has had the maximum number of transactions in a given month—even if you have enough money to cover the check in your designated Overdraft account, RCU is required to return the check unpaid.

Q: What Can RCU Suggest to Help Members Stay Within the Regulation?
A: There are a number of ways RCU Members can conduct their banking and remain within the limitations of Regulation “D”. Here are a few ideas:

• If you have your RCU Savings or Money Market Account set up as the source of your Overdraft Protection for Checking, consider keeping more money in your RCU Checking Account, which will necessitate fewer Overdrafts.
• RCU offers Dividend Earning and High Balance Dividend Earning Checking Accounts which pay competitive dividends tiered by balance.
• If you make frequent transfers from Savings or Money Market to Checking, consider making fewer transfers using larger dollar amounts.
• You may enjoy unlimited (up to your credit limit) transfers from an RCU Overdraft Line of Credit Loan which transfers funds to your Checking Account should the need arise. As with all of RCU’s Consumer Loans, our interest rates are competitive and you are only required to pay interest on the outstanding principal balance of your loan on days in which your loan has a balance.

Q: If a Check is Returned Because I’ve Reached the Regulation “D” Limit, Will I be Charged a Fee?
A: Reaching your Regulation “D” limit for Overdraft transfers disables the Overdraft feature. If there are insufficient funds in the Checking Account and the check is returned, it warrants an NSF fee.

Q: If an ACH Debit is Returned Because I’ve Reached the Regulation “D” Limit, Will I Be Charged a Fee?
A: No. In this instance, you will not be charged a fee because the ACH debit is not being returned for non-sufficient funds, and therefore does not warrant an NSF fee.

If you have any questions, please call us at (800) 479-7928.