WASHINGTON — The Federal Reserve on Friday said it would relax a rule limiting bank and credit union customers to six transactions per month from their savings accounts in an effort to provide consumers more access to their deposits.
The Fed’s interim final rule suspends the transfer and withdrawal limits under Regulation D. Those limits were rendered unnecessary when the Fed reduced all reserve requirements to zero last month in order to cushion economic shock stemming from the coronavirus, the central bank said in a press release.
Banks will be able “to allow their customers to make an unlimited number of convenient transfers and withdrawals from their savings deposits at a time when financial events associated with the coronavirus pandemic have made such access more urgent,” the Fed said.
It was not immediately clear how long the Fed will allow transaction limits to be waived.
A number of trade groups, including the American Bankers Association and Independent Community Bankers of America, had urged to Fed to suspend the transaction limits, arguing that consumers would need more access to their banking accounts to cover bills and household expenses.
"In a letter to the Fed last month and in follow-up meetings, ICBA and community bankers advocated suspending the Reg D restrictions for at least 12 months due to the COVID-19 emergency,” ICBA President and CEO Rebeca Romero Rainey said in a statement. “ICBA noted that transfers will increase as consumers respond to financial pressures related to COVID-19.”
The National Association of Federally-Insured Credit Unions also urged the Fed to make the temporary revision to Regulation D permanent. President and CEO Dan Berger argued doing so would “give consumers greater control over their finances.”
“As the coronavirus pandemic exacerbates longstanding concerns with the transaction limit, it is important consumers have the flexibility they need to freely transfer essential funds between their accounts to cover everyday expenses and manage their personal finances,” he said in a statement.
Credit Union National Association President and CEO Jim Nussle agreed, and said his organization had pushed the Fed to lift the cap on transactions “for years.”
“We’ve long believed the threshold was arbitrary and unnecessary,” he said in a statement. “We thank the Federal Reserve for making this critical change.”
