WASHINGTON (12/20/11)--The Credit Union National Association (CUNA) has asked the Federal Reserve to give credit unions and other financial institutions a minimum of nine months to prepare for pending changes to its Regulation D, which governs reserve requirements of depository institutions.
The Fed's Reg D proposal is intended to simplify the administration of reserve requirements. The proposal would create a common two-week maintenance period for all depository institutions, create a penalty-free band around reserve balance requirements in place of carryover and routine penalty waivers, discontinue as-of adjustments related to deposit revisions, replace all other as-of adjustments with direct compensation, and eliminate the contractual clearing balance program.
In a comment letter that was sent to the Fed on Monday, CUNA noted that credit unions are working to implement many of the new regulations imposed as a result of the Dodd-Frank Act and other regulatory initiatives, and said "requiring depository institutions to put into operation any of the proposed changes in the first quarter of 2012 may prove unduly burdensome," particularly for smaller credit unions.
Overall, CUNA said it generally supports the proposed Reg D amendments, but also questioned the value of a related requirement of Reg D that limit transfers from savings to transaction accounts. CUNA also urged the Fed to reconsider its six transfer limitation on transfers and/or withdrawals from savings deposit accounts, and suggested the Fed either raise this limit or abolish it entirely.
"Due to technological advances, consumers can now make payments and transfers online, via telephone, at point-of-sale terminals, and via Automated Clearing House (ACH) transactions," and these advances have enabled financial institutions "to deliver financial services to consumers conveniently and at lower costs." The six transfer limitation "unreasonably restricts consumers from being able to easily access their own funds for their own use," CUNA said.
CUNA also encouraged further efforts to reduce regulatory burdens on credit unions, including those under Reg D.
For the full comment letter, use the resource link.