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FDIC Federal Register Citations

Sent: Monday, September 17, 2001 3:02 PM
To: Comments
Subject: Comment on Study of Banking Regulations re: Online Banking

It is clear that online banking is a major component of where banking is headed in the future.  A regulation that impedes the promotion of, and use of, online banking is Regulation D.  This regulation puts limitations on how many times a "preauthorized transfer" can be made during the course of a month.  A "preauthorized transfer" includes transfers from savings and money market accounts that can be conveniently made via online banking.  
The preauthorized transfer limitation of six has been in effect for several years.  Since that time, banking has expanded it's services to include telephone banking, ATM's, and now, online banking.  All of these vehicles have made banking more convenient.  However, if money is transferred from savings or money market accounts using these vehicles, it is counted in the limitation of six. 
On one hand we are introducing and promoting these products, and on the other hand, we are notifying customers that they have exceeded their transfer limitation and have violated the law.   
Not long ago, legislation was pending that would increase the limit to twenty-four transfers per month; however, this would only apply to commercial accounts.  Please consider increasing the preauthorized transfer limitation imposed by Regulation D for all accounts. 
Julie Smith, Compliance Officer
Farmers & Merchants State Bank
Springfield, MN  56087
Last Updated 09/18/2001

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