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MCUA Expresses Concerns with Reg CC & Reg D

In a comment letter filed on May 14, 2015, Missouri Credit Union Association (MCUA) reiterated concerns with withdrawal or transfer limits on savings accounts and proposed changes for remote deposit capture. The letter was sent to the Federal Reserve Board, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency,which sought feedback as part of their Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) review. National Credit Union Administration (NCUA) did not participate in this joint EGRPRA review; earlier this year, NCUA voluntarily conducted its own EGRPRA review.

As stated in MCUA's letter, Reg D continues to burden credit unions and consumers by imposing reserve requirements on depository institutions. Specifically, MCUA takes issue with the transaction limit set on savings accounts, only allowing depositors to making six transfers or withdrawals per month. This limit can lead to rejected transactions and potential non-sufficient funds fees on consumer-members. MCUA's letter emphasizes the importance of regulatory relief for credit unions as credit unions are devoting time and resources to comply with the policy that imposes an arbitrary limit on transfers rather than focusing on meaningful compliance issues. As discussed in the letter, MCUA supports a GAO study of the Reg D limit, and believes it will conclude that Reg D is not necessary for credit unions.

MCUA's letter reiterates concerns previously shared regarding the Fed's proposed changes to Reg CC, which pertains to remote deposit capture (RDC). The proposal provides two alternate frameworks for return requirements to encourage institutions that currently request paper returns to transition to electronic returns. As noted in our Reg CC letter, credit unions have concerns that the proposed changes would not only increase risks for all institutions offering RDC but could also result in unintended consequences, such as potential reductions in RDC services for consumers and businesses.