What you should know about Regulation D
Regulation D (REG D) is a government regulation which, among other things, defines transaction accounts and non-transaction accounts. Transaction accounts (e.g., share draft checking) are allowed an unlimited number of transaction on the account. REG D places limitations on non-transaction accounts (i.e., savings, money manager, special savings and share certificates). HFS Federal Credit Union has defined your Share Accounts as non-transaction accounts.
Per REG D a member is limited to six (6) per month pre-authorized or automatic withdrawals, telephone transfers, or transfers initiated by personal computer on non-transaction accounts.
Regulation D was implemented by the Federal Reserve System to ensure that financial institutions maintain adequate reserves for the funds they have on deposit. Even though we are very financially sound, we are still required to comply with this Regulation.
Transactions that count against the six (6) REG D limits
- Automated payment transfers from a Share Savings Account (for example, insurance premiums or utility payments - to name a few);
- Transfers from Share Savings Account* using HFS Online Banking;
- Transfers from Share Savings Account using Audio Response;
- Transfers from Share Savings Account made by calling the Call Center (with one exception, see examples).
Share draft checking transactions that that count against the six (6) REG D limits:
- A check which overdraws your Share Draft Account causing HFS FCU to use overdraft protection transfers from your share account;
- A Debit MasterCard transaction which overdraws your Share Draft Account causing HFS FCU to use overdraft protection transfers from your Share Savings Account.
Transactions that don't count against REG D
- Transaction requested by mail;
- Transaction at an ATM machine;
- Transaction at any of our six (6) branch locations;
- Any deposit at any time
Summary of Transfer and Withdrawal Limitations
Regular Share Savings, Special Shares, Money Manager and Share Certificates
| Up to 6 Transfers or Withdrawals (*) | Unlimited Transfers (**) |
|---|---|
| ATM transfer to Another person's account | ATM withdrawal or transfer to another account |
| ATM bill payment by transfer | Automatic debit to make loan payment to same institution |
| ACH debit originated by Point of Sale | Check payable to self negotiated at HFS FCU |
| Check payable to another person | Check payable to drawee institution |
| Check payable to self or "cash" negotiated at another institution | Credit of any type |
| Automatic transfer to overdraft maintain minimum | Transfer of interest earned to another account |
| Recurring ACH debit authorized by member (insurance, gym, etc) | Transfer originated by mail or messenger |
| Paper or ACH transfer payable to another person | Transfer originated in person |
| Transfer on periodic basis for payroll | Wire transfer to another institution if requested in person, by messenger, or by mail (not fax) |
| Audio response or HFS Online Banking transfer to a deposit account to member | Withdrawal originated by phone, check payable of same member |
| Telephone transfer to account of another person | - |
| Transfer to club or other account on automatic basis | - |
| Wire transfers to another institution, if requested by telephone | - |
(*) A Share Savings Account may have up to six (6) transfers or withdrawals
per month to one of the member's other accounts here at HFS FCU or to
a third party of these types of transactions;
(**) For a Share Savings Account, these types of transfers or withdrawals
are NOT limited.
Why are Loan Payments from Savings not Subject to REG D limitations?
Reg D limits the number of transactions made from non-transaction accounts (share savings accounts) to transaction accounts (checking accounts) because of the "reserve" requirements. A loan is not classified as a transaction account and, therefore, is not affected by Regulation D.
What if I have had six (6) Transactions for the month and need an overdraft to pay a check?
If your account has had the maximum number of transactions in a given month - even if you have enough money in your designated overdraft account to cover the check -HFS FCU is required to return the item unpaid. As an alternative, you might consider using your HFS FCU Personal Line of Credit as a secondary source of overdraft protection for your Share Draft Checking Account. With the Line of Credit, you can then transfer funds whenever needed. As with all HFS FCU services, the interest rates on the Line of Credit is very competitive.
Will The Credit Union Charge Me A Fee If A Check Is Returned Because I Have Reached The Limitation On Transactions?
The answer would depend on several different factors. First, reaching your limit for overdraft transfers puts a halt on that feature. However, if there are insufficient funds in your Share Draft Checking Account and the check is returned, you will be charged a $20 NSF fee.
Tips to help you stay within the REG D Limits
- Make recurring electronic payments from your Share Draft Checking Account, not your Share Savings Account;
- Keep sufficient balances in your Share Draft Checking Account to avoid overdrafts;
- Set up overdraft protection to a Personal Line of Credit instead of your Regular Shares Savings Account;
- Perform transfers (including wire transfers) at an ATM, in person at one of our six (6) locations;
- Balance your Share Draft Checking Account periodically to limit NSF transfers from your Regular Shares Savings Account;
- Stop by the Credit Union or mail your funds transfer request, there is no limit when you do this;
- Finally, make one large transfer instead of several small ones, each regulated transfer counts as one transaction no matter what size.
If you have any questions about payments of overdrafts, please call (808) 930-1400 or (800) 216-2666.
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This Credit Union is federally insured
by the National Credit Union Administration