On April 5, 2012, the Federal Reserve Board announced its Final Rule regarding the revision of Regulation D, Reserve Requirements for Depository Institutions , which is most commonly associated with limiting to six per month the number of withdrawals from savings and money market accounts. However, Regulation D also specifies the amount of cash reserves a financial institution must maintain, either in vault cash or on deposit at a Federal Reserve Bank. The Federal Reserve Board’s objective was to simplify the deposit reserve requirements, and this simplification is to be accomplished through a change in how reserve requirements are computed during the “maintenance period” (the period over which a financial institution measures whether reserve requirements have been met based on end-of-the-day balances). In addition, thresholds for being under reserved without penalty have been established. The amendments will be phased in from July 12, 2012, to January 24, 2013. To read the Federal Reserve Board’s Final Rule on deposit reserve requirements go here.
To discuss the changes to deposit reserve requirements under Regulation D, please contact the experts listed below at PYA, (800) 270-9629.
