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Definitions for Regulations Affecting All Savings Associations; Money Market Deposit Accounts

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Information about this document as published in the Federal Register.

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Office of Thrift Supervision, Treasury.


Final rule.


The Office of Thrift Supervision is amending its regulations to eliminate restrictions on certain kinds of transfers from money market deposit accounts for savings associations. The Board of Governors of the Federal Reserve System (the FRB) has already amended its regulations (“Regulation D”) to eliminate these restrictions for member banks. Because this change is ministerial, the OTS has determined for good cause that public notice and comment is unnecessary under the Administrative Procedure Act (APA) and is implementing this change by means of a final rule without notice and comment.


Effective Date: The rule is effective June 14, 2010.

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Suzanne McQueen, Consumer Regulation Analyst, Compliance and Consumer Protection (202) 906-6451, Marvin L. Shaw, Senior Attorney, Regulations and Legislation Division, Office of the Chief Counsel, (202) 906-6639, Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552.

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I. Background

A. Federal Reserve Board Amendments to Regulation D

On May 29, 2009, the Board of Governors of the Federal Reserve System (FRB) issued final amendments to 12 CFR part 204, “Reserve Requirements of Depository Institutions (Regulation D).” [1] Among other changes, the amendments eliminate restrictions on certain types of transfers that consumers can make from savings deposits. The changes became effective on July 2, 2009. In the definition for savings deposit, Regulation D lists several types of savings deposit accounts, including Money Market Deposit Accounts.

Prior to the FRB amendments, Regulation D limited the number of “convenient” transfers and withdrawals from savings deposits to not more than six per month. Within this overall limit of six, not more than three transfers or withdrawals could be made by check, debit card, or similar order by the depositor and payable to third parties (the three transfer sublimit). Under the FRB final amendments to Regulation D, the permissible monthly number of transfers or withdrawals from savings deposits by check, debit card, or similar order payable to third parties has been increased from three to six. In other words, while the FRB has decided to retain the overall six-transfer limit for savings deposits, it has eliminated the three transfer sublimit within the overall limit that applied to transfers or withdrawals from savings deposits by check, debit card, or similar order payable to third parties. The FRB decided to eliminate the three transfer sublimit because distinctions between such transfers and other types of pre-authorized or automatic transfers subject to the six-per-month limit were no longer logical in light of technological advances.

B. OTS Regulations Addressing Savings Accounts

Pursuant to its authority under the Home Owners' Loan Act (HOLA),[2] OTS issued regulations addressing limits on certain types of savings accounts known as Money Market Deposit Accounts (MMDAs) at 12 CFR 561.28. A second provision—12 CFR 557.10—which addresses OTS's authority under HOLA to raise funds through accounts, further specifies that “12 CFR parts 204 [Regulation D] and 230 apply to your deposit accounts.”

OTS has received inquiries from savings associations about whether the agency is planning to amend its definition of MMDA to make it consistent with the FRB and FDIC [3] regulations. The savings associations stated that without such an amendment Start Printed Page 33502they would be at a competitive disadvantage.

C. Amendment to Definition of Money Market Deposit Accounts

In accord with the FRB amendment to Regulation D and the FDIC's amendment to its definition of “demand deposit,” OTS is amending its definition of Money Market Deposit Accounts in section 561.28 to eliminate the three transfer sublimit. This will be done by eliminating the proviso in subsection 561.28(a)(2)(i), which currently reads as follows: “Provided, that no more than three of the six transfers provided for in this paragraph (a)(2)(i) may be by check, draft, debit card, or similar order made by the depositor and payable to a third parties.”

II. Exemption From Public Notice and Comment

To issue a final rule without public notice and comment, an agency must find good cause that notice and comment are impracticable, unnecessary, or contrary to the public interest. 5 U.S.C. 553(b) Similarly, to issue a rule that is immediately effective, the agency must find good cause for dispensing with the 30-day delay required by the Administrative Procedure Act (APA).

OTS regulations require that the FRB's Regulation D apply to OTS's definition of various savings accounts. To achieve consistency among the agencies and to further the intent of OTS's regulation at 12 CFR 557.10, OTS has decided to eliminate the three transfer sublimit for savings associations in the same way that the FRB has done for member banks and that the FDIC has done for banks under its jurisdiction. For this reason, OTS has determined for good cause that public notice and comment is unnecessary under the APA, and that the rule should be published in the Federal Register as a final rule.

III. Effective Date

For the same reasons OTS has determined that public notice and comment is unnecessary for good cause, OTS also finds good cause to adopt an effective date that would be less than 30 days after the publication in the Federal Register pursuant to the APA. 5 U.S.C. 553(d) Accordingly, the amendment to section 561.28 will be effective as of the date of publication in the Federal Register.

IV. Regulatory Flexibility Act

An initial regulatory flexibility analysis under the Regulatory Flexibility Act (RFA) is required only when an agency must publish a general notice of proposed rulemaking. 5 U.S.C. 603. As already noted, OTS has determined that publication of a notice of proposed rulemaking is not necessary for this final rule. Accordingly, the RFA does not require an initial regulatory flexibility analysis. Nevertheless, OTS has considered the likely impact of the rule on small entities and believes that the rule will not have a significant impact on a substantial number of small entities.

V. Executive Order 12866

OTS has determined that this final rule does not constitute a “significant regulatory action” for purposes of Executive Order 12866.

VI. Unfunded Mandates Act of 1995

Section 202 of the Unfunded Mandates Reform Act of 1995, Public Law 104-4 (UMRA) requires that an agency prepare a budgetary impact statement before promulgating a rule that includes a Federal mandate that may result in the expenditure by state, local, and tribal governments, in the aggregate, or by the private sector of $100 million or more (adjusted annually for inflation) in any one year. If a budgetary impact statement is required, section 205 of the UMRA also requires an agency to identify and consider a reasonable number of regulatory alternatives before promulgating a rule. The OTS has determined that the rule will not result in expenditures by state, local, and tribal governments, or by the private sector, of $100 million or more. Accordingly, OTS has not prepared a budgetary impact statement or specifically addressed the regulatory alternatives considered.

VII. Paperwork Reduction Act

No collection of information pursuant to section 3504(h) of the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.) is contained in this final rule. Consequently, no information has been submitted to the Office of Management and Budget for review.

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List of Subjects in 12 CFR Part 561

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Accordingly, OTS amends chapter V, title 12, Code of Federal Regulations as set forth below.

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1. The authority citation for part 509 continues to read as follows:

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Authority: 12 U.S.C. 1462, 1462a, 1463, 1464, 1467a.

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2. Section 561.28 is amended by revising paragraph (a)(2)(i) to read as follows:

Money Market Deposit Accounts.

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(2)(i) The depositor is authorized by the savings association to make no more than six transfers per calendar month or statement cycle (or similar period) of at least four weeks by means of preauthorized, automatic, telephonic, or data transmission agreement, order, or instruction to another account of the depositor at the same savings association to the savings association itself, or to a third party.

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Dated: June 3, 2010.

By the Office of Thrift Supervision.

John E. Bowman,

Acting Director.

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[FR Doc. 2010-14243 Filed 6-11-10; 8:45 am]