Regulation D Study Act

Mr. Speaker, I rise today in support of H.R. 3240, the Regulation D Study Act.

This bill is simple. It directs the Government Accountability Office, GAO, to study the regulatory impact on depository institutions, consumers, and monetary policy.

Current regulations limit common online and automated transfers and withdrawals from nontransaction accounts, such as savings accounts, to only six transfers per month. The regulators who created this rule never envisioned online banking and modern banking technology, and because only some transactions are subject to the six-per-month restriction and others are without limit, this rule is very confusing to consumers.

Today, many families use online banking tools to actively manage their finances with unnecessary restrictions from these outdated rules. Regulation D requirements force financial institutions to focus on compliance concerns rather than spending more time with consumers to meet their financial needs.

This is commonsense legislation that is not only good for financial institutions, but for American families as well. The issue of allowing only six transfers per month for certain bank accounts hasn't been reviewed in several decades. With new technological advancements and online banking, we owe it to our hardworking American families to revisit this regulation.

H.R. 3240 enjoys support from the Credit Union National Association and the National Association of Federal Credit Unions, whose financial institutions serve millions of Americans.

Mr. Speaker, I will submit for the Record a letter of support from the president of the Credit Union National Association, which serves 100 million members across the country.

Credit Union

National Association,

Washington, DC, December 1, 2014.

Hon. John Boehner,

Speaker, House of Representatives,

Washington, DC.

Hon. Nancy Pelosi,

Minority Leader, House of Representatives,

Washington, DC.

Dear Speaker Boehner and Leader Pelosi: On behalf of the

Credit Union National Association (CUNA), I am writing in

support of H.R. 3240, bipartisan legislation scheduled for

consideration this week by the House of Representatives. CUNA

is the largest credit union advocacy organization in the

United States, representing America's state and federally

chartered credit unions and their 100 million members.

H.R. 3240, sponsored by Representatives Robert Pittenger

(R-NC) and Carolyn Maloney (D-NY), directs the Government

Accountability Office (GAO) to study the impact of the

Federal Reserve Board's monetary reserve requirements,

implemented through Regulation D, on depository institutions,

consumers and monetary policy. The House Financial Services

Committee favorably reported this bill to the House on July

20, 2014 by voice vote.

Regulation D impacts credit union members by limiting the

number of automatic withdrawals from a member's savings

account to six transactions per month. The impact of this

limit is to unnecessarily cause credit union members to

overdraft their checking accounts when a debit draws the

checking account balance below zero and the member has

already had six automatic transfers during the month. When

this happens, members who may have the funds in a savings

account to cover the debit are hit with nonsufficient fund

fees (NSF) from their financial institution and, when a check

is involved, a returned check fee from the merchant. This is

not a result of an overdraft protection program--this happens

because of a regulatory cap on automatic transfers. It is

difficult for credit union members affected by the cap to

understand that this is out of the control of the credit

union when the funds to cover the debit are sifting in their

account at the credit union.

We believe the cap should be increased or eliminated, but

we understand that one of the reasons the regulation is in

place is because the Federal Reserve Board is authorized to

use it as a tool to conduct monetary policy. As a first step

toward a possible change in this cap, the legislation directs

the GAO to study the issue. This effort will make more

information available for Congress to determine whether an

increase in or the elimination of this cap would

substantially affect the Federal Reserve Board's ability to

conduct monetary policy.

Specifically, H.R. 3240 directs the GAO to examine and

report within one year of enactment on the following topics:

an historic

overview of how the Federal Reserve Board has used reserve

requirements to conduct monetary policy; the impact of the

maintenance of reserves on depository institutions, including

the operations requirements and associated costs; the impact

on consumers in managing their accounts, including the costs

and benefits of the reserving system; and, alternatives to

required reserves the Federal Reserve Board may have to

effect monetary policy. The bill also directs the GAO to

consult with credit unions and community banks.

According to former Federal Reserve Board Chairman Ben

Bernanke, ``. . . reserve balances far exceed the level of

reserve requirements and the level of reserve requirements

thus plays only a minor role in the daily implementation of

monetary policy.'' A GAO study will allow an objective

assessment of whether the rarely changed monetary reserves

imposed on depository institutions and consumers are

necessary in order for the Federal Reserve Board to implement

monetary policy in the 21st century. CUNA strongly supports

this bill.

On behalf of America's credit unions and their 100 million

members, thank you for scheduling H.R. 3240 for

consideration. We look forward to working with you and

members of the House of Representatives to swiftly enact this

legislation.

Sincerely,

Jim Nussle,

President & CEO.

As technology advances, we need to make sure Federal regulations keep pace. Former Federal Reserve Chairman Bernanke has said that account ``reserve balances far exceed the level of reserve requirements, and the level of reserve requirements thus plays only a minor role in the daily implementation of monetary policy.''

We can continue to protect the financial system while allowing families more flexibility to use online banking tools.

This legislation has strong bipartisan support, and I would like to thank my colleague from New York, Congresswoman Maloney, who serves on the Financial Services Committee, for joining me in introducing H.R. 3240.

A GAO study will allow an objective assessment of whether the rarely changed monetary reserves imposed on depository institutions and consumers are necessary in order for the Federal Reserve to implement monetary policy in the 21st century.

Mr. Speaker, on December 1, 2014, on Roll Call #532 on the Motion to Suspend the Rules and Pass, as Amended H.R. 5629-- Strengthening Domestic Nuclear Security Act of 2014, I am not recorded because I was absent for medical reasons. Had I been present, I would have voted YEA.

On December 1, 2014, on Roll Call #533 on the Motion to Suspend the Rules and Pass H.R. 3438--National Laboratories Mean National Security Act, I am not recorded because I was absent for medical reasons. Had I been present, I would have voted YEA.

On December 2, 2014, on Roll Call #534 on the Motion to Suspend the Rules and Pass S. 2040--Blackfoot River Land Exchange Act of

2014, I am not recorded because I was absent for medical reasons. Had I been present, I would have voted YEA.

On December 2, 2014, on Roll Call #535 on the Motion to Suspend the Rules and Pass H.R. 5050--May 31, 1918 Act Repeal Act, I am not recorded because I was absent for medical reasons. Had I been present, I would have voted YEA.

On December 2, 2014, on Roll Call #536 on the Motion to Suspend the Rules and Pass, as Amended H.R. 3572--To revise the boundaries of certain John H. Chafee Coastal Barrier Resources System units, I am not recorded because I was absent for medical reasons. Had I been present, I would have voted YEA.

On December 2, 2014, on Roll Call #537 on the Motion to Suspend the Rules and Pass H.R. 5739--No Social Security for Nazis Act, I am not recorded because I was absent for medical reasons. Had I been present, I would have voted YEA.

On December 2, 2014, on Roll Call #538 on the Motion to Suspend the Rules and H.R. 3240--Regulation D Study Act, I am not recorded because I was absent for medical reasons. Had I been present, I would have voted YEA.

On December 2, 2014, on Roll Call #539 on the Motion to Suspend the Rules and Pass, as Amended H.R. 2366--World War I American Veterans Centennial Commemorative Coin Act, I am not recorded because I was absent for medical reasons. Had I been present, I would have voted YEA.

On December 3, 2014, on Roll Call #540 on H. Res. 766, Providing for consideration of the bill (H.R. 5771) to amend the Internal Revenue Code of 1986 to extend certain expiring provisions and make technical corrections, and for other purposes, and providing for consideration of the bill (H.R. 647) to amend the Internal Revenue Code of 1986 to provide for the tax treatment of ABLE accounts established under State programs for the care of family members with disabilities, and for other purposes. Had I been present, I would have voted NAY.

On December 3, 2014, on Roll Call #541 on the Motion to Suspend the Rules and H.R. 5769--``To authorize appropriations for the Coast Guard for fiscal year 2015, and for other purposes.'', I am not recorded because I was absent for medical reasons. Had I been present, I would have voted YEA.

On December 3, 2014, on Roll Call #543 on the Democratic Motion to Recommit H.R. 5771, I am not recorded because I was absent for medical reasons. Had I been present, I would have voted YEA.

On December 3, 2014, on Roll Call #544 on Passage of H.R. 5771--Tax Increase Prevention Act, I am not recorded because I was absent for medical reasons. Had I been present, I would have voted YEA.

On December 3, 2014, on Roll Call #545 on Passage of H.R. 647-- Achieving a Better Life Experience Act, I am not recorded because I was absent for medical reasons. Had I been present, I would have voted YEA.

On December 4, 2014, on Roll Call #546 on the Motion on Ordering the Previous Question on the Rule, I am not recorded because I was absent for medical reasons. Had I been present, I would have voted NAY.

On December 4, 2014, on Roll Call #547 on H. Res. 770--Rule providing for consideration of the Motion to Concur in the Senate Amendment with an Amendment to H.R. 3979--National Defense Authorization Act for Fiscal Year 2015, H.R. 5759--``Preventing Executive Overreach on Immigration Act,'' and H.R. 5781--California Emergency Drought Relief Act of 2014, I am not recorded because I was absent for medical reasons. Had I been present, I would have voted NAY.

On December 4, 2014, on Roll Call #548 on H. Res. 758--Strongly condemning the actions of the Russian Federation, under Vladimir Putin, which has carried out a policy of aggression against neighboring countries aimed at political and economic domination, as amended, I am not recorded because I was absent for medical reasons. Had I been present, I would have voted YEA.

On December 4, 2014, on Roll Call #549 on the Democratic Motion to Recommit H.R. 5759, I am not recorded because I was absent for medical reasons. Had I been present, I would have voted YEA.

On December 4, 2014, on Roll Call #550 on Passage of H.R. 5759, I am not recorded because I was absent for medical reasons. Had I been present, I would have voted NAY.

On December 4, 2014, on Roll Call #551 on the Motion to Concur in the Senate Amendment with an Amendment to H.R. 3979, I am not recorded because I was absent for medical reasons. Had I been present, I would have voted YEA.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 3240) to instruct the Comptroller General of the United States to study the impact of Regulation D, and for other purposes.

Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days within which to revise and extend their remarks and submit extraneous materials for the Record on H.R. 3240, currently under consideration,

Mr. Speaker, I yield myself as much time as I may consume.

I rise in support of H.R. 3240, the Regulation D Study Act, introduced by my friend from North Carolina (Mr. Pittenger), a colleague on the Financial Services Committee. This is a simple but important bill that directs the GAO to study the impact that the Federal Reserve's Regulation D minimum reserve requirements have on depository institutions, consumers, and monetary policy.

Section 19 of the Federal Reserve Act gives the Federal Reserve authority to impose reserve requirements on the deposits of member institutions. These requirements are set forth in what is commonly referred to as Reg D.

Regulation D reserve requirements are calculated as a percentage of the amount of funds a financial institution's members hold in transaction accounts. A transaction account is typically an account from which the depositor or account holder is permitted to make unlimited transfers or withdrawals, such as a checking account. Because balances in those accounts can change quickly, the Federal Reserve requires institutions to reserve funds for those accounts as a stabilizing tool for the money supply. Regulation D limits the number of transfers and withdrawals from nontransaction accounts to six per month.

As legislators, it is important that we periodically review the impact of regulations on those whom we have the honor to represent. The Regulation D Study Act does just that, and I am pleased to support it.

I reserve the balance of my time.

Mr. Speaker, I yield as much time as he may consume to the gentleman from North Carolina (Mr. Pittenger), the sponsor of this legislation.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.

I thank the gentlelady for her leadership and for yielding.

Mr. Speaker, I rise today in support of H.R. 3240. I am pleased to have worked on this bill with my colleague from North Carolina (Mr. Pittenger). I would also like to take this opportunity to compliment his work on attempting to end terrorism, cracking down on terrorism financing in our country.

The purpose of this particular bill is to study the current monthly limits, under Regulation D, on the number of automatic withdrawals from a consumer's savings account.

Currently Regulation D limits the number of automatic withdrawals from a consumer's account to six per month. This means that if a consumer has already hit his limit on automatic withdrawals for the month and then overdrafts his or her checking account, the bank won't transfer money from his savings account to cover the overdraft, and this results in an unnecessary overdraft fee.

As two recent studies by the Consumer Financial Protection Bureau have noted, overdraft fees disproportionately harm those of us who can least afford it. Unsophisticated consumers are most hit by them. So if there is a regulation that is causing unnecessary overdraft fees, we should study whether that regulation is necessary. That is what our commonsense bill does. It asks the GAO to study the limitation in Regulation D to determine if it is, in fact, useful or harmful.

This bill is supported by many stakeholders in financial services: the Credit Union National Association, the National Association of Federal Credit Unions, and the American Bankers Association.

Mr. Speaker, I urge my colleagues to support this commonsense bill, and I appreciate the help of my colleague.

Mr. Speaker, I was unavoidably absent during the week of December 1, 2014. If I were present, I would have voted on the following: rollcall No. 532--On final passage of H.R. 5629--``yea;'' rollcall No. 533--On final passage of H.R. 3438-- ``yea;'' rollcall No. 534--On final passage of S. 2040--``yea;'' rollcall No. 535--On final passage of H.R. 5050--``yea;'' rollcall No. 536--On final passage of H.R. 3572--``yea;'' rollcall No. 537--On final passage of H.R. 5739--``yea;'' rollcall No. 538--On final passage of H.R. 3240--``yea;'' rollcall No. 539--On final passage of H.R. 2366-- ``yea;'' rollcall No. 540--On final passage of H. Res. 766--``nay;'' rollcall No. 541--On final passage of H.R. 5769--``yea;'' rollcall No. 542--On approving the Journal--``yea;'' rollcall No. 543--On motion to recommit with instructions--``yea;'' rollcall No. 544--On final passage of H.R. 5771--``aye;'' rollcall No. 545--On final passage of H.R. 647-- ``yea;'' rollcall No. 546--On ordering the previous question on the rule--``nay;'' rollcall No. 547--On final passage of H. Res. 770-- ``no;'' rollcall No. 548--On final passage of H. Res. 758--``yea;'' rollcall No. 549--On Motion to recommit with instructions--``yea;'' rollcall No. 550--On final passage of H.R. 5759--``nay;'' rollcall No. 551--On motion to concur with amendment on H.R. 3979--``yea.''

personal explanation