Reg D Flashcards
What institutions must meet reserve requirements mandated under Reg D?
- FDIC insured institutions (banks, savings banks, mutual savings banks, savings associations, etc.)
- Insured credit unions
- Any member of a Federal Home Loan Bank
- A branch of a foreign bank located in the U.S.
A demand deposit is defined as a deposit payable on demand or with a maturity or required notice period of less than __ days or for which the bank does not reserve the right to require at least __ days’ notice of withdrawal.
7
7
A time deposit is defined as a deposit that has a maturity of at least __ days.
7
What are the exceptions for not charging an early withdrawal penalty?
- Death of an account owner
- Account owner is determined to be legally incompetent
- Account owner is disabled or aged 59.5 and withdraws from an IRA.
- Account owner withdraws from a time deposit within 10 days after maturity.
T/F: A Report of Deposits must be filed with the Federal Reserve Bank in the district where the institution is located using Form FR 2900.
True
How must a bank maintain reserves, as required by Reg D?
- Vault cash
- Balances in a Federal Reserve Bank
- Pass-through correspondent
How often must banks report on their reserves, as required by Reg D?
weekly or quarterly
How are reserves computed under Reg D?
By applying the appropriate reserve ratio to net transaction accounts, non-personal time deposits and Eurocurrency liabilities.
Deficiencies in an institution’s required reserve balance are subject to a charge equal to the primary credit rate in effect for borrowings from the Federal Reserve Bank plus __%.
1%
Which one of the following items is NOT eligible as a form of reserves?
a. Vault cash
b. Balance maintained with the Federal Reserve Bank
c. Pass-through account maintained at a member bank
d. Government securities
d. Government securities
Which of the following accounts is subject to reserve requirements?
a. A savings account owned by an individual
b. An IRA account
c. A time deposit owned by a trust for an individual
d. A checking account owned by an individual
d. A checking account owned by an individual
Which of the following account monitoring systems would not achieve compliance with Regulation D’s classification of “savings accounts”?
a. The bank allows customers to open money market savings accounts and make unlimited withdrawals by check. However, after the sixth check the bank converts the account to a regular checking account for the remainder of the month. At the beginning of the next month, the account reverts to a money market savings account until the customer writes a seventh check on the account.
b. The bank allows customers to make only the required number of withdrawals and preauthorized transfers on money market accounts, but the bank has no system for preventing the customer from writing too many checks on the account. The bank reviews its records and warns its customers who make too many withdrawals that the account will convert to a checking account if too many withdrawals occur again.
c. The bank offers money market accounts and has a sophisticated computer program that will not allow an improper number of transactions to occur.
d. The bank offers money market accounts. If the depositor makes too many transfers, the account converts to a transaction account and does not convert back to a non-transaction account.
a. The bank allows customers to open money market savings accounts and make unlimited withdrawals by check. However, after the sixth check the bank converts the account to a regular checking account for the remainder of the month. At the beginning of the next month, the account reverts to a money market savings account until the customer writes a seventh check on the account.
According to Regulation D, when may interest be paid on money market deposit accounts?
a. At maturity
b. When there are six or fewer preauthorized transfers permitted per month
c. When the deposit is less than $100,000
d. If the financial institution imposes a service charge when there are more than six preauthorized transfers per month
b. When there are six or fewer preauthorized transfers permitted per month
Which of the following bank products are considered to be transaction accounts?
a. A savings account from which the bank pays third parties weekly pursuant to the depositor’s written requests mailed to the bank
b. A savings account from which the customer regularly makes more than six telephone transfers per month
c. A money market certificate of deposit where the interest is credited monthly to another account of the depositor
d. A savings account into which weekly deposits are made from a checking account pursuant to the depositor’s telephone requests
b. A savings account from which the customer regularly makes more than six telephone transfers per month
When may the Federal Reserve institute supplemental reserve requirements in addition to the basic reserve requirements?
a. When additional balances are needed for clearing purposes
b. When supplemental reserves are needed to impose monetary policy
c. When additional balances are needed to supplement the regular reserve cost structure
d. When the President directs it by Executive Order
b. When supplemental reserves are needed to impose monetary policy
