Key House panel approves Pittenger-Maloney bill to study outdated Fed rule that limits consumer bank account transfers

WASHINGTON -- The House Financial Services Committee today approved a bill (H.R. 3240) introduced by Congressman Robert Pittenger (R-NC) and Congresswoman Carolyn B. Maloney (D-NY) to initiate a GAO study on an outdated banking regulation, which has forced banks to limit consumers to six automatic withdrawals from their savings account per month. The Regulation D Study Act, which passed by voice vote, would study how the regulation affects consumers and what alternatives could be implemented in its place.

“The way Americans bank has changed since the 1980s but in some circumstances the regulations have not changed enough,” said Maloney. “With the advent of mobile banking, ATMs, and debit cards, consumers are making many more transactions than they used to. A regulation that arbitrarily limits the number of automatic withdrawals a consumer can make to just six has created confusion for consumers. We need to consider changing the regulation, but it’s important to study all of the implications first. That’s why this GAO study is needed.”

“These regulations made sense when most bank transactions ended with a free lollipop,” said Pittenger “The world has changed. We must update banking regulations to reflect modern technology and make it easier for hardworking Americans to manage their personal finances.”

H.R. 3240 directs the GAO to study:

• How the Fed has used reserve requirements to conduct monetary policy.
• The impact of the maintenance of reserve 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.
• Alternatives to required reserves the Fed may have to affect monetary policy.

The legislation will now be sent to the full U.S. House of Representatives for a vote, which is expected before the end of 2014.