John found himself the proud father of a $10 fine from WaMu this morning because he exceeded 6 transfers from his savings account during a single billing period. When he called in to find out why this happened, he was told it was a federal regulation: “The representative from Wamu said there was nothing she could do and I need to better monitor my account. Honestly I just want to know if anyone else has had this problem?” It’s a real regulation, John, but banks don’t have to charge a fine—they can also simply warn you or not allow the seventh transaction—but then they wouldn’t get to make another $10 off of you.
I talked to the person who couldn’t do anything for me and then I talked to a “Manager”. She explained to me that there are federal regulations that state that a person can only transfer money 6 times in a billing cycle.
The regulation she’s referring to is Federal Regulation D, and in section 204(d)(2) it defines exactly what constitutes a savings account. One of the characteristics is there can only be up to six pre-authorized or automatic transfers—however, you can make as many transfers as you want in person or via an ATM machine.
The $10 fee WaMu hit you with was entirely their own invention, however. A footnote to section 204(d)(2) describes what banks can do to ensure customers don’t go over the limit:
In order to ensure that no more than the permitted number of withdrawals or transfers are made, for an account to come within the definition in paragraph (d)(2) of this section, a depository institution must either:
(a) Prevent withdrawals or transfers of funds from this account that are in excess of the limits established by paragraph (d)(2) of this section, or
(b) Adopt procedures to monitor those transfers on an ex post basis and contact customers who exceed the established limits on more than an occasional basis.
Call us pessimists, but we bet every major bank opts for an ex post fine in order to generate additional income. That means if you have to make more than six transactions in a given month, use an ATM machine if you can.
(Photo: Getty Images)