Academic journal article ABA Banking Journal

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Academic journal article ABA Banking Journal

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Article excerpt

Announcement to readers

In late November, Christine Walika was promoted to the position of director of ABA's Community Bankers Council. We wish her luck and thank her for years of helping to solve bankers' compliance puzzles. Her final column will appear next month. In March, a colleague of Christy's, Bill Hood, will take over.

ATS ACCOUNTS WITHOUT LIMITS

Q. What is the eligibility requirement to establish an automatic transfer account (ATS account) under 12 USC 371(a)? is it true, then, if a saving account depositor is eligible for the ATS account, the six transfers or withdrawals limitation will not apply? --G.H., N.Y.

A. According to the Examiner's Guide to Consumer Compliance, ATS Accounts are characterized by: natural persons only; unrestricted interest rate; bank must reserve its right to require seven-day depositor notice of withdrawal; and, unlimited automatic transfers to bank or DDA account. 12 USC 371a (note "(a)") provides:

No member bank shall, directly or indirectly, by any device whatsoever, pay any interest on any deposit which is payable on demand:

Notwithstanding any other provision of this section, a member bank may permit withdrawals to be made automatically from a savings deposit that consists only of funds in which the entire beneficial interest is held by one or more individuals through payment to the bank itself or through transfer of credit to a demand deposit or other account pursuant to written authorization from the depositor to make such payments or transfers in connection with checks or drafts drawn upon the bank, pursuant to terms and conditions prescribed by the Board. …

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