DP12 Reg D Reserve Requirements for Depository Institutions

A. B, C, and D are incorrect because Regulation D closely restricts the number of withdrawals.

6. Sam is reviewing account options. He tells you he would like to open an account that would allow him to earn interest and write an unlimited number of checks per month. Which account would probably work best for Sam? A. NOW account B. Passbook savings account C. Time deposit account D. Savings account ID:421D94C3E9424D7683C3842956C3EA3D

D. A, B, and C are incorrect because only demand deposit accounts and NOW accounts are currently included in the reserve requirement calculation.

1. Which one of these account combinations is included in the reserve requirement calculation? A. Demand deposit and savings deposit accounts B. Time deposit and savings accounts C. Time deposit and NOW accounts D. Demand deposit and NOW accounts ID:38382DB2105240E0A64FABCCBF5EF6BE

B. A, C, and D are incorrect because the number of transactions allowed for these transaction types is restricted by Regulation D.

1. Which type of transaction constitutes an unlimited withdrawal for a savings account under Reg D? A. Automatic transfers B. Transfers to pay the customer's loan at the same institution C. Online banking transactions D. Third-party checks ID:C124DD019A3842A686B09975FE81032E

A. B is incorrect because debit cards can be linked to MMDA's for POS access. C is incorrect because while she can write six third-party checks, the two POS purchases are also counted as third-party transactions. D is incorrect because the checks and the POS purchases are third-party transactions that are restricted to six withdrawals per month.

10. Carmen has just received the statement for her money market deposit account. The statement shows five third-party checks and three POS purchases. Is Carmen in compliance with Regulation D? A. No, both checks and POS transactions are third-party transactions which are limited to six per month or statement cycle B. No, POS transactions are not permitted from MMDA accounts C. Yes, she is under the six withdrawal limit D. Yes, she can write six checks per month ID:58851B6160AA48D6B726C4DCEC2B79C5

A. B, C, and D are incorrect because only demand deposit accounts and NOW accounts are currently included in the reserve requirement calculation.

10. Which combination of two account types is currently included in the reserve requirement calculation? A. Demand deposit and NOW accounts B. Time deposit and NOW accounts C. Time deposit and savings accounts D. Demand deposit and savings deposit accounts ID:8D8E5D9D3DD4408FAE107A5BA46CB0CB

C. A is incorrect because MMDAs are not included in the demand deposit group. B is incorrect because a passbook account is a savings account. D is incorrect because time deposits would only be included in the demand deposit group if they have not been renewed and do not automatically renew.

2. Checking accounts are just one of the demand deposits defined in Regulation D. What is another account type or item listed in the demand deposit group? A. Money market deposit accounts B. Passbook accounts C. Certified checks D. Time deposits that automatically renew ID:912DD776FB974380857A2A4289EEDF14

B. A is incorrect because time deposits would only be included in the demand deposit group if they have not been renewed and do not automatically renew. C is incorrect because MMDAs are not included in the demand deposit group. D is incorrect because a passbook account is a savings account.

2. Regulation D provides definitions for accounts that appear in the demand deposit group list. What is another account type or item, other than checking accounts, defined in that list? A. Time deposits that automatically renew B. Money orders that are an obligation of the bank C. Money market deposit accounts D. Passbook accounts ID:E2B71A17AB5D4657824CF735508D31C1

A. B, C, and D are incorrect because these account types are not currently included in the reserve requirement calculation.

2. Regulation D requires banks to set aside reserve funds with the Federal Reserve Bank. Which account type has savings account requirements such as the need for advance notice of withdrawal, but is currently used in the reserve requirement calculation? A. NOW account B. MMDA C. Savings deposit account D. Time deposit account ID:980D2011EB8B4608AD1A864BFCE656F9

A. B, C, and D are incorrect because these entities are ineligible to open NOW accounts.

3. Regulation D is very specific about individuals and entities that can open NOW accounts. Which option correctly lists entities that are eligible to open NOW accounts? A. Individuals, regardless of purpose, including deposits used by a sole proprietor doing business under a trade name B. Crop financing organizations, farmers' cooperatives, and other marketing cooperatives C. Organizations operated for profit, including any partnership, corporation, or limited liability company D. Agencies and embassies of a foreign government ID:5F058653165C43E3A3DBC15D5FDEA574

D. A, B, and C are incorrect because these entities are ineligible to open NOW accounts.

3. Which option correctly lists entities that are eligible to open a NOW account? A. Crop financing organizations, farmers' cooperatives, and other marketing cooperatives B. Organizations operated for profit, including any partnership, corporation, or limited liability company C. Agencies and embassies of a foreign government D. Individuals, regardless of purpose, including deposits used by a sole proprietor doing business under a trade name ID:B4B4D9D12893472BA9E52962DEB04BA5

C. A, B, and D are incorrect because this is considered a preauthorized transaction under Regulation D and limited to six per month or statement cycle.

4. Joe asked his bank to link his MMDA to his checking account for overdraft protection. Assuming that Joe has no other third-party transactions, how many times can Joe be overdrawn during one statement period before the bank may no longer transfer funds to cover his overdrafts? A. One B. Three C. Six D. Unlimited as long as Joe has enough money in the MMDA ID:06E4CAAE68574435B241A336D5BBB580

C. A is incorrect because the transfer of funds to pay the customer's own loan at the same financial institution is unlimited under Regulation D. B is incorrect because there is nothing under Regulation D requiring written requests. D is incorrect because Regulation D does not require in-person transfers.

4. Michael called the bank three days before the end of his statement cycle. He requested a $500 transfer from his MMDA to pay his Home Equity Line of Credit at the same bank. Michael has already written four checks and has two preauthorized ACH transactions. Can the bank make this transfer for Michael? A. No, because this will exceed his six per month transaction limit under Regulation D B. No, because telephone transactions are not permitted under Regulation D; the request must be in writing C. Yes, because the transfer of funds to pay the customer's own loan at the same financial institution is an unlimited transaction under Regulation D D. No, Michael must come to the bank in person to make the transfer ID:0F0F28BC440C4A5F8801896B8C8CC049

C. A is incorrect because the transfer of funds to pay the customer's own loan at the same financial institution is unlimited under Regulation D. B is incorrect because there is nothing under Regulation D requiring written requests. D is incorrect because Regulation D does not require in-person transfers.

4. On the 25th of this month, Tim called your bank requesting a $500 transfer from his MMDA to pay his Home Equity Line of Credit (at your bank). Tim has already written four checks and has two preauthorized ACH transactions. Can the bank make this transfer for Tim? A. No, because this will exceed his six per month transaction limit under Regulation D B. No, because telephone transactions are not permitted under Regulation D; the request must be in writing C. Yes, because the transfer of funds to pay the customer's own loan at the same financial institution is an unlimited transaction under Regulation D D. No, Tim must come to the bank in person to make the transfer ID:03000A31F8414E858B85225F7ED19162

B. A, C, and D are incorrect because Regulation D closely restricts the number of withdrawals.

4. Trisha is unhappy with her current account. She would like to switch to an account that would allow her to earn interest and write an unlimited number of checks per month. Which account would probably work best for Trisha? A. Passbook savings account B. NOW account C. Time deposit account D. Savings account ID:F934C2F8A2424D719634AC39F2A843FE

C. A is incorrect because the checks and the POS purchases are third-party transactions that are restricted to six withdrawals per month. B is incorrect because while he can write six third-party checks the six POS purchases are also counted as third-party transactions. D is incorrect because debit cards can be linked to MMDA's for POS access.

5. Bob has a money market deposit account with your bank. This statement cycle he has written two third-party checks and made six POS purchases. Is Bob in compliance with Regulation D? A. Yes, he is under the six withdrawal limit B. Yes, he can write up to six checks per month C. No, both checks and POS transactions are third-party transactions limited to 6 per month or statement cycle D. No, POS transactions are not permitted from MMDA accounts ID:D7BC39AC0663428EBC4AA4530456786B

D. A and B are incorrect because this check is a third-party transaction being deposited to another bank. C is incorrect because limiting transactions from a savings account is a regulatory requirement, not a punishment.

5. Don wrote an MMDA check payable to himself and deposited it into his account at another bank. Don has already had six ACH transactions post to his MMDA this month. When this check clears your bank, will it count as one of Don's limited transactions under Regulation D? A. No, because the check is payable to himself B. No, because the check is being deposited into his own account C. Yes, because customers should be penalized for banking elsewhere D. Yes. Although the check is payable to himself, it is still a third-party transaction when it is deposited to another bank ID:09515CBE18D64AAE94975E9674AFEFAC

C. A, B, and D are incorrect because these account types are not currently included in the reserve requirement calculation.

5. The Federal Reserve Bank holds funds for banks as part of the reserve requirement in Regulation D. Which type of account has savings account requirements such as the need for advance notice of withdrawal, but is currently used in the reserve requirement calculation? A. Savings club account B. Savings deposit account C. NOW account D. Time deposit account ID:143CA9974EC040EBA517248FA7EB8944

D. A is incorrect because the checks and the POS purchases are third-party transactions that are restricted to six withdrawals per month. B is incorrect because while she can write six third-party checks, the two POS purchases are also counted as third-party transactions. C is incorrect because debit cards can be linked to MMDA's for POS access.

6. Cheryl has written five third-party checks and made two POS purchases from her money market deposit account in this statement cycle. Is Cheryl in compliance with Regulation D? A. Yes, she is under the six withdrawal limit B. Yes, she can write six checks per month C. No, POS transactions are not permitted from MMDA accounts D. No, both checks and POS transactions are third-party transactions that are limited to six per month or statement cycle ID:26A2DA8B2855449A84C61125DEC6181F

C. A, B, and D are incorrect because this is considered a preauthorized transaction under Regulation D and limited to six per month or statement cycle.

6. Last month, Mrs. Montgomery asked her bank to link her MMDA to her checking account for overdraft protection. Assuming that Mrs. Montgomery has no other third-party transactions, how many times can she be overdrawn during one statement period before the bank may no longer transfer funds to cover her overdrafts? A. One B. Three C. Six D. Unlimited as long as Mrs. Montgomery has enough money in the MMDA ID:1946E51BFB034917ADA192D9924D0288

C. A, B, and D are incorrect because Regulation D closely restricts the number of withdrawals.

6. Mark would like to open an account that would allow him to earn interest and write an unlimited number of checks per month. Which account would probably work best for Mark? A. Passbook savings account B. Time deposit account C. NOW account D. Savings account ID:9F284E5BAF1247388CDBAADE9408BBB3

C. A, B, and D are incorrect because the number of transactions allowed for these transaction types is restricted by Regulation D.

6. Regulation D requirements allow unlimited withdrawals and transfers from a savings account with which type of transaction? A. Automatic transfers B. Third-party checks C. In person at a branch D. Online banking transactions ID:AFA66C14E26C44DFB2A8C686066715C8

B. A, C, and D are incorrect because the number of transactions allowed for these transaction types is restricted by Regulation D.

6. Unlimited withdrawals and transfers from savings accounts may be made using which type of transaction? A. Third-party checks B. In person withdrawals at a branch C. Automatic transfers D. Online banking transactions ID:2C4D2F55FFF742A9BF193FC8CC087AF1

D. A, B, and C are incorrect because these account types are not currently included in the reserve requirement calculation.

6. Which type of account has savings account requirements such as the need for advance notice of withdrawal, but is currently used in the reserve requirement calculation? A. Savings deposit account B. Time deposit account C. Statement savings account D. NOW account ID:98228C9DF3D04288B9E9F880CA30D141

A. B and C are incorrect because this check is being deposited to another bank and therefore a third-party transaction. D is incorrect because limiting transactions from a savings account is a regulatory requirement, not a punishment.

7. Mara wrote an MMDA check payable to herself and deposited it into her account at another bank. Mara has already had six ACH transactions post to her MMDA this month. If your bank charges a fee for excess transactions, would this check count as one of Mara's limited transactions under Regulation D and therefore assess a fee against Mara's account? A. Yes. Although the check is payable to herself, it is still a third-party transaction when it is deposited to another bank B. No, because Mara made the check payable to herself C. No, because the check is being deposited into her own account D. Yes, because customers should be penalized for banking elsewhere ID:321CFC5BCDEF4E43BA0850314BA5BDC1

A. B is incorrect because MMDAs are not included in the demand deposit group. C is incorrect because a passbook account is a savings account. D is incorrect because time deposits would only be included in the demand deposit group if they have not been renewed and do not automatically renew.

7. Within Regulation D you can find a list that defines the items and accounts considered demand deposits. Checking accounts are just one of the items defined in the list. What is another item listed in the demand deposit group? A. Money orders that are an obligation of the bank B. Money market deposit account C. Time deposits that automatically renew D. Passbook accounts ID:6B8A13E7798847F787D6DDFC793E5594

C. A is incorrect because the transfer of funds to pay the customer's own loan at the same financial institution is unlimited under Regulation D. B is incorrect because there is nothing under Regulation D requiring written requests. D is incorrect because Regulation D does not require in-person transfers.

8. Megan called the bank on the 23rd of the month and asked the bank to transfer $500 from her MMDA to pay her Home Equity Line of Credit at the same bank. Megan has already written four checks and has two preauthorized ACH transactions. Can the bank make this transfer for Megan? A. No, because this will exceed her six per month transaction limit under Regulation D B. No, because telephone transactions are not permitted under Regulation D; the request must be in writing C. Yes, because the transfer of funds to pay the customer's own loan at the same financial institution is an unlimited transaction under Regulation D D. No, Megan must come to the bank in person to make the transfer ID:21A78DE3BA664D94927C304A6429C2C8

C. A and B are incorrect because this check is a being deposited to another bank and therefore is a third-party transaction. D is incorrect because limiting transactions from a savings account is a regulatory requirement, not a punishment.

9. Assume that your customer writes an MMDA check payable to herself and deposits it into her account at another bank. She has already had six ACH transactions post to her MMDA this month. When this check clears your bank, will it count as one other limited transaction under Regulation D? A. No, because the check is payable to herself B. No, because the check is being deposited into her own account C. Yes. Although the check is payable to herself, it is still a third-party transaction when it is deposited to another bank D. Yes, because customers should be penalized for banking elsewhere ID:3D09F5DF6DFE468A850A1C084500190B

C. A, B, and D are incorrect because these entities are not eligible to open NOW accounts.

9. NOW accounts can only be opened by individuals and entities specified in Regulation D. Which option correctly lists entities that are eligible to open NOW accounts? A. Agencies and embassies of a foreign government B. Crop financing organizations, farmers' cooperatives, and other marketing cooperatives C. Individuals, regardless of purpose, including deposits used by a sole proprietor doing business under a trade name D. Organizations operated for profit, including any partnership, corporation, or limited liability company ID:021F413CB1E241C98DF5FAA582E3CB8A

C. A, B, and D are incorrect because only demand deposit accounts and NOW accounts are currently included in the reserve requirement calculation.

9. Reserve requirement calculations currently include two account types. Which option lists those two account types? A. Time deposit and savings accounts B. Demand deposit and savings deposit accounts C. Demand deposit and NOW accounts D. Time deposit and NOW accounts ID:294D18A55EC84061A18815D6ACB5FF9A

C. A, B, and D are incorrect because this is considered a preauthorized transaction under Regulation D and limited to six per month or statement cycle.

9. Riley asked his bank to link his MMDA to his checking account for overdraft protection. Assuming Riley has no other third-party transactions, how many times can he be overdrawn during one statement period before the bank may no longer transfer funds to cover his overdrafts? A. One B. Three C. Six D. Unlimited as long as Riley has enough money in the MMDA ID:B5C3FC8032BB4CFD8BD4753F9CDBFE4C