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Banker Tells Me Federal Reserve IS Government, Mentions 9/11

Background: I opened a new account with my bank to receive payments from PayPal and Google Checkout that I have linked to my online store where I sell items. I wanted all the incoming money to go to one place because I was going to set aside all the money I made online for a purchase this spring. As a result I picked a savings account and linked up our online payment accounts and started receiving money. Yesterday I noticed a $10 service charge on my account and called to ask about it. The representative couldn't figure out why and neither could anyone else in the branch.
When she finally called back I was told that there is a FEDERAL REGULATION that says I cannot do more than 6 electronic transactions on a savings account in a month This includes incoming ACH deposits!

I was shocked, and told my representative on the phone that I would simply change the way I did business with that account and not withdraw into it every day. I then asked if they could waive the $10 fee as I was not aware of this and would correct it. I was told that I should have been aware as it was in my disclosure packet and that there was nothing she could do. I reminded her that she was expecting me to be aware of something that she had not even been aware of - but she still said there was nothing she could do. I told her I had been a customer way too long to be treated this poorly and I informed her that I would be there within 2 hours to close all my accounts and hung up on her.
About 10 minutes later I got a call back and received a voicemail apologizing several times and saying she would reverse the $10 fee

This morning I woke up and several more electronic deposits had went to my savings account that had been pending from the weekend. And of course, now I was being charged $10 each.
My bank had collected $50 in fees simply because of this mysterious "Federal Regulation" that they spoke of

So I decided to go into the branch and my plan was to either get it resolved - or simply close all three of my accounts. Because of how quickly they quoted 'Federal Regulation' I took my pocket recorder with me because I had a feeling the conversation would take the route it did..

..and before it was over I had the BRANCH MANAGER tell me the FEDERAL RESERVE is part of the FEDERAL GOVERNMENT (ABSOLUTELY NOT TRUE!) and then later also elude to the fact that the reason a lot of our freedoms have been taken away was a result of 9/11...imagine that


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It IS part of the federal govrnment.

But it also ISN'T!

The argument about whether or not it is, or isn't is academic, except for the fact that the ambiguity is part of the problem, because ambiguity breeds lack of accountability; and lack of accountability creates corruption.

But even if it were, or weren't part of the government, having a central bank lender of last resort is still totally not OK.

it really isnt...

since the congress did not have the authority to delegate the authority of coining currency to an outside institution , especially not a private bank. the creation of the federal reserve is in direct conflict with the Constitution, therefore the existence of the federal reserve in reality not legitimate.

remember just because congress passes a law doesn't mean it is legal. the judiciary is supposed to perform the litmus test against the constitution. Furthermore just because judiciary also failed and calls some legislation to be constitutional does not mean it truly is.

Good for you

I'm glad they didn't keep your money.Do you ever wonder how it got so bad?

When I bought my house, I needed $5,000.00 down. I had the money, but I was told I couldn't use it because it wasn't in a bank account and so I had to prove it wasn't from some illegal activity. I had to have a friend sign a statement that it was a gift in order to close on the house. Even 5000 measly FRN's are jealously watched by the overlords who don't want honest people to own anything or be able to save anything without their knowledge and participation in their fractional reserve Ponzi scheme!

Many bankers believe our

Many bankers believe our money is actually backed by gold. Don't believe me ask your teller next time you are at the bank.


Still researching

So far I have not found the text of Regulation D that discusses this limit.

I have found many banks claiming it is a federal regulation, blah blah blah.

It is very clearly a Federal Reserve Regulation, which makes me wonder why Credit Unions enforce this rule on their customers.

The Federal Reserve does not supervise or regulate credit unions. Federally chartered credit unions are regulated by the National Credit Union Administration, while state-chartered credit unions are regulated at the state level.

A google of "regulation D credit union" finds plenty of credit union statements concerning their compliance with the regulation.

Many references to Reg D mention it is to insure compliance with reserve requirements. These reserve requirements were eliminated with the passage of TARP. I posted a large detailed analysis of this back when TARP was still being debated.

In a nutshell, they changed the date of the elimination of the requirement, which was a couple of years away, to be effective on the passge of TARP.

So, as of right now, and I'm still looking, it appears to me there are several issues.

1. Credit Unions should not have to comply.

2. The reserve requirement that was the basis for the rule no longer exists.

3. I have yet to find the actual text of the regulation. It should be here http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=635... but I have not found it yet.

I'll let you know whay I find as I keep looking.

Just got off of the phone with the Fed

Sorry if this gets long, but it has a lot of info in it.

Okay, I called and talked to a person at the Fed.

She acknowledged that Credit Unions are not a part of the Federal Reserve system, but must comply with Fed regulations because they are Federal Law.

I asked if she meant to say that the Regulation D was passed by an act of congress. She said yes.

She finally found what she claimed was the Regulation D rule in § 204.133 Multiple savings deposits treated as a transaction account.

When I read it, it was not the enabling regulation, but a section discussing how multiple savings accounts for same depositor are effected by the rule. It did however reference the enabling regulation.

(d)(1) Savings deposit means a deposit or account with respect to which the depositor is not required by the deposit contract but may at any time be required by the depository institution to give written notice of an intended withdrawal not less than seven days before withdrawal is made, and that is not payable on a specified date or at the expiration of a specified time after the date of deposit. The term savings deposit includes a regular share account at a credit union and a regular account at a savings and loan association.

(2) The term savings deposit also means: A deposit or account, such as an account commonly known as a passbook savings account, a statement savings account, or as a money market deposit account ( MMDA ), that otherwise meets the requirements of §204.2(d)(1) and from which, under the terms of the deposit contract or by practice of the depository institution, the depositor is permitted or authorized to make no more than six transfers and withdrawals, or a combination of such transfers and withdrawals, per calendar month or statement cycle (or similar period) of at least four weeks, to another account (including a transaction account) of the depositor at the same institution or to a third party by means of a preauthorized or automatic transfer, or telephonic (including data transmission) agreement, order or instruction, and no more than three of the six such transfers may be made by check, draft, debit card, or similar order made by the depositor and payable to third parties. A preauthorized transfer includes any arrangement by the depository institution to pay a third party from the account of a depositor upon written or oral instruction (including an order received through an automated clearing house (ACH)) or any arrangement by a depository institution to pay a third party from the account of the depositor at a predetermined time or on a fixed schedule. Such an account is not a transaction account by virtue of an arrangement that permits transfers for the purpose of repaying loans and associated expenses at the same depository institution (as originator or servicer) or that permits transfers of funds from this account to another account of the same depositor at the same institution or permits withdrawals (payments directly to the depositor) from the account when such transfers or withdrawals are made by mail, messenger, automated teller machine, or in person or when such withdrawals are made by telephone (via check mailed to the depositor) regardless of the number of such transfers or withdrawals.4

4 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.

For customers who continue to violate those limits after they have been contacted by the depository institution, the depository institution must either close the account and place the funds in another account that the depositor is eligible to maintain, or take away the transfer and draft capacities of the account.

An account that authorizes withdrawals or transfers in excess of the permitted number is a transaction account regardless of whether the authorized number of transactions are actually made. For accounts described in paragraph (d)(2) of this section, the institution at its option may use, on a consistent basis, either the date on the check, draft, or similar item, or the date the item is paid in applying the limits imposed by that section.

(3) A deposit may continue to be classified as a savings deposit even if the depository institution exercises its right to require notice of withdrawal.

(4) Savings deposit does not include funds deposited to the credit of the depository institution's own trust department where the funds involved are utilized to cover checks or drafts. Such funds are transaction accounts.

Okay, now I found the regulation, but when I looked at the bottom of the section, the amendments were listed as:

[Reg. D, 45 FR 56018, Aug. 22, 1980, as amended at 46 FR 27092, May 18, 1981; 46 FR 32428, June 23, 1981; 47 FR 44707, Oct. 12, 1982; 48 FR 28973, June 24, 1983; 51 FR 9632, 9635, Mar. 20, 1986; 52 FR 47694, 47695, Dec. 16, 1987; 55 FR 50541, Dec. 7, 1990; 56 FR 15494, Apr. 17, 1991; 57 FR 38427, Aug. 25, 1992; 57 FR 40598, Sept. 4, 1992; 61 FR 69025, Dec. 31, 1996; 63 FR 64841, Nov. 24, 1998]

So the last amendment, which may not have had anything to do with the savings transaction limit, was 1998. Well before 9/11/2001.

I asked again if if I could assume that the congressional act creating the transaction limit must have been approved on one of those amendment dates. I was told I would need to have an examiner answer that question, and the one she would ask was gone for the day.

When I got into the basis for the rule in the first place, the need to maintain reserves, and that requirement had been removed by the TARP, again that was a question for an examiner.

So in a nutshell, so far I have found that Congress decided to create a definition of a savings account, and the definition was based on the number of transaction the account could have before they called it some other kind of account.

I have found no evidence this has anything to do with 9/11, and in fact was probably some arbitrary number that seemed reasonable before the internet allowed widespread electronic transaction by the general public.

It appears that the fees are imposed by the bank, not any fed requirement. The bank sets the rules for number of transactions, not the fed. It also appears that you should be able to move money around between your accounts at the same bank without penalty in every way except online banking, which seems goofy to me.

It also appears to apply only to money leaving the account, not going in. I see nothing in Regulation D that would restrict the number of deposits into a savings account. You should not have been charged fees for deposits.

More to come as I find out more information...

Then the bank collects the fees

If the money was going to the Federal Reserve and it was on the record you made those transactions, then during accounting it would show that the bank was short $50. But if the bank ultimately keeps the money, then they have the power to give it back or not. So the law is probably one of those things that just says the bank can charge you if it wants too, and so they can write it into their fine print.

Savings accounts are not considered "demand deposits"

Sounds like you need a checking account for the purposes you are using it for.


My liberty-minded home base of thought:



Freedom - Peace - Prosperity

the struggle

Say what is true, or what gets me through this moment with the least pain....

Truth exists, and it deserves to be cherished.

Regulation D - limits transactions in Savings Accounts

I've been through the same thing. My bank sends me a notice.

Regulation D is a government regulation that Congress (I believe) imposed "to encourage savings" by limiting the number of transactions into and out of savings accounts. AGGGHHHHH!

The idea was to make sure a savings account is not used frequently like a checking account. Of course the "unintended" consquence is that those of us who like to autodeposit money into it, and transfer money in smaller amounts to checking, etc. so that money stays in the savings account the maximum amount of time, are actually discouraged from using the account.

I was able to negotiate away my penalties the first time it happened. Be nice to them, but realize that it is a regulation they'd rather not have, either.

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Them stealing

your money will keep us safe from terrorist!

I bank with Navy Federal

Credit Union and they've always been very responsive. However, I do know about this rule. Whenever I transfer money online in/out of my savings account, a window comes up and tells me how many I have done in the month. I think if this had been going into a checking account you wouldn't have this problem.

Sad to hear

but wait til the gubment fully nationalizes all the banks. Then you won't have any choice in the matter.

The time to go on strike is coming rapidly.

I worked at Regions Bank for about 5 years

after I got out of college, ( till one day I couldn't take it anymore and never went back, didn't quit, didn't get fired, just never went back), and I remember when this started, it was about 2002 I think when it started, we had a bunch of folks close out savings accounts, if i remember correctly it even applied to kids accounts.

Like if a it was set up for child support transfers, or SSI to go into a kids savings account if it was more than 6 a quarter then they got charged.

Lots of old folks got their accounts drained down because of this. This was supposed to be something to help stop terrorist & drug dealers from transferring money. I think the real reason was to take away folks savings so as to make them more receptive to being controlled by the government.

Thank you Dr. Paul for making me act on what I already knew was right.

*May the only ones to touch your junk, be the ones you want to touch your junk.*

They were blowing smoke up your butt ...

Get an online account with ing.

One of the new business models for banks is to significantly raise revenue through fees.

Close your accounts and take them to small claims ...

And make sure you alert the media. They love this stuff ...

You did all the work for them.


Join a Credit Union... That's the way to go!

"All great truths begin as blasphemies."

"Human beings with love and compassion are some of the most beautiful creatures in the universe... Those without are a plague on us all."

good comment Rhino

ING.....small claims court.....media.....


LL on Twitter: http://twitter.com/LibertyPoet
sometimes LL can suck & sometimes LL rocks!
Love won! Deliverance from Tyranny is on the way! Col. 2:13-15


That's a little scary.

In an effort to help you with your core problem (bank w/ poor service), allow me to recommend ING Direct.

They offer no minimum savings and checking accounts, both of which are interest bearing. I think they're both in the 2% range. But, the big bonus for me, is their service is AMAZING. Every time I've ever called, I get a real person picks up the phone in just a few rings. I can easily understand him/her and they are very knowledgeable. I've been a customer with them for a couple of years now and don't have a single complaint. You might check them out as an alternative to your current bank.

No, I don't work for ING, but I tell people about them every chance I get cause I'm so happy with them.

EDIT: To avoid any question over numbers of transactions and such, I'd probably look closest at the checking account.

I was "banned" from ING

I took them up on their free $25 offer, added $1 as my initial deposit, let it sit there to collect interest. After a year or so they transferred it back to my regular account and sent me a letter saying basically "they don't need customers like me"! I've re-applied using the mailers they keep sending me and they refuse to take my money.

p.s. PayPal offers a money market account option you could use.

or a credit union

as one of the threads talked about yesterday. I think it was from an article on Lew Rockwell.

"The credit expansion boom is built on the sands of banknotes and deposits. It must collapse.", www.mises.org

"Endless money forms the sinews of war." - Cicero, www.freedomshift.blogspot.com

Thanks for the heads up.

I'm going to be setting up an account for online receipts too and prefer not to have that little surprise.

New Hampshire and Ecuador.