FDIC COVID Consumer 33 – Cash Withdrawals. What are the consumer compliance implications if a bank wants to limit customers’ cash withdrawals?

Compliance > COVID & Pandemic-Related
Q:   Cash Withdrawals. What are the consumer compliance implications if a bank wants to limit customers’ cash withdrawals?
 
A:   For consumer accounts, transaction limits must be properly disclosed in advance in accordance with applicable Regulation DD (Truth in Savings) and/or Regulation E (Electronic Fund Transfers) requirements. For example, Regulation DD requires account disclosures to state any limitations on the number or dollar amount of withdrawals. If a bank intends to institute limits that were not previously disclosed, banks must provide customers with a change in terms notice with the new limitations 30 days prior to implementation. Similarly, new limits on electronic funds transfers would need to be properly disclosed. There are some exceptions for special circumstances. Financial institutions may call their FDIC Regional Office if they have questions about whether the rules for special circumstances apply.

If banks are encountering customers who are worried about the COVID-19 emergency and, as a result, want to withdraw large sums of cash and keep it in their possession, it may be helpful to remind them of the following:

• The Federal Reserve System has and will continue to meet the currency needs of banking customers. Sufficient resources are available to handle customer needs.
• Consumers are encouraged to continue to conduct transactions as they normally would. Credit and debit cards and other payment systems will continue to operate as normal.
• The FDIC has stated that the safest place for customers’ money is deposited at an FDIC insured bank.
• Banks will continue to ensure that their customers have access to funds either directly or electronically. Since 1933, no depositor has ever lost a penny of FDIC insured funds.
 
 
This Q&A was contained in the Frequently Asked Questions for Financial Institutions Affected by the Coronavirus Disease 2019 (Referred to as COVID-19) – As of March 3, 2021 (which may be updated from time to time).  This may be found on the FDIC’s website here:  https://www.fdic.gov/Coronavirus/faq-fi.pdf.
 

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