What are Banking Regulations?
Banking regulations are a form of government regulation that subjects banks to certain requirements, restrictions, and guidelines. In general, banking regulations seek to uphold the soundness and integrity of the financial system. Following is a list of banking regulations: The most common objectives are:
- Prudential – to reduce the level of risk bank creditors are exposed to (i.e. to protect depositors)
- Systemic risk reduction – to reduce the risk of disruption resulting from adverse trading conditions for banks causing multiple or major bank failures
- Avoid the misuse of banks – to reduce the risk of banks being used for criminal purposes (e.g. laundering the proceeds of crime)
- To protect banking confidentiality
- Credit allocation – to direct credit to favored sectors
List of Banking Regulations
- Regulation A – Relates to extensions of credit by Federal Reserve Banks to depository institutions and others. Reg A establishes rules under which Federal Reserve Banks may extend credit to depository institutions and others.
- Regulation B – prohibits creditor practices that discriminate on the basis of race, color, religion, national origin, sex, marital status, or age (provided the applicant has the capacity to contract); to the fact that all or part of the applicant’s income derives from a public assistance program; or to the fact that the applicant has in good faith exercised any right under the Consumer Credit Protection Act.
- Also, Reg B requires creditors to notify applicants of actions taken on their applications; to report credit history in the names of both spouses on an account; to retain records of credit applications; to collect information about the applicant’s race and other personal characteristics in applications for certain dwelling-related loans, and to provide applicants with copies of appraisal reports used in connection with credit transactions.
- Regulation C – This one implements the Home Mortgage Disclosure Act. It is intended to provide the public with loan data that can be used to help determine whether financial institutions are serving the housing needs of their communities. Also, it intends to assist public officials in distributing public-sector investments so as to attract private investment to areas where it is needed. And it attempts to assist in identifying possible discriminatory lending patterns and enforcing anti-discrimination statutes. Plus, it requires certain lenders to complete Loan Application Registers to track home purchase loans, home improvement loans, and refinancing.
- Regulation D This regulation relates to reserves that depository institutions are required to maintain. It also provides guidance on NOW account eligibility, MMDA and savings account transfer restrictions, and early withdrawal penalties. Regulation E This regulation protects individual consumers engaging in electronic fund transfers and carries out the purposes of the Electronic Fund Transfer Act, which establishes the basic rights, liabilities, and responsibilities of EFT consumers of financial institutions that offer these services.
- Regulation F – Designed to limit the risks that the failure of a depository institution would pose to other insured depository institutions. Provides requirements relating to interbank liabilities.
- Regulation G – Disclosure and Reporting of CRA-Related Agreements
- Regulation H – Provides guidance on a variety of matters relating to state-chartered member banks, from real estate lending standards to standards for safety and soundness.
- Regulation I – Implements the provisions of the Federal Reserve Act relating to the issuance and cancellation of Federal Reserve Bank stock upon becoming or ceasing to be a member bank, or upon changes in the capital and surplus of a member bank, of the Federal Reserve System.
- Regulation J – Governs the collection of checks and other cash and non-cash items and the handling of returned checks by Federal Reserve Banks and provides rules for collecting and returning items and settling balances.
- Regulation K – Sets out rules governing the international and foreign activities of U.S. banking organizations, including procedures for establishing foreign branches and Edge corporations to engage in international banking and for investments in foreign organizations.
- Regulation L – This reg implements the Depository Institution Management Interlocks Act to foster competition by generally prohibiting a management official from serving two non-affiliated depository organizations in situations where the management interlock likely would have an anti-competitive effect.
- Regulation M – Implements the consumer leasing provisions of the Truth in Lending Act.
- Regulation N – Governs relationships and transactions between Federal Reserve Banks and foreign banks or bankers or groups of foreign banks, or bankers, or a foreign state.
- Regulation O – This regulation governs extensions of credit to insiders, which includes directors, executive officers, and principal shareholders of a bank and its affiliates. It includes special restrictions on loans to executive officers.
- Regulation P – Requires a financial institution to provide notice to customers about its privacy policies and practices; describes the conditions under which a financial institution may disclose nonpublic personal information about consumers to non-affiliated third parties; and provides a method for consumers to prevent a financial institution from disclosing that information to most non-affiliated third parties by “opting out” of that disclosure.
- Regulation Q – provides guidelines and restrictions relating to interest on deposits and advertising.
- Regulation R was repealed effective December 6, 1996. Previously, it dealt with interlocking relationships between securities dealers and banks.
- Regulation S establishes the rates and conditions for reimbursement of reasonably necessary costs directly incurred by financial institutions in assembling or providing customer financial records to a government authority pursuant to the Right to Financial Privacy Act.
- Regulation T regulates extensions of credit by brokers and dealers. It imposes, among other obligations, initial margin requirements and payment rules on certain securities transactions.
- Regulation U This regulation imposes credit restrictions upon persons other than brokers or dealers that extend credit for the purpose of buying or carrying margin stock if the credit is secured directly or indirectly by margin stock.
- Regulation V – Implements portions of the Fair Credit Reporting Act (FCRA). Includes model notices that can be used to notify customers either before or immediately following the delivery of negative information.
- Regulation W This regulation implements Sections 23A and 23B of the Federal Reserve Act which governs most transactions between banks and their affiliates. The term “banks” includes all national banks, as well as insured state member and nonmember banks and, for certain purposes, US branches and agencies of foreign banks.
- Regulation Y – Regulates the acquisition of control of banks by companies and individuals; defines and regulates the non-banking activities in which bank holding companies and foreign banking organizations with United States operations may engage; and sets forth the procedures for securing approval for these transactions and activities.
- Regulation Z – Designed to help consumers “comparison shop” for credit by requiring disclosures about its terms and cost. The regulation gives consumers the right to cancel certain credit transactions that involve a lien on a consumer’s principal dwelling, regulates certain credit card practices, and provides a means for fair and timely resolution of credit billing disputes. The regulation requires a maximum interest rate to be stated in variable-rate contracts secured by the consumer’s dwelling. It also imposes limitations on certain home equity and mortgages.
- Regulation AA – establishes consumer complaint procedures; defines unfair or deceptive acts or practices of banks in connection with extensions of credit to consumers. Prohibits certain practices, such as taking a non-purchase money security interest in household goods.
- Regulation BB – This regulation implements the Community Reinvestment Act.
- Regulation CC – This one contains rules regarding the duty of banks to make funds deposited into accounts available for withdrawal, including availability schedules plus rules regarding exceptions to the schedules, disclosure of funds availability policies, payment of interest, and liability. Also contains rules to expedite the collection and return of checks by banks, including the direct return of checks, the manner in which the paying bank and returning banks must return checks to the depository bank, notification of nonpayment by the paying bank, endorsement, and presentment of checks, same-day settlement for certain checks, and other matters.
- Regulation DD – This legislation implements the Truth in Savings Act to enable consumers to make informed decisions about deposit accounts at depository institutions. Requires depository institutions to provide disclosures so that consumers can make meaningful comparisons among depository institutions.
- Regulation EE – expands the FDIC Improvement Act of 1991 definition of a “financial institution” for financial market participants who avail themselves of the netting provisions of the Act regarding contracts in which the parties agree to pay or receive the net, rather than the gross, payment due.
- Regulation FF – extends the rules on obtaining and using medical information in connection with credit to creditors other than those regulated by the OCC, FRB, FDIC, OTS, and NCUA.
- HUD’s Reg X – implements the provisions of the Real Estate Settlement Procedures Act (RESPA).
See other articles related to financial investigations. If you have any questions about banking regulations. Please leave a comment below.
What is the regulatory code for when a cleared title on a property must be presented to the bank when a person is going through the loan process?
Question: Is there a federal regulation that if you have an American bank account and IRA that you must live in the US for 6 months and 1 day in order to have that account?
An attorney or a financial advisor would best answer that question. Government regulations require banks to correctly identify their customers before opening accounts. The rules for opening bank accounts and IRAs will vary by financial institution.
I have had this account for over 25 years and have paid taxes on it yearly. I have a legal address in the states but split my time between Australia and the US. I have no Australian income. With covid making travel next to impossible I have had to stay in Australia for an extended length of time. I am an American citizen, and this is my IRA, retirement funds and checking account. This is the 1st I have been informed of this and wanted to know if it’s my banking institution or the government that has the requirement about length of residence.
Hi. how long does a bank have to transfer funds when they say they will after having complied with them?
Depending on the financial institutins involved in the transfer, and the method they use for transferring the funds, it could take between a few hours and as many as five business days. However, it may take longer if the transfer is delayed, which can occur for several reasons (e.g., large amounts, errors in the request, etc.).
What is the criteria and capital required for a corporation or a group of people to own a a BANK or to build and own a bank?
Can Banker at a bank make A New Partnership agreement and not include the 3rd. partner in it, when you already have one registered with the state.
Heres an interesting one… I dont have a bank accont but my girlfriend does… after an identity theft issue, I just have a bad taste for them so I have happily been using Green Dot for all my needs. Unfortunately I recently lost my job and applied for New Jersey unemployment but they wouldnt recognize Green Dot as a viable bank to pay. So I opted for my Girlfriends account.
Lakeland Bank wants nothing to do with it and continue to push my checks back to Unemployment. Meanwhile the unemployment call center is sacked and has an automation service that explains a situation of high volume of calls and requests the next business day before hanging up. The physical offices are currently closed due to covid and The self help portal to fix the Direct Deposit (my first method of addressing this issue) has been “Temporarily out of service” for well over a month now.
My question is, can a bank legally say no to a deposit.. not a check I want cash for, but like walking in and paying cash, I’m trying to unload my unemployment to her since shes being footing the bill for my place since November when my UI was approved. this is crazy.
June of 2020 I had money deposited to me to transfer to families of some of the employies. I had never handled that much and forgot the limits for transfers. I went over 300 or 500 and they locked me down. I still have 3876.41 there because they closed the account and said I would get it in 180 weeks or 6 months. When 6 months was up they extended it again till june 2021. The money was put in my account by agreement with my fiance’s General to do the transfers for them. They are working for UN and General at base in England. After second 180 he got mad and I paid him back so the balance is mine and I want and need it. I am retired and disabled and am sick a lot. Is this action a normal or legal action?
Sorry to hear about your circumstances. We’re not able to give legal advice through this site, as we are not attorneys. However, it sounds like it is an issue you need to address with the bank that holds the account, or discuss possible legal action with an attorney.
Hello, Happy New Year. Where can I find a regulation stating that franking for scanned checks is a requirement by the banks and the security reasons?
My reply. Need help with this question.
US money in a bank in london UK. Is this taxable. The money was not met to stay in the UK. was only sent there from SA to send to the USA.
Need to find answer. Help
This question should be directed to a Certified Public Accountant. They know the tax law and should be able to answer this question.
I’m wondering about the rules that regulate how a bank can remove money from an account. I work with a small not for profit organization. We had some fraud occur on our bank account. We reported it to the bank, and sometime later, they sent a check to us for the fraud that had occurred on the account.
Then a couple months later, they removed the money from our account. I understand that they can charge fees, or charge fees if you over draw your account. But I don’t understand how they can send you a check, and then later remove the money from the account. If the check had been deposited in another bank, they could not take money from that account. Can you help me understand how a bank can just remove money from your account. This has caused our program great harm, and may destroy the not for profit.