I understand that there is this "Reg D" thing that limits my ability to move money between accounts to six transfers per month, but I don't understand the purpose of it. What threat to the banking foundation of the US is avoided if I make a transfer at an ATM or in person, but exists if I do it over the phone or on-line?
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Money market deposit accounts were created by an Act of Congress back in 1982. At the time, banks were limited on the rate of interest they could pay on most depositaccounts, but interest rates in general were extremely high. Banks lobbied Congress to authorize banks to compete with money market funds, which paid comparatively high yields at the time and some of which allowed limited check writing.
The shape of money market deposit accounts was decided in a series of compromises between banks and the Federal Reserve System, which was concerned that paying competitive interest rates on unlimited transaction checking accounts would limit the Fed's ability to influence interest rates and the money supply. The money market account has been described as something created by committee.
Congress has shown great reluctance to lift the limit on transactions on savings and money market deposit accounts. No one sees those limits going away anytime soon.
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