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November 1, 1996

Ms. Dina Twing
Regulatory Compliance Supervisor
Electronic Data Systems
5400 Legacy Drive
Plano, TX 75024

Dear Ms. Twing:

This is in response to your letter of September 24, 1996, seeking further information regarding limitations on the number of transfers and withdrawals from savings accounts. In particular, you are inquiring about the limitations on payments from a savings account to a third party made pursuant to instructions given telephonically (including home computer instructions) or given through an ATM. This letter incorporates by reference our letter dated September 4, 1996.

If instructions are given to a depository institution over the telephone (including instructions from a personal computer under a home banking arrangement) to pay a third party directly from a savings account, the six transaction limit applies. Moreover, if the instructions involve a transfer to the customer's transaction account followed by a transfer from the transaction account to a third party, the six transaction limit also applies.

If the customer instructs the depository institution via an ATM to pay a third party directly from the savings account, that transaction falls under the six transaction limit. However, if the customer instructs the depository institution via an ATM to transfer funds from the savings account to the customer's transaction account at the same institution, the transfer does not count against either the three or the six transaction limits.

You also inquired about the applicable limit where the customer's instructions to pay a third party are given to a vendor not associated with the depository institution, such as Checkfree. This question cannot be answered definitively based on the information that you have provided as the answer depends on the arrangements between the third party and the depository institution holding the customer's account. However, assuming that your concern is whether instructions from a third party, such as Checkfree, to the depository institution are subject to the three transaction limit or the six transaction limit, the answer is that they are subject to the three transaction limit.

I hope this information is helpful. Further questions may be referred to Rick Heyke of my staff (202/452-3688) or to me.

Very truly yours,

(signed) Oliver Ireland

Oliver Ireland

Associate General Counsel

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