ProvidentNJ Direct is a new internet division of The Provident Bank of New Jersey. It attracted many customers in the last few months with its 3-month promo that had rates as high as 3.25% APY (see account review). With the 3-month promo ending for many customers and with a current standard rate of only 1.50% APY, many readers have questioned whether this was a strategy to reduce withdrawals rather than to improve security. Before this change, a reader reported that he was able to push over $100K out of Provident to his other bank account using Provident's own transfer service.
It appears that the limit does not apply to external transfers initiated from your other bank. So you should still be able to pull funds without limit using another bank's ACH system. Please leave a comment if this isn't the case.
External Transfer Security
It seems to me there are many ways to improve security without imposing such a drastic transfer limit. First, I would be more concerned about ACH withdrawals initiated from the outside. An unauthorized withdrawal using Provident's own ACH service would require a criminal to not only log in, but to also create a link to another account. If unauthorized withdrawals are the main concern, the bank could implement ways to ensure links are legitimate. For example, Ally Bank emails you when you add a link to another bank account. ING Direct requires you to answer verification questions before it initiates adding a link, and ETrade sends an activation code to your email address. So there are many ways to improve security that does not require a restrictive transfer policy.