[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2323 Introduced in House (IH)]






                                                                       
105th CONGRESS
  1st Session
                                H. R. 2323

     To allow depository institutions to offer negotiable order of 
withdrawal accounts to all businesses, to repeal the prohibition on the 
    payment of interest on demand deposits, to require the Board of 
  Governors of the Federal Reserve System to pay interest on certain 
                   reserves, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 31, 1997

  Mr. Metcalf (for himself, Mr. Lazio of New York, and Mr. Kanjorski) 
 introduced the following bill; which was referred to the Committee on 
                     Banking and Financial Serivces

_______________________________________________________________________

                                 A BILL


 
     To allow depository institutions to offer negotiable order of 
withdrawal accounts to all businesses, to repeal the prohibition on the 
    payment of interest on demand deposits, to require the Board of 
  Governors of the Federal Reserve System to pay interest on certain 
                   reserves, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Business Banking Act of 
1997''.

SEC. 2. AMENDMENTS RELATING TO SAVINGS AND DEMAND DEPOSIT ACCOUNTS AT 
              DEPOSITORY INSTITUTIONS.

    (a) Now Accounts Authorized for All Businesses.--Section 2 of 
Public Law 93-100 (12 U.S.C. 1832(a)(2)) is amended to read as follows:

``SEC. 2. WITHDRAWALS BY NEGOTIABLE OR TRANSFERABLE INSTRUMENTS FOR 
              TRANSFERS TO THIRD PARTIES.

    ``Notwithstanding any other provision of law, any depository 
institution (as defined in section 3 of the Federal Deposit Insurance 
Act) may permit the owner of any deposit or account to make withdrawals 
from such deposit or account by negotiable or transferable instruments 
for the purpose of making payments to third parties.''.
    (b) Repeal of Prohibition on Payment of Interest on Demand 
Deposits.--
            (1) Section 19 of the Federal Reserve Act (12 U.S.C. 371a) 
        is amended by striking subsection (i).
            (2) The 1st sentence of section 5(b)(1)(B) of the Home 
        Owners' Loan Act (12 U.S.C. 1464(b)(1)(B)) is amended by 
        striking ``savings association may not--'' and all that follows 
        through ``(ii) permit any'' and inserting ``savings association 
        may not permit any''.
            (3) Section 18 of the Federal Deposit Insurance Act (12 
        U.S.C. 1828) is amended by striking subsection (g).

SEC. 3. PAYMENT OF INTEREST ON RESERVES AT FEDERAL RESERVE BANKS.

    (a) In General.--Section 19(b) of the Federal Reserve Act (12 
U.S.C. 461(b)) is amended by adding at the end the following new 
paragraph:
            ``(12) Earnings on reserves.--
                    ``(A) In general.--Balances maintained at a Federal 
                reserve bank by or on behalf of a depository 
                institution to meet the reserve requirements of this 
                subsection applicable with respect to such depository 
                institution shall receive earnings to be paid by the 
                Federal reserve bank at least once each calendar 
                quarter at a rate not to exceed the rate earned on the 
                securities portfolio of the Federal Reserve System 
                during the preceding quarter.
                    ``(B) Regulations relating to payments and 
                distribution.--The Board may prescribe regulations 
                concerning--
                            ``(i) the payment of earnings in accordance 
                        with this paragraph;
                            ``(ii) the distribution of such earnings to 
                        the depository institutions which maintain 
                        balances at such banks or on whose behalf such 
                        balances are maintained; and
                            ``(iii) the responsibilities of depository 
                        institutions, Federal home loan banks, and the 
                        National Credit Union Administration Central 
                        Liquidity Facility with respect to the 
                        crediting and distribution of earnings 
                        attributable to balances maintained, in 
                        accordance with subsection (c)(1)(B), in a 
                        Federal reserve bank by any such entity on 
                        behalf of depository institutions which are not 
                        member banks.''.
    (b) Technical and Conforming Amendment.--
            (1) Section 19(b)(4) of the Federal Reserve Act (12 U.S.C. 
        461(b)(4)) is amended by striking subparagraph (C).
            (2) Section 19(c)(1)(A) of the Federal Reserve Act (12 
        U.S.C. 461(c)(1)(A)) is amended by striking ``subsection 
        (b)(4)(C)'' and inserting ``subsection (b)''.
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