[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4082 Introduced in House (IH)]
105th CONGRESS
2d Session
H. R. 4082
To allow depository institutions to offer interest-bearing transaction
accounts and 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.
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IN THE HOUSE OF REPRESENTATIVES
June 18, 1998
Mrs. Kelly introduced the following bill; which was referred to the
Committee on Banking and Financial Services
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A BILL
To allow depository institutions to offer interest-bearing transaction
accounts and 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 Interest Checking Act
of 1998''.
SEC. 2. INTEREST-BEARING TRANSACTION ACCOUNTS AUTHORIZED FOR ALL
BUSINESSES.
Section 2 of Public Law 93-100 (12 U.S.C. 1832) is amended--
(1) by redesignating subsections (b) and (c) as subsections
(c) and (d), respectively; and
(2) by inserting after subsection (a) the following:
``(b) Notwithstanding any other provision of law, any depository
institution may permit the owner of any deposit or account on which
interest or dividends are paid to make up to 24 transfers per month,
for any purpose, to another account of the owner in the same
institution. Nothing in this subsection shall be construed to prevent
an account offered pursuant to this subsection from being considered a
transaction account (as defined in section 19(b) of the Federal Reserve
Act (12 U.S.C. 461(b)) for purposes of such Act.''.
SEC. 3. 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) Federal reserve act.--Section 19 of the Federal Reserve
Act (12 U.S.C. 371a) is amended by striking subsection (i).
(2) Home owners' loan act.--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) Federal deposit insurance act.--Section 18 of the
Federal Deposit Insurance Act (12 U.S.C. 1828) is amended by
striking subsection (g).
(c) Effective Date.--The amendments made by this section shall take
effect on October 1, 2004.
SEC. 4. 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 or rates not to exceed the general
level of short term interest rates.
``(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) of federal reserve act.--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) of federal reserve act.--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)''.
SEC. 5. INCREASED FEDERAL RESERVE BOARD FLEXIBILITY IN SETTING RESERVE
REQUIREMENTS.
Section 19(b)(2) of the Federal Reserve Act (12 U.S.C. 461(b)(2))
is amended--
(1) in clause (i), by striking ``the ratio of 3 per
centum'' and inserting ``a ratio not greater than 3 percent
(and which may be zero)''; and
(2) in clause (ii), by striking ``and not less than 8 per
centum,'' and inserting ``(and which may be zero),''.
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