[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4427 Introduced in House (IH)]







106th CONGRESS
  2d Session
                                H. R. 4427

To amend the Federal Reserve Act to require the payment of interest on 
  reserves maintained at Federal reserve banks by insured depository 
  institutions that make affordable transaction accounts available to 
                their customers, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 11, 2000

  Mr. LaFalce (for himself, Ms. Waters, Mrs. Maloney of New York, Mr. 
 Gutierrez, Mr. Meeks of New York, and Ms. Schakowsky) introduced the 
  following bill; which was referred to the Committee on Banking and 
                           Financial Services

_______________________________________________________________________

                                 A BILL


 
To amend the Federal Reserve Act to require the payment of interest on 
  reserves maintained at Federal reserve banks by insured depository 
  institutions that make affordable transaction accounts available to 
                their customers, 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 ``Banking Equal Treatment Act of 
2000''.

SEC. 2. 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 qualified depository 
                institution may 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.
                    ``(C) Qualified depository institution defined.--
                The term `qualified depository institution' means--
                            ``(i) any depository institution that--
                                    ``(I) is an insured depository 
                                institution (as defined in section 3(c) 
                                of the Federal Deposit Insurance Act) 
                                or an insured credit union (as defined 
                                in section 101(7) of the Federal Credit 
                                Union Act); and
                                    ``(II) meets the requirements for 
                                affordable transaction accounts in 
                                section 4 of the Banking Equal 
                                Treatment Act of 2000; and
                            ``(ii) any depository institution that is 
                        neither an insured depository institution (as 
                        so defined) or an insured credit union (as so 
                        defined).''.
    (b) Authorization for Pass Through Reserves for Member Banks.--
Section 19(c)(1)(B) of the Federal Reserve Act (12 U.S.C. 461(c)(1)(B)) 
is amended by striking ``which is not a member bank''.
    (c) Technical and Conforming Amendments.--Section 19 of the Federal 
Reserve Act (12 U.S.C. 461) is amended--
            (1) in subsection (b)(4) (12 U.S.C. 461(b)(4)), by striking 
        subparagraph (C) and redesignating subparagraphs (D) and (E) as 
        subparagraphs (C) and (D), respectively; and
            (2) in subsection (c)(1)(A) (12 U.S.C. 461(c)(1)(A)), by 
        striking ``subsection (b)(4)(C)'' and inserting ``subsection 
        (b)''.

SEC. 3. TRANSFER OF FEDERAL RESERVE SURPLUSES.

    Section 7(b) of the Federal Reserve Act (12 U.S.C. 290) is amended 
by adding at the end the following new paragraph:
            ``(4) Additional transfers for fiscal years 2001 through 
        2005.--
                    ``(A) In general.--In addition to the amounts 
                required to be transferred from the surplus funds of 
                the Federal reserve banks pursuant to paragraph (1), 
                the Federal reserve banks shall transfer from such 
                surplus funds to the Board of Governors of the Federal 
                Reserve System for transfer to the Secretary of the 
                Treasury for deposit in the general fund of the 
                Treasury, such sums as are necessary to equal the net 
                cost of section 19(b)(12), as estimated by the Office 
                of Management and Budget in each of the fiscal years 
                2001 through 2005.
                    ``(B) Allocation by federal reserve board.--Of the 
                total amount required to be paid by the Federal reserve 
                banks under subparagraph (A) for fiscal years 2001 
                through 2005, the Board of Governors of the Federal 
                Reserve System shall determine the amount each such 
                bank shall pay in such fiscal year.
                    ``(C) Replenishment of surplus fund prohibited.--No 
                Federal reserve bank may replenish such bank's surplus 
                fund by the amount of any transfer by such bank under 
                subparagraph (A) during the fiscal year for which such 
                transfer is made.''.

SEC. 4. AFFORDABLE BANKING SERVICES.

    (a) In General.--Except as otherwise provided in this section, each 
insured depository institution shall make available to consumers a 
consumer transaction account, to be known as an ``affordable 
transaction account'', with the following features to be prescribed 
jointly by the Federal banking agencies, by regulation:
            (1) Initial deposit.--The maximum amount which an insured 
        depository institution may require as an initial deposit, if 
        any.
            (2) Minimum balance.--The maximum amount an insured 
        depository institution may require as a minimum balance, if 
        any, to maintain such account.
            (3) Minimum number of free withdrawals.--A minimum of 8 
        withdrawal transactions, including withdrawals by negotiable or 
        transferable instruments for the purpose of making payments to 
        third parties and electronic fund transfers, during any 
        periodic cycle at no additional charge to the account holder.
            (4) Maximum monthly service charge.--The maximum amount an 
        insured depository institution may charge per periodic cycle 
        for the use of such account.
    (b) Fees for Withdrawal Transactions in Excess of Minimum Number of 
Free Withdrawals.--
            (1) In general.--Subject to paragraph (2), in the case of 
        any affordable transaction account--
                    (A) an insured depository institution may impose a 
                reasonable per-transaction charge for any withdrawal 
                transaction described in subsection (a)(3) other than a 
                transaction required under such subsection to be 
                provided free; or
                    (B) the depository institution may impose the fees 
                and charges normally applied to other consumer 
                transaction accounts available at that depository 
                institution.
            (2) Limitations.--
                    (A) Periodic cycle fee adjustment.--The amount of 
                any charge per periodic cycle imposed by an insured 
                depository institution on any affordable transaction 
                account pursuant to paragraph(1)(B) shall be reduced by 
                the charge imposed under subsection (a)(4).
                    (B) Maximum amount.--At no time shall the total 
                amount of fees and charges imposed by an insured 
                depository institution on any affordable transaction 
                account exceed the total amount of fees and charges 
                that is normally applied to other consumer transaction 
                accounts available at the depository institution.
    (c) Conditions for Opening any Affordable Transaction Account.--An 
insured depository institution may require as a condition for opening 
or maintaining any affordable transaction account that--
            (1) the holder of the account be a resident of the State in 
        which the account is opened or maintained; and
            (2) the deposits to the account of recurring payments such 
        as Social Security, wage, or pension payments be made by direct 
        deposit if that form of deposit is available to both the 
        consumer and the depository institution.
    (d) Other Terms and Conditions.--
            (1) In general.--Except as provided in this section and any 
        regulations prescribed under this section, any affordable 
        transaction account may be offered by an insured depository 
        institution subject to the same rules, conditions, and terms 
        normally applicable to other consumer transaction accounts 
        offered by the depository institution.
            (2) Prohibition on discrimination against affordable 
        transaction account holders in providing other services.--The 
        amount of any fee or charge imposed on a holder of any 
        affordable transaction account by an insured depository 
        institution for specific services provided to such account 
        holder which are not directly related to the maintenance of 
        such account may not exceed the fee or charge imposed by the 
        depository institution for providing the same services in 
        connection with other consumer transaction accounts offered by 
        the depository institution.
    (e) Affordable Transaction Accounts Not Required for Individuals 
Who Maintain Other Transaction Accounts.--An insured depository 
institution shall not be required to permit any person to open or 
maintain an affordable transaction account pursuant to this section if 
such person maintains another consumer transaction account either at 
that depository institution or any other insured depository 
institution.
    (f) Alternative Arrangements.--In lieu of the affordable 
transaction account required by this section, an insured depository 
institution may make available an alternative form of account or other 
banking services if the appropriate Federal banking agency determines 
that such alternative form of account or services are at least as 
advantageous to consumers as the affordable transaction account.
    (g) Disclosure Requirements.--.
            (1) Posted notices.--If an insured depository institution 
        posts in the public area of any office of the institution a 
        notice of the availability of other consumer transaction 
        accounts, the depository institution shall also post equally 
        conspicuous notice in such public area and in the same manner 
the availability of its affordable transaction accounts.
            (2) Printed material.--If an insured depository institution 
        makes available in the public area of any office of the 
        institution printed material describing the terms of its other 
        consumer transaction accounts, the depository institution shall 
        also make comparable descriptive printed material concerning 
        the affordable transaction accounts available in the same such 
        area and in the same manner.
    (h) Definitions.--For purposes of this section, the following 
definitions shall apply:
            (1) Consumer transaction account.--For purposes of this 
        section, the term ``consumer transaction account'' means a 
        demand deposit account, negotiable order of withdrawal account, 
        share draft account, or any similar transaction account used 
        primarily for personal, family or household purposes.
            (2) Depository institution.--The term ``depository 
        institution'' has the same meaning as in section 19(b)(1)(A) of 
        the Federal Reserve Act.
            (3) Federal banking agency.--The term ``Federal banking 
        agency''--
                    (A) has the same meaning as in section 3(z) of the 
                Federal Deposit Insurance Act; and
                    (B) includes the National Credit Union 
                Administration Board.
            (4) Insured depository institution.--The term ``insured 
        depository institution''--
                    (A) has the same meaning as in section 3(c)(2) of 
                the Federal Deposit Insurance Act; and
                    (B) includes an insured credit union (as defined in 
                section 101(7) of the Federal Credit Union Act.
    (i) Compliance With More Stringent State Law.--If a depository 
institution operates in a State the laws of which, including 
regulations, require a depository institution operating in such State 
to meet requirements for affordable transaction accounts which are more 
advantageous to the consumer than the requirements of this section or 
the regulations prescribed under this section, such depository 
institution may not be treated as a qualified depository institution 
for purposes of section 19(b)(12) of the Federal Reserve Act, unless 
such depository institution meets the requirements of this section and 
the requirements of such State law.
    (j) Rule of Construction.--No provision of this section, title LXII 
of the Revised Statutes of the United States, the Home Owners' Loan 
Act, the Bank Enterprise Act of 1991, or any other Federal law may be 
construed as preempting, or providing any basis for the Comptroller of 
the Currency or the Director of the Office of Thrift Supervision to 
conclude that Federal law in any way preempts, the law of any State 
which requires depository institution operating in that State to 
provide affordable transaction accounts, including the Omnibus Consumer 
Protection and Banking Deregulation Act of 1994 of the State of New 
York and the New Jersey Consumer Checking Account Act (as in effect on 
the the date of the enactment of this Act).
                                 <all>