[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 601 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                 S. 601

To authorize the payment of interest on certain accounts at depository 
institutions, to increase flexibility in setting reserve requirements, 
                        and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 22, 2001

  Mr. Shelby introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
To authorize the payment of interest on certain accounts at depository 
institutions, to increase flexibility in setting reserve requirements, 
                        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 Checking Regulatory 
Relief Act of 2001''.

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) Transfers.--Notwithstanding any other provision of law, any 
depository institution may, before September 1, 2002, 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 
that Act.''.

SEC. 3. 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) 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. With respect to an 
escrow account maintained in connection with a loan, a lender or 
servicer shall pay interest on such account only if such payments are 
required by contract between the lender or servicer and the borrower, 
or a specific statutory provision of the law of the State in which the 
security property is located requires the lender or servicer to make 
such payments.''.
    (b) Repeal of Prohibitions on Payment of Interest on Demand 
Deposits.--
            (1) Federal reserve act.--Section 19(i) of the Federal 
        Reserve Act (12 U.S.C. 371a) is amended to read as follows:
    ``(i) [Reserved].''.
            (2) Home owners' loan act.--Section 5(b)(1)(B) of the Home 
        Owners' Loan Act (12 U.S.C. 1464(b)(1)(B)) is amended in the 
        first sentence, 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(g) of the 
        Federal Deposit Insurance Act (12 U.S.C. 1828(g)) is amended to 
        read as follows:
    ``(g) [Reserved].''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on September 1, 2002.

SEC. 4. 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
            (2) in clause (ii), by striking ``and not less than 8 per 
        centum''.
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