[Congressional Record Volume 146, Number 53 (Wednesday, May 3, 2000)]
[Extensions of Remarks]
[Page E621]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  BUSINESS CHECKING MODERNIZATION ACT

                                 ______
                                 

                        HON. SUE WILKINS MYRICK

                           of north carolina

                    in the house of representatives

                         Wednesday, May 3, 2000

  Mrs. MYRICK. Mr. Speaker, the House of Representatives yesterday 
passed H.R. 4067, the ``Business Checking Modernization Act'' by voice 
vote. As this legislation goes to the Senate and possible to a 
conference, I would like to urge my House colleagues who will be 
conferees to insist on the inclusion of two important provisions in any 
conference report. One key provision currently not part of this 
legislation is language that would allow the Federal Reserve to pay 
interest on ``sterile reserves.'' The last time the House of 
Representatives passed similar legislation on October 9, 1998, such 
language was included. This language is still needed. The measure that 
passed yesterday will impose new costs on banks, according to the 
Federal Reserve, without any provision for offsetting these costs. The 
Federal Reserve has expressed its support for the payment of interest 
on sterile reserves to offset these costs, and I understand that House 
Banking Committee Chairman Leach has indicated that he supports the 
provision as well. I would urge my colleagues to include that language 
in any conference report prepared on this bill.
  One other provision that I would urge the House conferees to retain 
is language providing a three-year transition period before the payment 
of interest on commercial checking accounts becomes effective. This 
transition period is shorter by half than the transition period 
included in the legislation adopted by the House in 1998, and yet it is 
still the case that banks will be required to unwind and restructure 
long-standing relationships with their customers. Due to the current 
prohibition against the payment of interest on commercial checking 
accounts, many banks have developed a menu of other services that they 
provide to their customers. These will need to be restructured. With 
yesterday's vote the House has already reduced the transition period 
available to banks from the earlier 1998 legislation. It is very 
important that this transition period of three years not be reduced 
further. I would urge the House conferees to maintain the House 
position of a three-year transition period in any conference report on 
H.R. 4067.

                          ____________________