[Congressional Record Volume 147, Number 39 (Thursday, March 22, 2001)]
[Senate]
[Page S2776]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SHELBY:
  S. 601. 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; to the Committee on 
Banking, Housing, and Urban Affairs.
  Mr. SHELBY. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 601

       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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