[Congressional Record Volume 147, Number 52 (Tuesday, April 24, 2001)]
[Extensions of Remarks]
[Page E593]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              SMALL BUSINESS INTEREST CHECKING ACT OF 2001

                                 ______
                                 

                               speech of

                           HON. JUDY BIGGERT

                              of illinois

                    in the house of representatives

                         Tuesday, April 3, 2001

  Mrs. BIGGERT. Mr. Speaker, I rise in support of H.R. 974, ``the Small 
Business Interest Checking Act of 2001.'' This bill will repeal the 
prohibition against banks paying interest on checking accounts.
  When this bill was considered in the Subcommittee on Financial 
Institutions, I expressed my concern that this legislation could be 
interpreted in a way that would effectively eliminate the financial 
benefits and checking services that large depositors now receive from 
banks in lieu of interest. These services are now provided in 
accordance with substantial interpretive guidance that has been issued 
by the Federal Reserve under Regulation Q. Current law states that the 
provision or the receipt of such services and benefits does not 
constitute interest.
  I am pleased that Chairman Oxley agreed to modify the bill by 
including a new section and accompanying report language. These 
provisions clarify that the current provision of services by banks in 
accordance with Regulation Q will be continued. This legislation will 
not alter the legal definition of interest for real estate closing 
escrow transactions and provides that current Regulation Q Federal 
regulatory interpretations regarding the definition of interest on 
deposits will continue to stand.
  Title companies and agents currently receive bank services that 
defray the overall cost of maintaining real estate settlement escrows. 
These services subsidize settlement service operations, ultimately 
lowering the cost of closing and settlement services to the public. As 
a highly developed financial system, Federal banking law and 
regulations have consistently operated to facilitate the smooth and 
efficient flow of real estate transactions and promoted American 
homeownership.
  I am grateful that the Committee included a clear statement of 
congressional intent with respect to this issue in relationship to the 
proposed changes in the bill and I fully support H.R. 974.

                          ____________________