[Federal Register Volume 61, Number 150 (Friday, August 2, 1996)]
[Notices]
[Pages 40419-40420]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-19555]


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FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL


Interagency Policy Statement Regarding Advertising of NOW 
Accounts

AGENCIES: Office of the Comptroller of the Currency (OCC), Department 
of the Treasury; Board of Governors of the Federal Reserve System 
(FRB); Federal Deposit Insurance Corporation (FDIC); Office of Thrift 
Supervision (OTS), Department of the Treasury.

ACTION: Withdrawal of statement of policy.

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SUMMARY: The OCC, FRB, FDIC, and OTS (the Agencies) are withdrawing 
their joint statement of policy entitled ``Interagency policy statement 
regarding advertising of Negotiable Order of Withdrawal (NOW) 
Accounts'' (the Statement) on the ground that it is obsolete.

EFFECTIVE DATE: The removal of the Statement of Policy is effective 
August 2, 1996.

FOR FURTHER INFORMATION CONTACT:
OCC: Paul Utterback, National Bank Examiner, (202/874-5461), 250 E 
Street, S.W., Washington, D.C. 20219.
FRB: J. Ericson Heyke III, Staff Attorney, (202/452-3688), 20th and C 
Streets, N.W., Washington, D.C. 20551.

[[Page 40420]]

FDIC: Marc J. Goldstrom, Counsel, (202/898-8807), Legal Division, 550-
17th St., N.W., Washington, D.C. 20429.
OTS: Richard Blanks, (202/906-7037), Counsel (Banking and Finance), 
Office of Thrift Supervision, 1700 G Street, N.W., Washington, D.C. 
20552.

SUPPLEMENTARY INFORMATION: ``NOW accounts'' are, in essence, interest-
bearing checking accounts. Federal law expressly authorizes depository 
institutions to offer such accounts:

    * * * [A] depository institution is authorized to permit the 
owner of a deposit or account on which interest or dividends are 
paid to make withdrawals by negotiable or transferable instruments 
for the purpose of making transfers to third parties.

12 U.S.C. 1832(1).1

    \1\ The authorization only applies to certain accounts, however: 
namely, those that belong to natural persons, to nonprofit 
organizations, and to public units. See 12 U.S.C. 1832(2).
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    At first, Congress only allowed such withdrawals to be made in 
Massachusetts and New Hampshire. Act of August 16, 1973, Public Law 93-
100, section 2, 87 Stat. 342. Congress extended this permission to 
other states over the next several years. Act of February 27, 1976, 
Public Law 94-222, section 2, 90 Stat. 197 (Connecticut, Rhode Island, 
Maine, and Vermont); Financial Institutions Regulatory and Interest 
Rate Control Act of 1978, Public Law 95-630, section 1301, 92 Stat. 
3641, 3712 (1978) (New York); Act of December 28, 1979, Public Law 96-
161, section 106, 93 Stat. 1233, 1235 (New Jersey). Congress finally 
discarded geographic restrictions entirely, effective December 31, 
1980. See Depository Institutions Deregulation and Monetary Control Act 
of 1980, Public Law 96-221, section 303, 94 Stat. 132, 146 (1980).
    During these years, the various Agencies had well-established and 
long-standing rules governing the advertising of interest paid on 
deposits. See Regulation Q, 12 CFR 217.6 (1980) (issued by the FRB, and 
applicable to all member banks, including national banks); id. 
Sec. 329.8 (issued by the FDIC, and applicable to insured state 
nonmember banks); id. Sec. 526.6 (issued by the Federal Home Loan Bank 
Board, and applicable to any member of a Federal Home Loan Bank, except 
an FDIC-insured savings bank, or an institution in Guam) and 
Sec. 563.27 (issued by the Federal Savings and Loan Insurance 
Corporation, and applicable to all institutions insured by that 
entity).
    The Statement says that it is intended to ``remind'' depository 
institutions that, when they advertise the interest-rates that they pay 
on NOW accounts, they must comply with these rules. 45 FR 67464 (1980).
    This aspect of the Statement has become obsolete. Congress has 
adopted the Truth-In-Savings Act (TISA). Federal Deposit Insurance 
Corporation Improvement Act of 1991, Public Law 102-242, 261-74, 105 
Stat. 2236, 2334-43 (Dec. 19, 1991); 12 U.S.C. 4301-13. The TISA 
prescribes statutory requirements for the advertisement and payment of 
interest on deposits, and calls for the FRB to issue any necessary 
regulations. 12 U.S.C. 4308. The FRB has responded by adopting 
Regulation DD, 12 CFR part 230. See 57 FR 43337 (1992).
    The Agencies have acknowledged that Regulation DD has superseded 
their own advertising rules, and have therefore rescinded them. See id. 
43336 (removing the advertising provisions of Regulation Q); 58 FR 4308 
(removing all but the most general advertising regulations of the 
Office of Thrift Supervision); 58 FR 27921 (1993) (repealing the FDIC's 
advertising regulation).
    The Statement also provides advice regarding the advance promotion 
and advertisement of NOW accounts by depository institutions that 
received NOW account authority for the first time on December 31, 1980. 
The Statement is obsolete in this respect as well.
The Agencies' Action
    The Agencies hereby withdraw the Statement.

    Dated: July 26, 1996.
Joe M. Cleaver,
Executive Secretary, Federal Financial Institutions Examination 
Council.
[FR Doc. 96-19555 Filed 8-1-96; 8:45 am]
BILLING CODE 6210-01-P