SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Business Checking
Modernization Act’’.
SEC. 2. AMENDMENTS RELATING TO DEMAND DEPOSIT AC-
COUNTS AT DEPOSITORY INSTITUTIONS.
(a) REPEAL OF PROHIBITION ON PAYMENT OF IN-
TEREST ON DEMAND DEPOSITS.—
(1) FEDERAL RESERVE ACT.—Section 19(i) of
the Federal Reserve Act (12 U.S.C. 371a) is amend-
ed to read as follows:
‘‘(i) [Repealed]’’.
(2) HOME OWNERS’ LOAN ACT.—The 1st sen-
tence of section 5(b)(1)(B) of the Home Owners’
Loan Act (12 U.S.C. 1464(b)(1)(B)) is amended 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.—Sec-
tion 18(g) of the Federal Deposit Insurance Act (12
U.S.C. 1828(g)) is amended to read as follows:
‘‘(g) [Repealed]’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall take effect at the end of the 1-year
period beginning on the date of the enactment of this Act.
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Business Checking Mod-
ernization Act’’.
SEC. 2. AMENDMENTS RELATING TO DEMAND DEPOSIT AC-
COUNTS AT DEPOSITORY INSTITUTIONS.
(a) INTEREST-BEARING TRANSACTION ACCOUNTS AU-
THORIZED.—
(1) FEDERAL RESERVE ACT.—Section 19(i) of
the Federal Reserve Act (12 U.S.C. 371a) is amended
by inserting at the end the following: ‘‘Notwith-
standing any other provision of this section, a mem-
ber bank may permit the owner of any deposit, any
account which is a deposit, or any account on which
interest or dividends are paid to make up to 24
transfers per month (or such greater number as the
Board may determine by rule or order), for any pur-
pose, to a demand deposit 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 for purposes of this Act.’’.
(2) HOME OWNERS’ LOAN ACT.—
(A) IN
GENERAL.—Section 5(b)(1) of the
Home Owners’ Loan Act (12 U.S.C. 1464 (b)(1))
is amended by adding at the end the following
new subparagraph:
‘‘(G) TRANSFERS.—Notwithstanding any
other provision of this paragraph, a Federal sav-
ings association may permit the owner of any
deposit or share, any account which is a deposit
or share, or any account on which interest or
dividends are paid to make up to 24 transfers
per month (or such greater number as the Board
of Governors of the Federal Reserve System may
determine by rule or order under section 19(i) to
be permissible for member banks), for any pur-
pose, to a demand deposit account of the owner
in the same institution. Nothing in this sub-
section 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) for pur-
poses of the Federal Reserve Act.’’.
(B) REPEAL.—Effective at the end of the 3-
year period beginning on the date of the enact-
ment of this Act, section 5(b)(1) of the Home
Owners’ Loan Act (12 U.S.C. 1464 (b)(1)) is
amended by striking subparagraph (G).
(3) FEDERAL DEPOSIT INSURANCE ACT.—Section
18(g) of the Federal Deposit Insurance Act (12 U.S.C.
1828(g)) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(3) TRANSFERS.—Notwithstanding any other
provision of this subsection, an insured nonmember
bank or insured State savings association may permit
the owner of any deposit or share, any account which
is a deposit or share, or any account on which inter-
est or dividends are paid to make up to 24 transfers
per month (or such greater number as the Board of
Governors of the Federal Reserve System may deter-
mine by rule or order under section 19(i) to be per-
missible for member banks), for any purpose, to a de-
mand deposit account of the owner in the same insti-
tution. Nothing in this subsection shall be construed
to prevent an account offered pursuant to this sub-
section from being considered a transaction account
(as defined in section 19(b) of the Federal Reserve
Act) for purposes of the Federal Reserve Act.’’.
(b) REPEAL OF PROHIBITION ON PAYMENT OF INTER-
EST 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) [Repealed]’’.
(2) HOME OWNERS’ LOAN ACT.—The 1st sentence
of section 5(b)(1)(B) of the Home Owners’ Loan Act
(12 U.S.C. 1464(b)(1)(B)) is amended by striking
‘‘savings association may not—’’ and all that follows
through ‘‘(ii) permit any’’ and inserting ‘‘savings as-
sociation 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) [Repealed]’’.
(c) EFFECTIVE DATE.—The amendments made by sub-
section (b) shall take effect at the end of the 3-year period
beginning on the date of the enactment of this Act.
SEC. 3. 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’’.
Union Calendar No. 313
106TH CONGRESS
2D SESSION
H. R. 4067
[Report No. 106–568]
A BILL
To repeal the prohibition on the payment of inter-
est on demand deposits, and for other purposes.
APRIL 11, 2000
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union,
and ordered to be printed