IB 
Union Calendar No. 33
108TH CONGRESS 
1ST SESSION 
H. R. 758
[Report No. 108–53] 
To allow all businesses to make up to 24 transfers each month from interest-
bearing transaction accounts to other transaction accounts, to require 
the payment of interest on reserves held for depository institutions at 
Federal reserve banks, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 13, 2003
Mrs. KELLY (for herself, Mrs. MALONEY, Mrs. CAPITO, Mr. SHERMAN, and 
Mr. MOORE) introduced the following bill; which was referred to the Com-
mittee on Financial Services 
MARCH 31, 2003
Additional sponsor: Mr. BEREUTER 
MARCH 31, 2003 
Reported with an amendment, committed to the Committee of the Whole 
House on the State of the Union, and ordered to be printed 
[Strike out all after the enacting clause and insert the part printed in italic] 
[For text of introduced bill, see copy of bill as introduced on February 13, 2003] 
A BILL 
To allow all businesses to make up to 24 transfers each 
month from interest-bearing transaction accounts to 
other transaction accounts, to require the payment of 
interest on reserves held for depository institutions at 
Federal reserve banks, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Business Checking Free-
dom Act of 2003’’. 
SEC. 2. INTEREST-BEARING TRANSACTION ACCOUNTS AU-
THORIZED FOR ALL BUSINESSES. 
(a) 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 fol-
lowing: 
‘‘(b) Notwithstanding any other provision of law, any 
depository institution may permit the owner of any deposit 
or account which is a deposit or account on which interest 
or dividends are paid and is not a deposit or account de-
scribed in subsection (a)(2) 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), for any purpose, to another account of the owner 
in the same institution. An account offered pursuant to this 
subsection shall be considered a transaction account for 
purposes of section 19 of the Federal Reserve Act unless the
Board of Governors of the Federal Reserve System deter-
mines otherwise.’’.
(b) Effective at the end of the 2-year period beginning 
on the date of the enactment of this Act, section 2 of Public 
Law 93–100 (12 U.S.C. 1832) is amended—
(1) in subsection (a)(1), by striking ‘‘but subject 
to paragraph (2)’’; 
(2) by striking paragraph (2) of subsection (a) 
and inserting the following new paragraph: 
‘‘(2) No provision of this section may be con-
strued as conferring the authority to offer demand de-
posit accounts to any institution that is prohibited by 
law from offering demand deposit accounts.’’; and 
(3) in subsection (b) (as added by subsection (a) 
of this section) by striking ‘‘and is not a deposit or 
account described in subsection (a)(2)’’. 
SEC. 3. INTEREST-BEARING TRANSACTION ACCOUNTS AU-
THORIZED. 
(a) 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 first 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 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]’’. 
(b) EFFECTIVE DATE.—The amendments made by sub-
section (a) shall take effect at the end of the 2-year period 
beginning on the date of the enactment of this Act. 
SEC. 4. PAYMENT OF INTEREST ON RESERVES AT FEDERAL 
RESERVE BANKS. 
(a) IN GENERAL.—Section 19(b) of the Federal Re-
serve Act (12 U.S.C. 461(b)) is amended by adding at the 
end the following new paragraph: 
‘‘(12) EARNINGS ON RESERVES.—
‘‘(A) IN
GENERAL.—Balances maintained 
at a Federal reserve bank by or on behalf of a 
depository institution may receive earnings to be 
paid by the Federal reserve bank at least once 
each calendar quarter at a rate or rates not to
exceed the general level of short-term interest 
rates. 
‘‘(B) REGULATIONS
RELATING
TO
PAY-
MENTS
AND
DISTRIBUTION.—The Board may 
prescribe regulations concerning—
‘‘(i) the payment of earnings in ac-
cordance with this paragraph; 
‘‘(ii) the distribution of such earnings 
to the depository institutions which main-
tain balances at such banks or on whose be-
half such balances are maintained; and 
‘‘(iii) the responsibilities of depository 
institutions, Federal home loan banks, and 
the National Credit Union Administration 
Central Liquidity Facility with respect to 
the crediting and distribution of earnings 
attributable to balances maintained, in ac-
cordance with subsection (c)(1)(A), in a 
Federal reserve bank by any such entity on 
behalf of depository institutions. 
‘‘(C) 
DEPOSITORY
INSTITUTIONS
DE-
FINED.—For purposes of this paragraph, the 
term ‘depository institution’, in addition to the 
institutions described in paragraph (1)(A), in-
cludes any trust company, corporation organized
under section 25A or having an agreement with 
the Board under section 25, or any branch or 
agency of a foreign bank (as defined in section 
1(b) of the International Banking Act of 1978).’’. 
(b) AUTHORIZATION FOR PASS THROUGH RESERVES 
FOR MEMBER BANKS.—Section 19(c)(1)(B) of the Federal 
Reserve Act (12 U.S.C. 461(c)(1)(B)) is amended by strik-
ing ‘‘which is not a member bank’’.
(c) CONSUMER BANKING COSTS ASSESSMENT.—
(1) IN GENERAL.—The Federal Reserve Act (12 
U.S.C. 221 et seq.) is amended—
(A) by redesignating sections 30 and 31 as 
sections 31 and 32, respectively; and 
(B) by inserting after section 29 the fol-
lowing new section: 
‘‘SEC. 30. SURVEY OF BANK FEES AND SERVICES. 
‘‘(a) ANNUAL SURVEY REQUIRED.—The Board of Gov-
ernors of the Federal Reserve System shall obtain annually 
a sample, which is representative by type and size of the 
institution (including small institutions) and geographic 
location, of the following retail banking services and prod-
ucts provided by insured depository institutions and in-
sured credit unions (along with related fees and minimum 
balances): 
‘‘(1) Checking and other transaction accounts.
‘‘(2) Negotiable order of withdrawal and savings 
accounts. 
‘‘(3) Automated teller machine transactions. 
‘‘(4) Other electronic transactions. 
‘‘(b) MINIMUM SURVEY REQUIREMENT.—The annual 
survey described in subsection (a) shall meet the following 
minimum requirements: 
‘‘(1) CHECKING AND OTHER TRANSACTION AC-
COUNTS.—Data on checking and transaction accounts 
shall include, at a minimum, the following: 
‘‘(A) Monthly and annual fees and min-
imum balances to avoid such fees. 
‘‘(B) Minimum opening balances. 
‘‘(C) Check processing fees. 
‘‘(D) Check printing fees. 
‘‘(E) Balance inquiry fees. 
‘‘(F) Fees imposed for using a teller or other 
institution employee. 
‘‘(G) Stop payment order fees. 
‘‘(H) Nonsufficient fund fees. 
‘‘(I) Overdraft fees. 
‘‘(J) Deposit items returned fees. 
‘‘(K) Availability of no-cost or low-cost ac-
counts for consumers who maintain low bal-
ances.
‘‘(2) NEGOTIABLE ORDER OF WITHDRAWAL AC-
COUNTS AND SAVINGS ACCOUNTS.—Data on negotiable 
order of withdrawal accounts and savings accounts 
shall include, at a minimum, the following: 
‘‘(A) Monthly and annual fees and min-
imum balances to avoid such fees. 
‘‘(B) Minimum opening balances. 
‘‘(C) Rate at which interest is paid to con-
sumers. 
‘‘(D) Check processing fees for negotiable 
order of withdrawal accounts. 
‘‘(E) Fees imposed for using a teller or 
other institution employee. 
‘‘(F) Availability of no-cost or low-cost ac-
counts for consumers who maintain low bal-
ances. 
‘‘(3) AUTOMATED TELLER TRANSACTIONS.—Data 
on automated teller machine transactions shall in-
clude, at a minimum, the following: 
‘‘(A) Monthly and annual fees. 
‘‘(B) Card fees. 
‘‘(C) Fees charged to customers for with-
drawals, deposits, and balance inquiries through 
institution-owned machines.
‘‘(D) Fees charged to customers for with-
drawals, deposits, and balance inquiries through 
machines owned by others. 
‘‘(E) Fees charged to noncustomers for with-
drawals, deposits, and balance inquiries through 
institution-owned machines. 
‘‘(F) Point-of-sale transaction fees. 
‘‘(4) OTHER ELECTRONIC TRANSACTIONS.—Data 
on other electronic transactions shall include, at a 
minimum, the following: 
‘‘(A) Wire transfer fees. 
‘‘(B) Fees related to payments made over 
the Internet or through other electronic means. 
‘‘(5) OTHER FEES AND CHARGES.—Data on any 
other fees and charges that the Board of Governors of 
the Federal Reserve System determines to be appro-
priate to meet the purposes of this section. 
‘‘(6) FEDERAL RESERVE BOARD AUTHORITY.—
The Board of Governors of the Federal Reserve Sys-
tem may cease the collection of information with re-
gard to any particular fee or charge specified in this 
subsection if the Board makes a determination that, 
on the basis of changing practices in the financial 
services industry, the collection of such information is
no longer necessary to accomplish the purposes of this 
section. 
‘‘(c) ANNUAL REPORT TO CONGRESS REQUIRED.—
‘‘(1) PREPARATION.—The Board of Governors of 
the Federal Reserve System shall prepare a report of 
the results of each survey conducted pursuant to sub-
sections (a) and (b) of this section and section 
136(b)(1) of the Consumer Credit Protection Act. 
‘‘(2) CONTENTS OF THE REPORT.—In addition 
to the data required to be collected pursuant to sub-
sections (a) and (b), each report prepared pursuant to 
paragraph (1) shall include a description of any dis-
cernible trend, in the Nation as a whole, in a rep-
resentative sample of the 50 States (selected with due 
regard for regional differences), and in each consoli-
dated metropolitan statistical area (as defined by the 
Director of the Office of Management and Budget), in 
the cost and availability of the retail banking services, 
including those described in subsections (a) and (b) 
(including related fees and minimum balances), that 
delineates differences between institutions on the basis 
of the type of institution and the size of the institu-
tion, between large and small institutions of the same 
type, and any engagement of the institution in 
multistate activity.
‘‘(3) SUBMISSION TO CONGRESS.—The Board of 
Governors of the Federal Reserve System shall submit 
an annual report to the Congress not later than June 
1, 2005, and not later than June 1 of each subsequent 
year. 
‘‘(d) DEFINITIONS.—For purposes of this section, the 
term ‘insured depository institution’ has the meaning given 
such term in section 3 of the Federal Deposit Insurance Act, 
and the term ‘insured credit union’ has the meaning given 
such term in section 101 of the Federal Credit Union Act.’’. 
(2) CONFORMING AMENDMENT.—
(A) IN GENERAL.—Paragraph (1) of section 
136(b) of the Truth in Lending Act (15 U.S.C. 
1646(b)(1)) is amended to read as follows: 
‘‘(1) COLLECTION REQUIRED.—The Board shall 
collect, on a semiannual basis, from a broad sample 
of financial institutions which offer credit card serv-
ices, credit card price and availability information 
including—
‘‘(A) the information required to be dis-
closed under section 127(c) of this chapter; 
‘‘(B) the average total amount of finance 
charges paid by consumers; and 
‘‘(C) the following credit card rates and 
fees:
‘‘(i) Application fees. 
‘‘(ii) Annual percentage rates for cash 
advances and balance transfers. 
‘‘(iii) Maximum annual percentage 
rate that may be charged when an account 
is in default. 
‘‘(iv) Fees for the use of convenience 
checks. 
‘‘(v) Fees for balance transfers. 
‘‘(vi) Fees for foreign currency conver-
sions.’’. 
(B) EFFECTIVE
DATE.—The amendment 
made by subparagraph (A) shall take effect on 
January 1, 2004. 
(3) REPEAL OF OTHER REPORT PROVISIONS.—
Section 1002 of Financial Institutions Reform, Re-
covery, and Enforcement Act of 1989 and section 108 
of the Riegle-Neal Interstate Banking and Branching 
Efficiency Act of 1994 are hereby repealed. 
(d) TECHNICAL AND CONFORMING AMENDMENTS.—
Section 19 of the Federal Reserve Act (12 U.S.C. 461) is 
amended—
(1) in subsection (b)(4) (12 U.S.C. 461(b)(4)), by 
striking subparagraph (C) and redesignating sub-
fund of any Federal reserve bank in excess of the 
amount equal to 3 percent of the paid-in capital and 
surplus of the member banks of such bank shall be 
transferred to the Secretary of the Treasury for de-
posit in the general fund of the Treasury.’’.
SEC. 7. RULE OF CONSTRUCTION. 
In the case of an escrow account maintained at a de-
pository institution in connection with a real estate trans-
action—
(1) the absorption, by the depository institution, 
of expenses incidental to providing a normal banking 
service with respect to such escrow account; 
(2) the forbearance, by the depository institution, 
from charging a fee for providing any such banking 
function; and 
(3) any benefit which may accrue to the holder 
or the beneficiary of such escrow account as a result 
of an action of the depository institution described in 
subparagraph (1) or (2) or similar in nature to such 
action, 
shall not be treated as the payment or receipt of interest 
for purposes of this Act and any provision of Public Law 
93–100, the Federal Reserve Act, the Home Owners’ Loan 
Act, or the Federal Deposit Insurance Act relating to the 
payment of interest on accounts or deposits at depository
institutions, provided, however, that nothing herein shall be 
construed so as to require a depository institution that 
maintains an escrow account in connection with a real es-
tate transaction to pay interest on such escrow account or 
to prohibit such institution from paying interest on such 
escrow account. Nor shall anything herein be construed to 
preempt the provisions of law of any State dealing with 
the payment of interest on escrow accounts maintained in 
connection with real estate transactions.
Union Calendar No. 33
108TH CONGRESS 
1ST SESSION 
H. R. 758
[Report No. 108–53] 
A BILL 
To allow all businesses to make up to 24 transfers 
each month from interest-bearing transaction ac-
counts to other transaction accounts, to require 
the payment of interest on reserves held for de-
pository institutions at Federal reserve banks, 
and for other purposes. 
MARCH 31, 2003
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union, 
and ordered to be printed