I
106TH CONGRESS
2D SESSION
H. R. 3611
To increase the number of interaccount transfers which may be made from
business accounts at depository institutions, to require the Board of
Governors of the Federal Reserve System to pay interest on certain
reserves, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 10, 2000
Mrs. KELLY introduced the following bill; which was referred to the
Committee on Banking and Financial Services
A BILL
To increase the number of interaccount transfers which may
be made from business accounts at depository institu-
tions, to require the Board of Governors of the Federal
Reserve System to pay interest on certain reserves, 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 ‘‘Small Business Inter-
est Checking Act of 2000’’.
SEC. 2. INTEREST-BEARING TRANSACTION ACCOUNTS AU-
THORIZED 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 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, 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 ac-
count (as defined in section 19(b) of the Federal Reserve
Act for purposes of such Act.’’.
SEC. 3. 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 to meet the reserve re-
quirements of this subsection applicable with re-
spect to such depository institution shall 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
behalf 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)(B), in a
Federal reserve bank by any such entity on
behalf of depository institutions which are
not member banks.’’.
(b) TECHNICAL AND CONFORMING AMENDMENT.—
(1) SECTION
19(b) OF
FEDERAL
RESERVE
ACT.—Section 19(b)(4) of the Federal Reserve Act
(12 U.S.C. 461(b)(4)) is amended by striking sub-
paragraph (C).
(2) SECTION
19(c) 
OF
FEDERAL
RESERVE
ACT.—Section 19(c)(1)(A) of the Federal Reserve
Act (12 U.S.C. 461(c)(1)(A)) is amended by striking
‘‘subsection (b)(4)(C)’’ and inserting ‘‘subsection
(b)’’.
SEC. 4. INCREASED FEDERAL RESERVE BOARD FLEXI-
BILITY 
IN 
SETTING 
RESERVE 
REQUIRE-
MENTS.
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 which may be zero)’’; and
(2) in clause (ii), by striking ‘‘and not less than
8 per centum,’’ and inserting ‘‘(and which may be
zero),’’.
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