I 
108TH CONGRESS 
1ST SESSION 
H. R. 758
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 
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 
Freedom Act of 2003’’.
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 (or such greater number as the Board of Gov-
ernors 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 pursu-
ant 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 determines otherwise.’’. 
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 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 in-
terest 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)(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 orga-
nized under section 25A or having an agree-
ment 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 Fed-
eral Reserve Act (12 U.S.C. 461(c)(1)(B)) is amended by 
striking ‘‘which is not a member bank’’. 
(c) 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-
paragraphs (D) and (E) as subparagraphs (C) and 
(D), respectively; and
(2) 
in 
subsection 
(c)(1)(A) 
(12 
U.S.C. 
461(c)(1)(A)), 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)(A) of the Federal Reserve Act (12 
U.S.C. 461(b)(2)(A)) 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),’’. 
SEC. 5. TRANSFER OF FEDERAL RESERVE SURPLUSES. 
(a) IN GENERAL.—Section 7(b) of the Federal Re-
serve Act (12 U.S.C. 289(b)) is amended by adding at 
the end the following new paragraph: 
‘‘(4) ADDITIONAL
TRANSFERS
TO
COVER
IN-
TEREST
PAYMENTS
FOR
FISCAL
YEARS
2003 
THROUGH 2007.—
‘‘(A) IN
GENERAL.—In addition to the 
amounts required to be transferred from the 
surplus funds of the Federal reserve banks pur-
suant to subsection (a)(3), the Federal reserve