Business Checking Freedom Act of 2005

Bill: 109-hr-1224
Sponsor: Rep. Kelly, Sue W. [R-NY-19]
Introduced: 2005-03-10 in the House
Policy area: Finance and Financial Sector
Subjects: Administrative procedure
Automated teller machines
Bank accounts
Bank capital
Bank deposits
Bank reserves
Checks
Commerce
Congress
Congressional reporting requirements
Credit cards
Credit unions
Deposit insurance
Dividends
Electronic commerce
Electronic funds transfers
Federal Reserve System
Fees
Financial institutions
Financial services
Foreign Trade and International Finance
Foreign banks and banking
Government Operations and Politics
Government paperwork
Housing and Community Development
Interest
Interest rates
Internet
Law
Real estate business
Savings and loan associations
Science, Technology, Communications
Surveys
User charges

Summary:
action_date: 2005-03-10
text: 
Business Checking Freedom Act of 2005 - Amends Federal law to authorize interest-bearing or dividend-bearing transaction accounts for all businesses, permitting up to 24 transfers per month to another account of the owner in the same institution. 
Amends the Federal Reserve Act, the Home Owners' Loan Act, and the Federal Deposit Insurance Act to repeal the prohibition against the payment of interest on demand deposits.
 
 Authorizes the payment of interest on reserves by a Federal reserve bank at least quarterly on balances maintained there on behalf of a depository institution.
 
Amends the Federal Reserve Act to require the Board to survey annually and report to Congress on bank fees and certain services.
 
 Amends the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, and the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, to repeal certain reporting requirements.
 
Amends the Federal Reserve Act to revise the ratio of reserves a depository institution must maintain against its transaction accounts, permitting a ratio of zero.
 
Directs the Federal reserve banks to deposit additional surplus funds into the general fund of the Treasury for FY 2005 through 2009 equal to the estimated annual net revenue loss.
 
Prohibits such banks, during FY 2005 through 2009, from replenishing their respective surplus funds by the amount of any such transfer made to cover interest payments. 

action_date: 2005-05-16
text: 
 Business Checking Freedom Act of 2005 - (Sec. 2) Amends Federal law to authorize interest-bearing transaction accounts for all businesses, permitting up to 24 transfers per month (or any greater number the Federal Reserve Board may determine) to another account of the owner in the same institution.
 
Conditions payment of interest on Business Now Accounts upon a determination by the appropriate State bank supervisor that an industrial loan company or industrial bank is not a nonqualified industrial loan company, that is, a company controlled directly or indirectly by a commercial firm. Defines commercial firm as any entity at least 15 percent of the annual gross revenues of which on a consolidated basis, including all its affiliates, were derived from engaging, on an on-going basis, in activities that are not financial in nature or incidental to a financial activity during at least three of the prior four calendar quarters.
 
Excludes from the meaning of nonqualified industrial loan company (thus grandfathering) any commercial firm-controlled industrial loan company, industrial bank, or other specified institution which became an insured depository institution before October 1, 2003, or pursuant to an application for deposit insurance approved by the Federal Deposit Insurance Corporation before such date.
 
(Sec. 3) Amends the Federal Reserve Act, the Home Owners' Loan Act, and the Federal Deposit Insurance Act to repeal the prohibition against the payment of interest on demand deposits. Makes such repeal effective two years from the date of enactment.
 
(Sec. 4) Authorizes the payment of interest on reserves by a Federal reserve bank at least quarterly on balances maintained there on behalf of a depository institution.
 
Amends the Federal Reserve Act to require the Board to survey annually and report to Congress on bank fees and services including: (1) checking and other transaction accounts; (2) negotiable order of withdrawal and savings accounts; (3) automated teller machine transactions; and (4) other electronic transactions. Sets forth minimum survey requirements for each such account or transaction. Requires the survey to address minimum balance requirements as well as fees.
 
Requires the Board to report annually to Congress on the survey results.
 
Amends the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, to repeal certain reporting requirements.
 
(Sec. 5) Amends the Federal Reserve Act to revise the ratio of reserves a depository institution must maintain against its transaction accounts, permitting a ratio of zero.
 
(Sec. 6) Directs the Federal reserve banks to deposit additional surplus funds into the general fund of the Treasury for FY 2005 through 2009 equal to the estimated annual net revenue loss associated with allowing interest payments on required reserve balances.
 
Prohibits such banks, during FY 2005 through 2009, from replenishing their respective surplus funds by the amount of any such transfer made to cover interest payments. 

action_date: 2005-05-24
text: 
Business Checking Freedom Act of 2005 - (Sec. 2) Authorizes interest-bearing transaction accounts for all businesses, permitting up to 24 transfers per month (or any greater number the Federal Reserve Board may determine) to another account of the owner in the same institution.
 
Conditions payment of interest on the Business Now Accounts of corporations, business partnerships, or other business entities upon a determination by the appropriate State bank supervisor that an industrial loan company or industrial bank is not a nonqualified industrial loan company, that is, a company controlled directly or indirectly by a commercial firm. Defines commercial firm as any entity at least 15 percent of the annual gross revenues of which on a consolidated basis, including all its affiliates, were derived from engaging, on an on-going basis, in activities that are not financial in nature or incidental to a financial activity during at least three of the prior four calendar quarters.
 
Excludes from the meaning of nonqualified industrial loan company (thus grandfathering) any commercial firm-controlled industrial loan company, industrial bank, or other specified institution which became an insured depository institution before October 1, 2003, or pursuant to an application for deposit insurance approved by the Federal Deposit Insurance Corporation before such date.
 
(Sec. 3) Amends the Federal Reserve Act, the Home Owners' Loan Act, and the Federal Deposit Insurance Act to repeal the prohibition against the payment of interest on demand deposits. Makes such repeal effective two years from the date of enactment.
 
(Sec. 4) Authorizes the payment of interest on reserves by a Federal reserve bank at least quarterly on balances maintained there on behalf of a depository institution.
 
Amends the Federal Reserve Act to require the Board to survey annually and report to Congress on bank fees and services including: (1) checking and other transaction accounts; (2) negotiable order of withdrawal and savings accounts; (3) automated teller machine transactions; and (4) other electronic transactions. Sets forth minimum survey requirements for each such account or transaction. Requires the survey to address minimum balance requirements as well as fees.
 
Requires the Board to report annually to Congress on the survey results.
 
Amends the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 to repeal certain reporting requirements.
 
(Sec. 5) Amends the Federal Reserve Act to revise the ratio of reserves a depository institution must maintain against its transaction accounts, permitting a ratio of zero.
 
(Sec. 6) Directs the Federal reserve banks to deposit additional surplus funds into the general fund of the Treasury for FY2005-2009 equal to the estimated annual net revenue loss associated with allowing interest payments on required reserve balances.
 
Prohibits such banks, during FY2005-2009, from replenishing their respective surplus funds by the amount of any such transfer made to cover interest payments.


Legislative actions:
action_date: 2005-05-26
text: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
action_date: 2005-05-25
text: Received in the Senate.
action_date: 2005-05-24
text: Motion to reconsider laid on the table Agreed to without objection.
action_date: 2005-05-24
text: On motion to suspend the rules and pass the bill, as amended Agreed to by the Yeas and Nays: (2/3 required): 424 - 1 (Roll no. 206). (text: CR 5/23/2005 H3738-3740)
action_date: 2005-05-24
text: Passed/agreed to in House: On motion to suspend the rules and pass the bill, as amended Agreed to by the Yeas and Nays: (2/3 required): 424 - 1 (Roll no. 206).(text: CR 5/23/2005 H3738-3740)
action_date: 2005-05-24
text: Considered as unfinished business. (consideration: CR H3852-3853)
action_date: 2005-05-23
text: At the conclusion of debate, the Yeas and Nays were demanded and ordered. Pursuant to the provisions of clause 8, rule XX, the Chair announced that further proceedings on the motion would be postponed.
action_date: 2005-05-23
text: DEBATE - The House proceeded with forty minutes of debate on H.R. 1224.
action_date: 2005-05-23
text: Considered under suspension of the rules. (consideration: CR H3839-3840)
action_date: 2005-05-23
text: Mrs. Kelly moved to suspend the rules and pass the bill, as amended.
action_date: 2005-05-16
text: Placed on the Union Calendar, Calendar No. 41.
action_date: 2005-05-16
text: Reported (Amended) by the Committee on Financial Services. H. Rept. 109-81.
action_date: 2005-05-16
text: Reported (Amended) by the Committee on Financial Services. H. Rept. 109-81.
action_date: 2005-04-27
text: Ordered to be Reported (Amended) by Voice Vote.
action_date: 2005-04-27
text: Committee Consideration and Mark-up Session Held.
action_date: 2005-03-10
text: Referred to the House Committee on Financial Services.
action_date: 2005-03-10
text: Introduced in House
action_date: 2005-03-10
text: Introduced in House