Number: RL30816
Title: The Anticipated Effects of Depository Institutions Paying Interest on Checking Accounts
Authors: Walter W. Eubanks, Government and Finance Division 
Abstract: On January 4, 2007, the Business Checking Fairness Act of 2007 (H.R. 41) was introduced in the 110th Congress by Representative Nydia Velazquez. This bill would repeal the prohibition on depository institutions paying interest on any checking accounts and require bank regulators to conduct surveys of bank fees and services, including automated teller machines (ATMs) and credit card transactions. H.R. 41 was referred to the House Committee on Financial Services. Similar legislation was considered in previous Congresses. This report examines the rationale for the prohibition, describes the effects it has had including the development and regulatory approval of measures to mitigate those effects, and concludes with an analysis of the anticipated effects of repealing the prohibition on depository institutions, on their customers, and on the conduct of monetary policy.
Pages: 8
Date: April 11, 2007