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STATEMENT BY WILLIAM A. FITZGERALD, CHAIRMAN, AMERICA’S COMMUNITY BANKERS, ON PASSAGE OF H.R. 4067, WHICH REPEALS THE BAN ON BANKS PAYING INTEREST ON BUSINESS CHECKING ACCOUNTS:
America’s Community Bankers, as a long-time supporter of repealing the Depression-era prohibition on banks paying interest to their business customers, applauds House adoption of H.R. 4067. ACB has been pursuing this much-needed reform since 1996, after member banks complained that the alternative to interest-bearing accounts was complex and costly "sweep" operations. For far too long, community banks have been prevented from offering interest on business checking accounts, weakening their competitive position and denying small businesses the same opportunities larger corporations are afforded to earn interest on their idle corporate funds. ACB has worked closely with Rep. Jack Metcalf (R-Wash.) and House Banking Committee Chairman Jim Leach (R-Iowa) to bring about passage of the legislation. ACB favors repeal of the prohibition without further delay. However, in order to move the bill, ACB supported a provision that implements the repeal three years after enactment and, on an interim basis, permits 24 transfers a month between a business checking account and an interest-bearing account within the bank. ACB supports S. 576, which would permit interest to be paid on business checking accounts as of Jan. 1, 2001.
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