In a last-ditch effort, the American Bankers Association asked the Federal Reserve Board Friday to reconsider its decision to deny regulatory approval of interest-bearing corporate checking accounts.
ABA said the Fed erred when it ruled July 10 that only Congress may authorize banks to offer money market deposit accounts that permit more than six withdrawals per month. The ABA had wanted to circumvent the ban on interest-bearing corporate checking accounts by linking a noninterest- bearing checking account to an interest-bearing money market account. But for the product to work, the Fed had to create a money market account that permitted up to 24 withdrawals per month.
The ABA argued its petition required only a small change in current policy, was consistent with Congress' intent, and was necessary to protect the health of the industry.
"Congressional action to make the statutory change could take years," ABA chief lobbyist Edward L. Yingling wrote. "Instead of having the industry experience such delay, the board could and should act now."