The Federal Deposit Insurance Corp. plans to make it easier for the banks it supervises to keep up with competitors overseen by the Federal Reserve Board.
Any exemptions the Fed makes to rules banning interest on demand deposits would automatically be available to banks regulated by the FDIC, according to a proposal that is out for comment until Dec. 15.
The FDIC regulates state banks that do not belong to the Fed and insured branches of foreign banks. The FDIC is reacting to a May 15 rule in which the Fed allowed member banks to pay account holders premiums of $10 for balances up to $5,000, and $20 for balances over that level.
The FDIC issued an identical rule, but not before 10 weeks had passed and FDIC-regulated banks were at a competitive disadvantage, the agency explained.