WASHINGTON The House Financial Services financial institutions subcommittee has scheduled a vote for Wednesday on legislation that would let banks pay interest on business checking accounts as early as next year and expand sweep accounts in the interim.
One bill under consideration would, a year after enactment, repeal a Depression-era prohibition on interest-bearing commercial checking accounts. Rep. Melissa A. Hart, R-Pa., is expected to offer an amendment Wednesday that would delay the effective date until three years after enactment.
The bill, sponsored by Reps. Pat Toomey, R-Pa., and Paul E. Kanjorski, D-Pa., is expected eventually to be merged with one introduced by Rep. Sue Kelly, R-N.Y. Her bill would quadruple the number of times banks could sweep funds overnight from non-interest-bearing commercial checking accounts into interest-bearing accounts, to 24 per month.
Many banks use sweep accounts as a way to get around the ban on paying interest for business checking balances.
Rep. Kellys bill also would authorize the government to pay interest on required and excess reserves that banks and thrifts deposit with the Federal Reserve.
It would also let the central bank adjust the level of required reserves.
Separately, the financial institutions and capital markets subcommittees are planning a joint hearing, tentatively scheduled for April 4, on the Feds merchant banking rule and related capital proposal.
The financial institutions panel also has tentatively scheduled a hearing for April 5 on a controversial proposal that would let banks act as real estate brokers.
