WASHINGTON Having easily cleared a House Financial Services subcommittee on Wednesday, legislation to let banks pay interest on business checking accounts and temporarily expand their use of sweep accounts is tentatively scheduled for a vote by the full committee next week.
The financial institutions subcommittee unanimously adopted legislation that would repeal a Depression-era prohibition on interest-bearing commercial checking accounts one year after the bill is enacted.
As a compromise with opponents of a repeal, Rep. Melissa A. Hart, R-Pa., is planning to offer an amendment next week to postpone the repeal until three years after enactment. Rep. Melvin Watt, D-N.C., plans to offer amendment that would require banks to pay interest on property tax and insurance escrow accounts.
The subcommittee also unanimously approved another bill, sponsored by Rep. Sue Kelly, R-N.Y., that would quadruple the number of times banks could sweep funds from noninterest-bearing commercial checking accounts into interest-bearing ones, to 24 per month. The approval came after an amendment to gut the measure was withdrawn.
The Financial Services Committee is expected to merge the checking interest bill with Rep. Kellys measure, which also would authorize the government to pay interest on required and excess reserves that banks and thrifts deposit with the Federal Reserve, and let the central bank adjust the level of required reserves.