text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Small Business Interest Checking Act 
  of 2001''.
  
  SEC. 2. INTEREST-BEARING TRANSACTION ACCOUNTS AUTHORIZED.
  
      (a) Repeal of Prohibition on Payment of Interest on Demand 
  Deposits.--
              (1) Federal reserve act.--Section 19(i) of the Federal 
          Reserve Act (12 U.S.C. 371a) is amended to read as follows:
      ``(i) [Repealed]''.
              (2) Home owners' loan act.--The first sentence of section 
          5(b)(1)(B) of the Home Owners' Loan Act (12 U.S.C. 
          1464(b)(1)(B)) is amended by striking ``savings association may 
          not--'' and all that follows through ``(ii) permit any'' and 
          inserting ``savings association may not permit any''.
              (3) Federal deposit insurance act.--Section 18(g) of the 
          Federal Deposit Insurance Act (12 U.S.C. 1828(g)) is amended to 
          read as follows:
      ``(g) [Repealed]''.
      (b) Effective Date.--The amendments made by subsection (a) shall 
  take effect at the end of the 2-year period beginning on the date of 
  the enactment of this Act.
  
  SEC. 3. INTEREST-BEARING TRANSACTION ACCOUNTS AUTHORIZED FOR ALL 
                BUSINESSES.
  
      Section 2 of Public Law 93-100 (12 U.S.C. 1832) is amended--
              (1) in subsection (a), by adding at the end the following 
          new paragraph:
              ``(3) Exception from paragraph (2) limitation.--Paragraph 
          (2) shall not apply to any depository institution which is 
          prohibited by the applicable law of its chartering State from 
          offering demand deposits and either--
                      ``(A) does not engage in any lending activities; or
                      ``(B) is not an affiliate of any company or 
                  companies with assets that, in the aggregate, represent 
                  more than 10 percent of the total assets of the 
                  depository institution.'';
              (2) by redesignating subsections (b) and (c) as subsections 
          (c) and (d), respectively; and
              (3) by inserting after subsection (a) the following:
      ``(b) Notwithstanding any other provision of law, any depository 
  institution may permit the owner of any deposit or account which is a 
  deposit or account on which interest or dividends are paid and is not a 
  deposit or account described in subsection (a)(2) to make up to 24 
  transfers per month (or such greater number as the Board may determine 
  by rule or order), for any purpose, to another account of the owner in 
  the same institution. Nothing in this subsection shall be construed to 
  prevent an account offered pursuant to this subsection from being 
  considered a transaction account (as defined in section 19(b) of the 
  Federal Reserve Act for purposes of such Act).''.
  
  SEC. 4. PAYMENT OF INTEREST ON RESERVES AT FEDERAL RESERVE BANKS.
  
      (a) In General.--Section 19(b) of the Federal Reserve Act (12 
  U.S.C. 461(b)) is amended by adding at the end the following new 
  paragraph:
              ``(12) Earnings on reserves.--
                      ``(A) In general.--Balances maintained at a Federal 
                  reserve bank by or on behalf of a depository 
                  institution may receive earnings to be paid by the 
                  Federal reserve bank at least once each calendar 
                  quarter at a rate or rates not to exceed the general 
                  level of short-term interest rates.
                      ``(B) Regulations relating to payments and 
                  distribution.--The Board may prescribe regulations 
                  concerning--
                              ``(i) the payment of earnings in accordance 
                          with this paragraph;
                              ``(ii) the distribution of such earnings to 
                          the depository institutions which maintain 
                          balances at such banks or on whose behalf such 
                          balances are maintained; and
                              ``(iii) the responsibilities of depository 
                          institutions, Federal home loan banks, and the 
                          National Credit Union Administration Central 
                          Liquidity Facility with respect to the 
                          crediting and distribution of earnings 
                          attributable to balances maintained, in 
                          accordance with subsection (c)(1)(B), in a 
                          Federal reserve bank by any such entity on 
                          behalf of depository institutions.''.
      (b) Authorization for Pass Through Reserves for Member Banks.--
  Section 19(c)(1)(B) of the Federal Reserve Act (12 U.S.C. 461(c)(1)(B)) 
  is amended by striking ``which is not a member bank''.
      (c) Survey of Bank Fees and Services.--Section 19 of the Federal 
  Reserve Act (as amended by subsections (a) and (b) of this section) is 
  amended by adding at the end the following new subsection:
      ``(n) Survey of Bank Fees and Services.--
              ``(1) Annual survey required.--The Board shall obtain 
          annually a sample, which is representative by type and size of 
          the institution and geographic location, of the following 
          retail banking services and products provided by insured 
          depository institutions and insured credit unions (along with 
          related fees and minimum balances):
                      ``(A) Checking and other transaction accounts.
                      ``(B) Negotiable order of withdrawal and savings 
                  accounts.
                      ``(C) Automated teller machine transactions.
                      ``(D) Other electronic transactions.
                      ``(E) Credit Cards.
              ``(2) Minimum survey requirement.--The annual survey 
          described in paragraph (1) shall meet the following minimum 
          requirements:
                      ``(A) Checking and other transaction accounts.--
                  Data on checking and transaction accounts shall 
                  include, at a minimum, the following:
                              ``(i) Monthly and annual fees and minimum 
                          balances to avoid such fees.
                              ``(ii) Minimum opening balances.
                              ``(iii) Check processing fees.
                              ``(iv) Check printing fees.
                              ``(v) Balance inquiry fees.
                              ``(vi) Fees imposed for using a teller or 
                          other institution employee.
                              ``(vii) Stop payment order fees.
                              ``(viii) Nonsufficient fund fees.
                              ``(ix) Overdraft fees.
                              ``(x) Deposit items returned fees.
                              ``(xi) Availability of no-cost or low-cost 
                          accounts for consumers who maintain low 
                          balances.
                      ``(B) Negotiable order of withdrawal accounts and 
                  savings accounts.--Data on negotiable order of 
                  withdrawal accounts and savings accounts shall include, 
                  at a minimum, the following:
                              ``(i) Monthly and annual fees and minimum 
                          balances to avoid such fees.
                              ``(ii) Minimum opening balances.
                              ``(iii) Rate at which interest is paid to 
                          consumers.
                              ``(iv) Check processing fees for negotiable 
                          order of withdrawal accounts.
                              ``(v) Check printing fees for negotiable 
                          order of withdrawal accounts.
                              ``(vi) Balance inquiry fees.
                              ``(vii) Fees imposed for using a teller or 
                          other institution employee.
                              ``(viii) Stop payment order fees for 
                          negotiable order of withdrawal accounts.
                              ``(ix) Nonsufficient fund fees for 
                          negotiable order of withdrawal accounts.
                              ``(x) Overdraft fees for negotiable order 
                          of withdrawal accounts.
                              ``(xi) Deposit items returned fees.
                              ``(xii) Availability of no-cost or low-cost 
                          accounts for consumers who maintain low 
                          balances.
                      ``(C) Automated teller transactions.--Data on 
                  automated teller machine transactions shall include, at 
                  a minimum, the following:
                              ``(i) Annual and monthly fees.
                              ``(ii) Card fees.
                              ``(iii) Fees charged to customers for 
                          withdrawals, deposits, transfers between 
                          accounts, balance inquiries through 
                          institution-owned machines.
                              ``(iv) Fees charged to customers for 
                          withdrawals, deposits, transfers between 
                          accounts, balance inquiries through machines 
                          owned by others.
                              ``(v) Fees charged to noncustomers for 
                          withdrawals, deposits, transfers between 
                          accounts, balance inquiries through 
                          institution-owned machines.
                              ``(vi) Point-of-sale transaction fees.
                              ``(vii) Surcharges.
                      ``(D) Other electronic transactions.--Data on other 
                  electronic transactions shall include, at a minimum, 
                  the following:
                              ``(i) Wire transfer fees.
                              ``(ii) Fees related to payments made over 
                          the Internet or through other electronic means.
                      ``(E) Credit card charges and fees.--Data related 
                  to credit cards shall include, at a minimum, the 
                  following:
                              ``(i) Application fees.
                              ``(ii) Annual and monthly fees.
                              ``(iii) Rates of interest charged for 
                          purchases and cash advances, when an account is 
                          not in default.
                              ``(iv) Rates of interest charged for 
                          purchases and cash advances, when an account is 
                          in default.
                              ``(v) Average annual finance charges paid 
                          by customers.
                              ``(vi) Late payment fees.
                              ``(vii) Cash advance and convenience check 
                          fees.
                              ``(viii) Balance transfer fees.
                              ``(ix) Over-the-credit-limit fees.
                              ``(x) Foreign currency conversion fees.
                      ``(F) Other fees and charges.--Data on any other 
                  fees and charges that the Board determines to be 
                  appropriate to meet the purposes of this section.
              ``(3) Annual Report to Congress Required.--
                      ``(A) Preparation.--The Board shall prepare a 
                  report of the results of each survey conducted pursuant 
                  to paragraph (1) and (2).
                      ``(B) Contents of the report.--In addition to the 
                  data required to be collected pursuant to paragraphs 
                  (1) and (2), each report prepared pursuant to 
                  subparagraph (A) shall include a description of any 
                  discernible trend, in the Nation as a whole, in each of 
                  the 50 States, and in each metropolitan statistical 
                  area (as defined by the Director of the Office of 
                  Management and Budget), in the cost and availability of 
                  the retail banking services, including those described 
                  in paragraphs (1) and (2) (including related fees and 
                  minimum balances), that delineates differences between 
                  institutions on the basis of the type of institution, 
                  the size of the institution and any engagement of the 
                  institution in multistate activity.
                      ``(C) Submission to congress.--The Board shall 
                  submit an annual report to the Congress under this 
                  paragraph not later than June 1, 2002, and not later 
                  than June 1 of each subsequent year.
              ``(4) Definitions.--For purposes of this subsection, the 
          terms `insured depository institution' and `insured credit 
          union' mean any depository institution (as defined in 
          subsection (b)(1)(A)) the deposits or shares in which are 
          insured under the Federal Deposit Insurance Act or the Federal 
          Credit Union Act.''.
      (d) Technical and Conforming Amendments.--Section 19 of the Federal 
  Reserve Act (12 U.S.C. 461) is amended--
              (1) in subsection (b)(4) (12 U.S.C. 461(b)(4)), by striking 
          subparagraph (C) and redesignating subparagraphs (D) and (E) as 
          subparagraphs (C) and (D), respectively; and
              (2) in subsection (c)(1)(A) (12 U.S.C. 461(c)(1)(A)), by 
          striking ``subsection (b)(4)(C)'' and inserting ``subsection 
          (b)''.
  
  SEC. 5. INCREASED FEDERAL RESERVE BOARD FLEXIBILITY IN SETTING RESERVE 
                REQUIREMENTS.
  
      Section 19(b)(2)(A) of the Federal Reserve Act (12 U.S.C. 
  461(b)(2)(A)) is amended--
              (1) in clause (i), by striking ``the ratio of 3 per 
          centum'' and inserting ``a ratio not greater than 3 percent 
          (and which may be zero)''; and
              (2) in clause (ii), by striking ``and not less than 8 per 
          centum,'' and inserting ``(and which may be zero),''.
  
  SEC. 6. TRANSFER OF FEDERAL RESERVE SURPLUSES.
  
      (a) In General.--Section 7(b) of the Federal Reserve Act (12 U.S.C. 
  289(b)) is amended by adding at the end the following new paragraph:
              ``(4) Additional transfers to cover interest payments for 
          fiscal years 2002 through 2006.--
                      ``(A) In general.--In addition to the amounts 
                  required to be transferred from the surplus funds of 
                  the Federal reserve banks pursuant to subsection 
                  (a)(3), the Federal reserve banks shall transfer from 
                  such surplus funds to the Board of Governors of the 
                  Federal Reserve System for transfer to the Secretary of 
                  the Treasury for deposit in the general fund of the 
                  Treasury, such sums as are necessary to equal the net 
                  cost of section 19(b)(12), as estimated by the Office 
                  of Management and Budget, in each of the fiscal years 
                  2002 through 2006.
                      ``(B) Allocation by federal reserve board.--Of the 
                  total amount required to be paid by the Federal reserve 
                  banks under subparagraph (A) for fiscal years 2002 
                  through 2006, the Board of Governors of the Federal 
                  Reserve System shall determine the amount each such 
                  bank shall pay in such fiscal year.
                      ``(C) Replenishment of surplus fund prohibited.--
                  During fiscal years 2002 through 2006, no Federal 
                  reserve bank may replenish such bank's surplus fund by 
                  the amount of any transfer by such bank under 
                  subparagraph (A).''.
      (b) Technical and Conforming Amendment.--Section 7(a) of the 
  Federal Reserve Act (12 U.S.C. 289(a)) is amended by adding at the end 
  the following new paragraph:
              ``(3) Payment to treasury.--During fiscal years 2002 
          through 2006, any amount in the surplus fund of any Federal 
          reserve bank in excess of the amount equal to 3 percent of the 
          paid-in capital and surplus of the member banks of such bank 
          shall be transferred to the Secretary of the Treasury for 
          deposit in the general fund of the Treasury.''.
  
  SEC. 7. RULE OF CONSTRUCTION.
  
      No provision of this Act, or any amendment made by this Act, shall 
  be construed as creating any presumption or implication that, in the 
  case of an escrow account maintained at a depository institution in 
  connection with a real estate transaction--
              (1) the absorption, by the depository institution, of 
          expenses incidental to providing a normal banking function with 
          respect to such escrow account;
              (2) the forbearance, by the depository institution, from 
          charging a fee for providing any such banking function; and
              (3) any benefit which may accrue to the holder or the 
          beneficiary of such escrow account as a result of an action of 
          the depository institution described in paragraph (1) or (2),
  may be treated as the payment or receipt of interest for purposes of 
  any provision of Public Law 93-100, the Federal Reserve Act, the Home 
  Owners' Loan Act, or the Federal Deposit Insurance Act relating to the 
  payment of interest on accounts or deposits at depository institutions.
  
              Passed the House of Representatives April 3, 2001.
  
              Attest:
  
                                                   JEFF TRANDAHL,
  
                                                                   Clerk.
target: Small Business Interest Checking Act of 2001- Amends the Federal Reserve Act, the Home Owners' Loan Act, and the Federal Deposit Insurance Act to repeal the proscription against payment of interest on demand deposits.Authorizes certain depository institutions prohibited by State law from offering demand deposits to offer all owners of a interest- or dividend-paying deposit or account to make withdrawals by negotiable or transferable instruments for the purpose of making payments to third parties. Requires that such an institution either: (1) not engage in lending activities; or (2) not be an affiliate of a company or companies whose aggregate assets represent over ten percent of the institution's total assets.Amends Federal banking law governing interaccount transfers to provide that a depository institution may permit owners of certain interest- or dividend-paying accounts to make up to 24 transfers monthly for any purpose to their other accounts in the same institution.Amends the Federal Reserve Act to authorize a Federal reserve bank to pay interest at least quarterly (at a rate not to exceed the general level of short term interest rates) to a depository institution on any balance it maintains at the reserve bank.Repeals a specified restriction in order to authorize pass-through reserves for member banks (as well as non-member banks).Instructs the Board of Governors of the Federal Reserve System to obtain annually a prescribed survey of designated retail bank fees and services (including electronic and credit card fees), and report the results annually to Congress.Reformulates the mandatory depository institution reserve ratio to: (1) one that is not greater than three percent, and may be zero, (currently, a flat ratio of three percent) for transaction accounts of $25 million or less; and (2) reduce from eight percent to zero the minimum ratio for transaction accounts exceeding $25 million. (Thus authorizes zero reserve requirements for such accounts.)Requires the Federal Reserve banks to transfer certain surplus funds for deposit into the general fund of the Treasury equal to the estimated net cost of making the quarterly payments of interest mandated by this Act for FY 2002 through 2006.Prohibits such banks from replenishing surplus funds by the amount of any such transfers during that time period.
feat_title: To repeal the prohibition on the payment of interest on demand deposits, to increase the number of interaccount transfers which may be made from business accounts at depository institutions, to authorize the Board of Governors of the Federal Reserve System to pay interest on reserves, and for other purposes.