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Home > News & Events > Press Releases

Press Release
April 06, 2011

Federal Reserve seeks comment on proposed
rule to repeal Regulation Q, which prohibits the
payment of interest on demand deposits
For immediate release
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The Federal Reserve Board on Wednesday requested comment on a
proposed rule to repeal the Board's Regulation Q, which prohibits the
payment of interest on demand deposits by institutions that are member
banks of the Federal Reserve System.
The proposed rule would implement Section 627 of the Dodd-Frank Wall
Street Reform and Consumer Protection Act, which repeals Section 19(i)
of the Federal Reserve Act in its entirety effective July 21, 2011. The
repeal of that section of the Federal Reserve Act on that date eliminates
the statutory authority under which the Board established Regulation Q.
The proposed rule would also repeal the Board's published
interpretation of Regulation Q and would remove references to
Regulation Q found in the Board's other regulations, interpretations, and
commentary.
The Board is seeking comment on whether the repeal of Regulation Q is
expected to have implications for balance sheets and income of
depository institutions, short-term funding markets such as overnight
federal funds market, the demand for interest-bearing demand deposits,
and competitive burden on smaller depository institutions.
Comments on the proposal must be submitted within 30 days from the
date of publication in the Federal Register, which is expected shortly.

Federal Register notice: HTML | PDF (61 KB)
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Last Update: April 06, 2011

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