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F ederal reserve Bank DALLAS, TEXAS of Dallas 75222 Circular No. 80-109 M a y 30, 1980 REGULATION Q INTEREST ON DEPOSITS Announcement o f R ate for Two and One-Half Year Money Market C ertificate of Deposit TO ALL MEMBER BANKS AND OTHERS CONCERNED IN THE ELEVENTH FEDERAL RESERVE DISTRICT: Beginning January 1, 1980, member banks were permitted to offer a non-negotiable tim e deposit with a maturity of two and one-half years or more at a rate tied to the average two and one-half year yield on United States Treasury securities. The Depository Institutions Deregulation Com m ittee, which has authority to set rate lim its on tim e and savings deposits for all financial institutions, has adopted a number o f final regulations effe c tiv e June 2, 1980, which a ffe c t these tim e deposits. The Deregulation C om m ittee has adopted a nominal ceiling of 9.25% for com m ercial banks and 9.50% for thrift institutions to go along with the recently adopted ceiling maximums o f 11.75% and 12.00%, respectively. Any tim e the treasury rate falls below 9.50%, the bank ceiling will be 9.25% although banks can offer the tim e deposit at a lower rate. In addition, the ceiling rate for the two and one-half year tim e deposit will change every two weeks rather than monthly. The new rate will be established bi-weekly each Monday and will be e ffe c tiv e the following Thursday. For the period from June 2 through June 11, the ceiling rate o f 9.25% is authorized for com m ercial banks. Additional details concerning the new regulation will be provided in subsequent circulars. Questions regarding Regulation Q should be directed to the Consumer Affairs Section of our Bank Supervision and Regulations Department, Ext. 6171. Sincerely yours, Robert H. Boykin First Vice President Banks and others are encouraged to use the following incoming W A T S numbers in contacting this Bank: 1-800-442-7140 (intrastate) and 1-800-527-9200 (interstate). For calls placed locally, please use 651 plus the extension referred to above. This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
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