The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
FEDERA L RESERVE BANK OF DALLAS
DALLAS. TEXAS
75222
Circular No. 80-140
July 16, 1980
TITLE 12 - CHAPTER XII - INTEREST ON DEPOSITS
Proposed Interest Rate Ceiling on Interest-bearing Transaction Accounts;
Withdrawals at Savings and Loans from IRA and Keogh Accounts;
Change in Effective Date for Restrictions Regarding Premiums.
TO ALL MEMBER BANKS
AND OTHERS CONCERNED IN THE
ELEVENTH FEDERAL RESERVE DISTRICT:
The Depository Institutions Deregulation Committee has requested public
comment on several proposed interest rate ceiling changes involving interest-bearing
transaction accounts, such as NOW accounts, automatic transfer accounts, or telephone
transfer accounts. Interested parties are invited to submit comments by August 4,
1980, to Norman R. V. Bernard, Executive Secretary, Depository Institutions De
regulation Committee, Federal Reserve Building, 20th Street and Constitution Avenue,
N.W., Washington, D.C. 20551.
The committee also took the following actions:
1.
Effective July 2, it made the rules governing withdrawals from
Individual Retirem ent Accounts (IRA) and Keogh Accounts the same
for accounts held at savings and loan associations and accounts held
at banks.
2.
Set December 31, 1980, as the effective date for any action it might
take to restrict or eliminate premiums or gifts given to depositors.
Premiums, gifts, and finders fees may continue to be given at least
until that date.
3.
Denied a request to make changes, at this time, in the six-month
Money Market Certificate, which would have given it some char
acteristics of a money market mutual fund share.
4.
Took no action on a petition to eliminate the differential ceiling
rates on time and savings accounts applying to banks and thrift
institutions in Rhode Island.
The press release and Federal Register documents are printed on the
following pages.
Questions concerning these m atters should be directed to the
Consumer Affairs Section of the 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 ATS 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)
DEPOSITORY INSTITUTIONS DEREGULATION COMMITTEE
[12 CFR Part 1204]
(Docket No. D-0011)
Notice of Proposed Rulemaking
Ceiling Rates on Interest-Bearing Transaction Accounts
AGENCY:
Depository Institutions Deregulation Committee.
ACTION:
Proposed rulemaking.
SUMMARY: The Depository Institutions Deregulation Committee ("Committee")
proposes to adopt rules, effective December 31, 1980, concerning the
maximum rate of interest payable on interest-bearing transaction accounts.
In order to provide competitive equality among depository institutions
consistent with the legislative intent of Title II of the Depository
Institutions Deregulation and Monetary Control Act of 1980 (Public Law 96
221, 94 Stat. 142 (12 U.S.C. 3501 et seq.)), the Committee proposes
to establish a uniform ceiling rate on all interest-bearing transaction
accounts at commercial banks, mutual savings banks, and savings and
loan associations. In addition, in order to facilitate the conduct
of monetary policy, the Committee desires to encourage depositors to
segregate transaction balances from balances that are inactive, and
thus proposes to establish a ceiling rate on transaction accounts that
is below the ceiling rate payable on nontransaction savings deposits
at commercial banks and thrift institutions. The Committee is considering
defining interest-bearing transaction accounts as those accounts that
will be subject to transaction account reserve requirements under the
Federal Reserve's Regulation D. In this regard, the Federal Reserve
has proposed to define the following as transaction accounts: negotiable
order of withdrawal accounts (NOWs); savings accounts subject to automatic
transfers (ATS), telephone transfers (TTS), and pre-authorized nonnegotiable
transfers (PNTS); or savings accounts which permit payments to third
parties by means of an automated teller machine (ATM), remote service
unit (RSU) or other electronic device.
DATE:
Comments must be received by August 4, 1980.
ADDRESS: Normand R. V. Bernard, Executive Secretary, Depository Institutions
Deregulation Committee, Federal Reserve Building, 20th Street and Constitution
Avenue, N.W., Washington, D.C. 20551. All material submitted should
include the Docket Number D-0011. Such material will be made available
for inspection and copying upon request except as provided in section 1202.5
of the Committee's Rules Regarding Availability of Information (12 CFR
1202.5).
-2 FOR FURTHER INFORMATION CONTACT: Nancy Feldman, Associate General Counsel,
Federal Home Loan Bank Board (202/377-6440), Debra Chong, Attorney,
Office of the Comptroller of the Currency (202/447-1632), F. Douglas
Birdzell, Senior Attorney, Federal Deposit Insurance Corporation (202/389
4324), Anthony F. Cole, Senior Attorney, Board of Governors of the Federal
Reserve System (202/452-3612), or Allan Schott, Attorney-Advisor, Treasury
Department (202/566-6798).
SUPPLEMENTARY INFORMATION: Title III of the Depository Institutions
Deregulation and Monetary Control Act of 1980 (the "Act") authorizes
all depository institutions nationwide except credit unions to offer
NOW accounts to individuals and certain nonprofit organizations effective
December 31, 1980. The Act also permanently authorizes, effective April 1,
1980, federally insured commercial banks and mutual savings banks to
offer ATS accounts to individuals and Federal savings and loan associations
to establish RSUs for the purpose of crediting and debiting savings.
The ceiling rate of interest payable on NOW accounts by those institutions
already authorized to offer such accounts has been 5 per cent since
January 1, 1974. A uniform ceiling applicable to these institutions
was established by the Federal financial regulatory agencies in view
of legislative history which indicated that all depository institutions
should be able to offer NON accounts on the same terms in the interest
of competitive equality. As provided in Title XVI of the Financial
Institutions Regulatory and Interest Rate Control Act of 1978 (Public
Law 95-630) , the ceiling rate of interest payable on ATS accounts for
all institutions authorized to offer such accounts must be no greater
than the ceiling rate applicable to savings deposits at commercial banks.
The current ceiling for ATS accounts is 5-1/4 per cent. Commercial
banks may currently offer TTS, PNTS, and accounts from which payments
may be made by ATMs/RSUs at a ceiling rate of 5-1/4 per cent. Thrift
institutions currently may offer such accounts at a ceiling rate of
5-1/2 per cent.
The Committee believes the provisions of the Act and of the legis
lative history indicate the Congressional intent for rate parity over time
on all interest-bearing transaction accounts at all depository institutions.
Moreover, because NOW, ATS, TTS, PNTS, and ATM/RSU accounts all may be used
as transaction accounts, the Committee proposes to establish a uniform ceiling
applicable to all such accounts. The Committee proposes to treat as
transaction accounts for the purposes of ceiling rate limitations those
accounts that the Federal Reserve determines are subject to Federal reserve
requirements as transaction accounts under Regulation D. In this regard, it
should be noted that the Federal Reserve has invited comments by July 15
(45 Fed. Reg. 38388) on a proposal to amend Regulation D (Reserve Requirements
of Depository Institutions). The proposal defines transaction accounts
to include, among others, TTS, PNTS, and ATM/RSU accounts, but invites
-3 comment on the feasibility and desirability of exempting from transaction
reserve requirements such accounts that are limited to a minimal number
of transfers per month— perhaps one or two.
The Committee believes that establishing a uniform ceiling
on transaction accounts is a move toward competitive equality among
depository institutions in furtherance of the Congressional intent.
In addition, in order to encourage depositors to segregate transaction
balances from balances that are inactive and to aid the conduct of monetary
policy by facilitating interpretation of movements in the monetary aggregates,
the Committee proposes to establish a uniform transaction account ceiling
rate that is below the ceiling rates payable on nontransaction savings
deposits at commercial banks and thrift institutions. Under the proposals,
the ceiling rate on all interest-bearing transaction accounts would
be below the ceiling rate of interest payable on nontransaction
savings accounts at commercial banks.
The Committee requests comment on four alternative options
for the level of the ceiling rate of interest payable on transaction
accounts. The first three options would establish a uniform ceiling
rate on all transaction accounts at 5, 5-1/4, or 5-1/2 per cent. The
fourth alternative option would establish a ceiling rate higher than
5-1/2 per cent on transaction accounts. Under Option 1, there would
be no increase in current ceiling rates applicable to savings or fixedceiling time deposits. However, the other three options would require
an increase in the ceiling rates currently payable on savings accounts
since the Committee proposes to establish a ceiling rate on transaction
accounts that is below the ceiling rate payable on nontransaction
savings accounts at commercial banks. In addition, adoption of one
of these three options would require similar increases in the ceiling
rates of interest payable on fixed-ceiling time deposits in order to
maintain the relationships embodied in the current ceiling rate structure.
Comments specifically are requested on: (1) the appropriateness
of a spread between the ceiling rates on transaction accounts and nontrans
action savings accounts; ( ) the appropriateness of increasing the entire
2
fixed-ceiling time deposit rate structure if the savings ceiling rate
is raised; and (3 the cost effects on depository institutions of each
)
of these options.
OPTION 1 — ESTABLISH A 5 PER CENT CEILING FOR ALL
INTEREST-BEARING TRANSACTION ACCOUNTS
An uniform ceiling at 5 per cent would encourage the separation
of transaction accounts from nontransaction savings accounts and would
facilitate the conduct of monetary policy. This option also would minimize
the short-term reduction in earnings of depository institutions associated
-4with the nationwide introduction of NOW accounts on pecember 31, 1980,
and would not require a change in the existing ceiling rate on savings
accounts. This option, however, would require a 1/4 point reduction
of the ceiling rate of interest payable on ATS, TTS, PNTS, and AIM third
party payment accounts at commercial banks, and a 1/2 point reduction
of the ceiling rate payable on TTS, PNTS and HSU third party payment
accounts at thrift institutions.
OPTION 2 — ESTABLISH A 5-1/4 PER CENT CEILING FOR ALL
INTEREST-BEARING TRANSACTION ACCOUNTS
Under this option, to ensure the separation of transaction
accounts from nontransaction savings accounts, the ceiling rate of interest
on nontransaction savings accounts would be raised to 5-1/2 per cent
at commercial banks and 5-3/4 per cent at thrift institutions. However,
no change in the ceiling on ATS accounts (presently 5-1/4) would be
required. The ceiling rate on NOW accounts (presently 5 per cent) would
be increased by 1/4 point and the ceiling rate on TTS, PNTS, and RSU
third party payment accounts at thrift institutions would be lowered
by 1/4 point. In order to maintain the current relationships among
the rate ceilings on savings deposits and the various maturity categories
of fixed-ceiling time deposits, as well as the existing differentials
between ceiling rates at commercial banks and those at thrifts, the
ceiling rates on fixed-ceiling time deposits would be raised by 1/4
point.
OPTION 3 — ESTABLISH A 5-1/2 PER CENT CEILING FOR ALL
INTEREST-BEARING TRANSACTION ACCOUNTS
Under this option, to ensure the separation of transaction
accounts from nontransaction savings accounts, the ceiling rate of interest
on nontransaction savings accounts would be raised to 5-3/4 per cent
at commercial banks and 6 per cent at thrift institutions. The ceiling
rates on ATS accounts and NOW accounts would be raised 1/4 per cent
and 1/2 per cent, respectively.
The ceiling rate on TTS, PNTS,
and
ATM third party payment accounts at commercial banks would be increased
by 1/4 point, while no change in the ceiling rate on TTS, PNTS,
and
RSU third party payment accounts at thrifts would be required.
The
ceiling rates on all fixed-ceiling time deposits also would be increased
by 1/2 point.
The following table summarizes the current interest rate ceilings
on savings and fixed-ceiling time deposits and the ceilings under the
first three options.
-5 -
Commercial banks
Current and
Option 1
Option 2 Option 3
Account type
Savings and loan associations
and mutual savings banks____
Current and
Option 1
Option 2 Option 3
6
5-3/4
5-1/4
5-1/2
5-3/4
5-1/2
30 to 89 days
5-1/4
5-1/2
5-3/4
Generally not available
90 days to 1 year
5-3/4
6
6-1/4
6
6-1/4
6- 1/2
1 to 2-1/2 years
6
6-1/4
6- 1/2
6- 1/2
6-3/4
7
2-1/2 to 4 years
6- 1/2
6-3/4
7
6-3/4
7
7-1/4
4 to 6 years
7-1/4
7-1/2
7-3/4
7-1/2
7-3/4
8
6 to 8 years
7-1/2
7-3/4
8
7-3/4
8
8-1/4
8 years and over
7-3/4
8
8-1/4
8
8-1/4
8- 1/2
Savings
Fixed-ceiling time
accounts by
maturity:
OPTION 4 — ESTABLISH A CEILING HIGHER THAN 5-1/2 PER CENT
FOR ALL INTEREST-BEARING TRANSACTION ACCOUNTS
Establishing a ceiling higher than 5-1/2 per cent would avoid
or minimize the reduction in ceilings on certain interest-bearing transaction
accounts required under either Options 1 or 2. Such action would provide
depository institutions with greater scope to price transaction accounts
in line with their individual market position, customer needs and convenience,
and portfolio positions. If the existing structure of fixed-ceiling
deposit rates is to be maintained, however, this option would require
significant upward adjustment in all other ceiling rates.
By order of the Committee, June 25, 1980.
Normand R. V. Bernard
Executive Secretary of the Committee
Federal Register / Vol. 45, No. 129 / Wednesday, July 2, 1980 / Rules and Regulations
DEPOSITORY INSTITUTIONS
DEREGULATION COMMITTEE
12 CFR P art 1204
IDocket No. D-0010)
Early Withdrawal from IRA and Keogh
Accounts; Interest on Deposits
AGENCY: D epository In stitutions
D eregulation Comm ittee.
ACTION: Final rule.
SUMMARY: T h e D epository In stitutions
D eregulation C om m ittee ("C o m m itte e” )
h a s a d o p te d a rule providing th a t a
p en alty n eed not be a p p lied to a
w ith d ra w a l from a n IRA or Keogh
account time d ep o sit prior to the
m atu rity of the account, if the o w n e r is
d is a b le d o r age 59! 2 or over. T h e rule
applies to all com m ercial b unks, mutual
savings b an k s, a n d savings a n d loan
institutions su b ject to the a u th o rities
con ferred b y sectio n 19(j) o f the F ed e ra l
R eserv e Act, sectio n 18(g) of the F ed eral
D eposit In s u ra n c e A ct a n d sec tio n 5B(a)
of the F e d eral H o m e Loan Bank Act. T h e
rule is co n siste n t w ith existing rules of
the F ed eral R eserv e S y stem ( “F e d e ra l
R ese rv e ” ) a n d the F e d e ral D eposit
In s u ran ce C o rp o ratio n ("FDIC” ). T he
rules of th e F ed eral H o m e Loan Bank
B oard ("FHLBB") p erm it e x em p tio n from
a n early w ith d r a w a l p e n a lty for IRA
a n d Keogh a c c o u n ts only if w ith d r a w a l
is m a d e to effect a distrib u tio n of the
account. T h e rule a d o p te d b y the
C om m ittee co n fo rm s th e rules o f the
FHLBB to the existin g ru le s o f the
F e d eral R eserv e a n d th e FDIC.
EFFECTIVE DATE: July 2,1980.
FOR FURTHER INFORMATION CONTACT:
John R. Hall, A sso c ia te G e n e ra l
Counsel. F e d e ra l H o m e L o an B ank
B oard (202/377-6450), D e b ra Chong,
A ttorney, Office o f the C o m p tro ller of
the C u rren cy (202/447-1632), F. D ouglas
Birdzell, S en io r A tto rn e y , F e d e ra l
D eposit In s u ra n c e C o rp o ra tio n (202/
389-4324), A n th o n y F. Cole, S enior
A ttorney, F e d e ra l R eserv e B o ard (202/
452-3612), or A llan Schott, A tto rn e y A dvisor, T re a s u r y D e p a rtm e n t (202/566
6798).
SUPPLEMENTARY INFORMATION:
R egulations ap p licab le to F ed erally
regu lated d e p o sito ry institu tio n s
ge n e ra lly require th a t a p enalty, in the
form of d e c r e a s e d or forfeited earnings,
b e a p p lied w h e n an y w ith d r a w a l of
fu n d s from a time d ep o sit o ccurs prior to
m a tu rity of the account. U n d e r the rules
a n d re g u latio n s of the F ed e ra l'R e s e rv e
a n d the FDIC, (12 CFR 217.4(d) an d
329.4(d)), a m e m b e r b a n k or a n FDICin su re d b a n k m a y p a y a time deposit
before m a tu rity w ith o u t p enalty, if the
d e p o sit re p r e s e n ts funds c o n trib u ted to
an Individual R etirem ent A ccount or a
Keogh (H.R. 10) plan a n d w ith d r a w a l
o ccu rs afte r the individual for w h o se
benefit the account is m a in ta in e d
a tta in s age 59 or is d isabled. U nder
reg u lations of the FHLBB (12 CFR
526.7(c)), a pen alty -free w ith d r a w a l of
IRA o r K eogh time d ep o sit funds is
p erm itted w h en the d e p o sito r a tta in s
age 59 V o f is d is a b le d only if such
2
w ith d r a w a l is m a d e to effect a ta x a b le
distrib u tion of funds in the account.
T h e C o m m ittee believes it is
a p p ro p ria te that, w ith reg ard to early
w ith d r a w a l p enalties, retirem ent
a c co u n t o w n e rs receive equivalent
tre a tm e n t in all F ederally-regulated
d e p o sito ry institutions. F urther, the
C o m m ittee b eliev es that an y w ith d ra w a l
from an IRA or Keogh acc o u n t after the
o w n e r is d is a b le d or age 5 9 V2 should be
eligible for exem p tio n from p en a lty for
e a rly w ith d ra w a l, reg ard le ss of w h e th e r
the w ith d r a w a l is m a d e to effect a
ta x a b le distribution. Therefore, the
C om m ittee h a s d ete rm in e d to a d o p t a
rule c o n siste n t w ith the rule previously
a d o p te d by the F ed eral R eserve a n d the
FDIC. T he C om m ittee b eliev es tha t such
a lib eral rule e n c o u ra g e s retirem ent
sa v in g s by providing m a x im u m
flexibility for retirem en t savers.
B ecause the C o m m ittee b elie v e s tha t
e q u al tr e a tm e n t of retirem en t sa v e rs in
all ty p e s of d e p o sito ry institutions
sh o u ld b e a c h ie v e d a s soon a s possible,
the C o m m ittee finds th a t n otice a n d
public p ro c e d u re w ith re s p e c t to the rule
is co n tra ry to the public in te re s t an d
u n n e c e s s a ry u n d e r the provisions o f 5
U.S.C. 553(b); a n d since p u b licatio n of
the a m e n d m e n t for the time specified in
5 U.S.C. 553(d) prior to its effective d a te
w o u ld d elay im p lem en ta tio n of the rule,
an d , for the re a s o n s d e s c r ib e d above,
d e la y is u n n e c e s s a ry a n d c o n tra ry to the
public interest, the C om m ittee h a s
d e te rm in e d th a t the rule shall beco m e
effective a s h e re in set forth.
P u rsu a n t to its a u th o rity u n d e r T itle II
of Public L aw 96-221, 94 Stat. 142 (12
U .S .G 3501 e t seq.), to p res c rib e rules
governing the p a y m e n t o f in te re s t a n d
d iv id e n s on d ep o sits of fed erally in su red
co m m ercial b a n k s, sav in g s a n d loan
*44919
a ss o c ia tio n s a n d m u tu a l sav in g s b an k s,
effective June 2,1980, the C om m ittee
a m e n d s P a rt 1204 (Interest on D eposits)
b y ad d in g sectio n 107 a s follows:
PART 1204—INTEREST ON DEPOSITS
§ 1204.107 Early Withdrawal of IRA and
Keogh Accounts.
A d e p o sito ry institution su b ject to the
a u th o rities c o n ferred by sectio n 19(j) of
the F ed eral R eserv e A ct (12 U.S.C.
(371b), section 18(g) of the F ederal
D eposit In s u ra n c e A ct (12 ULSLC.)
1828(g)), or section 5B(a) of the F ederal
H om e Loan B ank A ct (12 U.S.C.
1425b(a)) m a y p a y a time deposit or
ce rtific a te a cco u n t before m aturity
w ithout a reduction or forfeiture of
earnings if the time d ep o sit or certificate
account re p re se n ts an Individual
R etirem ent A cco u n t or a Keogh (H.R. 10)
plan e sta b lis h e d u n d e r 26 U.S.C. 408 or
401, a n d the individual for w h o se benefit
the acco u n t is m a in ta in e d h a s a tta in e d
age 59M> or is d isa b le d (as defined in 26
U.S.C. 72(m)(7)).
By o r d e r o f t h e C o m m i t t e e J u n e 25. 1 9 8 0
N o rm a n d R. V. B ernard ,
Executive Secretary o f the Committee
|KR Due: AO-191HO Kllnd 7 -1 -8 0 : 8 45 .im |
BILLING CODE 6210-01-M
DEPOSITORY INSTITUTIONS DEREGULATION COMMITTEE PRESS RELEASE
COMPTROLLER OF THE CURRENCY
FEDERAL DEPOSIT INSURANCE CORPORATION
FEDERAL HOME LOAN BANK 30 A R D
FEDERAL RESERVE BOARD_____________ NATIONAL CREDIT UNION ADMINISTRATION______________ TREASURY DEPARTMENT
For immediate release
June 30, 1980
The Depository Institutions Deregulation Committee today requested
public comment on a series of possible realignments of interest rate ceilings
on interest-bearing transaction accounts--such as NOW (negotiable orders of
withdrawal) and ATS (automatic transfer service) accounts at banks and thrift
institutions.
At the same time, the Committee announced other actions affecting
withdrawals at savings and loan associations from Individual Retirement Accounts
(IRAs) and Keogh accounts (in which individuals save for retirement)j the effective
date
for any restrictive actions the Committee might take on the use of premiums,
gifts and finders fees in connection with deposit accounts; a congressional
suggestion for revision of the six-month Money Market Certificate, and a petition
for the elimination in Rhode Island of the differential
between the ceiling rates
that banks and thrift institutions may pay on certain time and savings accounts.
The Committee made its proposals respecting interest-bearing transaction
accounts with the objective
of providing competitive equality among depository
institutions through parity among the ceiling rates applying to all such accounts at
all types of depository institutions.
The Committee asked for comment on these proposals by August 4, 1980,
and said that it would consider its proposals, in the light of comment received,
at a meeting on September 9.
Any action taken would be effective December 31,
1980.
The Committee proposed to consider as interest-bearing transaction
accounts those accounts that will be subject to transaction
account reserve requirements under the Federal Reserve's Regulation D.
The
Federal Reserve has proposed to define the following as transaction accounts:
negotiable orders of withdrawal (NOW accounts), savings accounts subject to
automatic transfer arrangements (ATS accounts), telephone transfers (TTS) and
pre-authorized nonnegotiable transfers (PNTS), or accounts which permit payments to
third parties by means of an automated teller machine (ATM), remote service unit
(RSU) or other electronic device.
The Committee's proposals provide, in the interests of competitive
equality among depository institutions, a uniform ceiling rate on all interestbearing transaction accounts at commercial banks, mutual savings banks and savings
and loan associations.
Further, in the interests of facilitating the conduct
of monetary policy the Committee desires to encourage depositors to differentiate
between active and inactive interest-bearing deposits by establishing a ceiling
rate that is higher for nontransaction savings accounts than for savings accounts
that may be used as transaction accounts.
The Depository Institutions Deregulation and Monetary Control Act of
1980 (which established the Deregulation Committee) authorizes nationwide issuance
of NOW
accounts effective December 31, 1980 by all depositories except credit
unions, and, effective April 1, 1980, the issuance of ATS accounts for individuals
by commercial banks and mutual savings banks and the establishment of RSU accounts
by Federally insured savings and loans associations for the crediting and debiting
of savings.
The following table shows the current interest rate ceilings on savings
accounts and on those accounts the Committee proposes to regard as interestbearing transaction accounts, and sets forth three alternative optional realignments
that might be made in the interests of parity among the various types of accounts
-3 and competitive equality among depository institutions.
These options are
described in detail in the attached Federal Register notice of these proposals.
Structure of Interest Rate Ceilings on Interest-Bearing
Transaction Accounts and Passbook Savings
Accounts at Federally Insured Depository Institutions
and Three Optional Realignments
Current
ceiling
Option
1
Option
2
Option
3
5-1/4
5 *
5-1/4
5-1/4
5-1/4
5-1/A
5
5
5
5
5-1/2
5-1/4
5-1/4
5-1/4
5-1/4
5-3/4
5-1/2
5-1/2
5-1/2
5-1/2
5-1/2
5 *
5-1/4
5-1/2
5-1/2
5-1/2
Types of Accounts
5-1/2
5
5
5
5
5
5-3/4
5-1/4
5-1/4
5-1/4
5-1/4
5-1/4
6
5-1/2
5-1/2
5-1/2
5-1/2
5-1/2
Commercial banks
Savings
NOW
ATS
TTS
PNTS
Savings and loan associations
and mutual savings banks
Savings
NOW
ATS
TTS
PNTS
RSU
*In New England, New York, and New Jersey.
The Comnittee also requested comment on a fourth option that would
establish a uniform ceiling rate on interest-bearing transaction accounts above
5-1/2 percent.
The Committee also:
1.
Decided effective July 2 to make the rules governing withdrawals
from Individual Retirement Accounts (IRAs) and Keogh accounts the same in the
case of accounts held at savings and loan associations as for such accounts
held at banks.
This eliminates a difference in the rules that made funds with
drawn from such retirement accounts at savings and loan associations before
-4 -
macurity after the account holder reaches age 59-1/2 or is disabled subject
to penalty for early withdrawal if
other than distribution
2.
the funds were withdrawn for any
(retention for the account owner's
purpose
use).
Decided that any action it might take to restrict or eliminate
premiums or gifts given by financial institutions in connection with deposits
would not become effective before December 31, 1980.
The Committee proposed on May 6 to abolish premiums or gifts in
connection with the opening of newdeposit accounts or additions
accounts.
The Committee has asked
to existing
for comment through July 16.
The Committee also proposed in May that finders fees be limited to
cash payments and be regarded as interest paid to the depositor.
Any action
taken by the Committee to put this proposal into effect would also not be
effective before December 31, 1980.
The Committee's decision means that premiums, gifts and finders fees
may continue to be given under present rules at least through December 30, 1980.
The Committee plans, tentatively, to consider its May proposals, in
the light of comment received, at a meeting scheduled for September 9.
3.
Decided to notify Congressmen Fernand J. St Germain and Jerry M.
Patterson that the Committee does not believe it advisable at this time to
adopt proposals made by them for changes in the six-month Money Market Certificate
that would give the MMC some characteristics of a money market mutual fund share.
4.
Decided to take no action at this time on a petition from banks
in Rhode Island for the elimination in that State of the differential ceiling
rates on time and savings accounts applying to banks and thrift institutions.
Attachements
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