Full text of Federal Reserve Bank of New York Circulars : 7485. "NOW" Accounts

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

FEDERAL RESERVE BANK
OF NEW YORK

I" Circular No. 7485-1
October 23, 1974 -I

L

“ NOW ” ACCOUNTS
Removal of 150-Item Per-Year Limitation

To All Member Banks, and Others Concerned,
in the Second Federal Reserve District:

Effective October 17, 1974, the Board of Governors of the Federal Reserve System amended
its Regulation Q, “ Interest on Deposits,” to remove the 150-item limitation 0 11 the number of
Negotiable Orders of Withdrawal (N O W s ) that may be accepted by a member bank in Massachu­
setts or New Hampshire in any one year.
In submitting the amendment for publication in the Federal Register, the Board of Governors
made the following statement:
E ffective January 1, 1974, the B oard of G overnors amended R egulation Q (In terest on D eposits) to p re­
scribe rules governing the use of N egotiable O rders o f W ithdraw al
N ew H am pshire as authorized by section 2 ( a )

(N O W s )

within

Massachusetts and

of P .L . 93-100. These rules include a limitation on the num ­

ber of N O W s that may be accepted by a member bank from a custom er to 150 per year. N O W accounts in
other institutions have not been made subject to an item limitation.
Since the adoption o f N O W account amendments to Regulation Q , the B oard of G overn ors and the other
Federal financial supervisory agencies have conducted a surveillance program designed to m onitor N O W
account activity. Data received for the first eight months o f N O W activity in M assachusetts and N ew H am p ­
shire since Federal regulations were adopted indicate that N O W account activity has developed in a gradual
manner w ithout the wholesale conversion of checking accounts to N O W accounts. O n the basis o f its evalu­
ation o f current N O W account data and pursuant to P .L . 93-100 and the B oard ’s authority under section 19
of the Federal Reserve A ct to prescribe rules governing the payment o f interest on deposits, the B oard has
amended R egulation Q to rem ove the 150 per year limitation on the number o f N O W s that may be accepted
from a custom er by a member bank. A s a result o f this action, member banks and N O W

depositors will be

permitted to amend existing N O W account deposit agreements to rem ove item limitation provisions.
T here was no notice, public participation and deferred effective date with respect to this amendment
because such procedure w ould result in delay that w ou ld be contrary to the public interest and serve no
useful purpose. See §262.2 ( e ) of the B oard’s Rules o f P rocedure (1 2 C F R § 2 6 2 .2 ( e ) ) .

Enclosed is a copy of the amendment to Regulation Q ; additional copies will be furnished
upon request.




A

lfred

H

ayes

,

President.




Board of Governors of the Federal Reserve System

INTEREST ON DEPOSITS

AM ENDM ENT TO REGULATION Q

Effective O ctober 17, 1974, subparagraph (3 )
o f section 2 1 7 .5 (c ) is amended to read as
fo llo w s :
S E C T I O N 217.5— W I T H D R A W A L O F
S A V IN G S D E P O S IT S
*

*

*

( c ) M an ner o f p a y m en t o f savings deposits.
(1 )
S ubject to the provisions o f subpara­
graphs ( 2 ) and ( 3 ) o f this paragraph, * * *
*

*

*

(3 )
T h e provisions o f this paragraph do not
apply to deposits subject to negotiable orders
of withdrawal authorized by Federal law to be
issued in the states o f Massachusetts and N ew
Ham pshire.
*
*
*

PR IN TE D IN N E W YORK