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Federal Reserve Bank of Dallas

January 1983

‘Super NOW’ Accelerates Deregulation Trend
Recent steps toward deregulation of
the banking industry continued to gain
momentum December 6 as the
Depository Institutions Deregulation
Committee (DIDC) established a new
“Super NOW Account” for banks and
savings and loan associations and
eliminated ceilings and reduced
minimum denominations on other,
already-existing accounts.
Authorized for January 5, the new
super NOW account has many of the
same features as the money market
deposit account which banks and sav­
ings and loans were allowed to offer
beginning December 14. The major dif­
ference between the two is that the
new NOW account allows unlimited
checking and other transactions and is
therefore subject to the same reserve
requirments as other types of transac­
tion accounts. The money market
deposit account is limited to six
preauthorized and third-party transfers
each month. The DIDC decided
December 6 that all telephone
transfers would count toward the total
of six allowed transactions.
The super NOW account has no in­
terest rate ceiling as long as a
minimum balance of $2,500 is main­
tained. The existing NOW account ceil­
ing of 5 1/4 percent applies to accounts
that do not maintain this minimum.
The average balance may be computed
over a period of no longer than one
month, and interest rates may not be
guaranteed by the institution for more
than one month. Institutions offering
the account must reserve the right to

require seven days notice prior to
withdrawal. Loans are not permitted to
meet the $2,500 initial or average
balance requirements. Eligibility for
the new NOW accounts is limited to
the current list of those eligible for
NOW accounts, which includes in­
dividuals, certain nonprofit corpora­
tions and govenmental units.
Also effective January 5, the DIDC
eliminated interest rate ceilings on the
7- to 31-day deposit account estab­
lished earlier in 1982. The committee
reduced the required minimum
denominations to $2,500 each for the
7-to 31- day account, the 91-day cer­

tificate, and the 26-week money market
c e rtific a te . Previously, minimum
denominations had been $20,000 for
the 7- to 31-day account, $7,500 for the
91-day certificate, and $10,000 for the
26-week money market certificate.

• Salary Surveys
• Clearing Accounts
• New Directors

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (

Discount Rate
Continues to
It had been four years since the
Federal Reserve discount rate
was 8.5 percent. That rate, which
again became effective at the
Dallas Fed December 14, is the
rate financial institutions are
charged for borrowing funds from
Federal Reserve Banks. The
reduction was the seventh half­
point decrease this year, begin­
ning with the July 20 lowering of
the rate from 12 to 11.5 percent.

ACH Prices
The Federal Reserve Board recently
announced a new fee schedule for the
automated clearinghouse service
which was effective December 30. The
new prices announced are designed to
recover 40 percent of current Fed costs
plus a private sector adjustment factor
which takes into account imputed
taxes and financing costs which would
have been incurred by a private firm.
This step is part of an overall plan to
phase out “ incentive pricing” of ACH
services by 1985.
The new prices include intra-ACH
per-item charges of two cents for
debits originated and four cents for
credits received, and inter-ACH
charges of 3.5 cents per item for debits
originated and 5.5 cents per item for
credits received. In New York, intraACH per-item charges are one cent for
debits originated and two cents for
credits received, and inter-ACH
charges are 2.5 cents per item for
debits originated and 3.5 cents per
item for credits received. In addition,
there is a night cycle surcharge of five
cents per item at all ACH facilities for
intra- and inter-ACH debits originated.

11th District Salary Survey
Results Available for 1982
The average chief executive officer’s
salary was $65,929 in 1982 for those
banks who participated in the Dallas
Fed’s Officers’ Salary Survey which
was published in December. This
survey, along with the Employees’
Salary Survey, is published each year
with both member and nonmember
banks in the Eleventh Federal Reserve
D is tric t given the chance to
In addition to the chief executive of­
ficer position, the Officers’ Salary
Survey provides data on loan officers,
trust officers, planning officers, con­
trollers and branch managers among
o th e r o ffic ia l p o s itio n s . The
Employees’ Salary Survey provides in­
formation on such positions as paying
and receiving tellers, clerks, machine
operators, bookkeepers, programmers,
custodians, and other categories of
tellers and secretaries.
The surveys provide information on
the average, maximum and minimum
salaries for 31 official positions and 28
employee positions. Compensation in
addition to salaries is also reported. In
addition to averages reported for all
participating banks in the Eleventh

District, the information is compiled
according to each of nine geographic
areas and according to each of six
deposit size categories.
The Officers’ Salary Survey, for ex­
ample, indicates an average chief ex­
ecutive officer’s salary of $65,929
across the Eleventh District in 1982,
compared to $55,270 reported for this
position in the 1981 survey. Chief ex­
ecutive officers’ salaries ranged from a
minimum of $12,000 to a maximum of
$325,000. Persons in these positions
had an average 19 years of banking ex­
perience, with seven years in the chief
executive position. These positions
also included an average bonus of
$13,648, average profit sharing of
$6,273, average insurance benefits of
$2,485, and average retirem ent
benefits of $6,464. The average
salaries of chief executive officers ac­
cording to total deposit size of the
bank are shown in a graph accompany­
ing this article.
Additional copies of the 1982
Officers’ Salary Survey and Em­
ployees’ Salary Survey are available
upon request to the Public Affairs

Clearing Accounts Allow Access to Services
7wo changes regarding clearing ac­
counts were announced recently by the
Federal Reserve. The first permits any
depository institution desiring a clearing
account to have one. Procedures for offer­
ing the accounts had varied widely among
Reserve Banks, with some allowing ac­
counts only for institutions that have zero
or small reserve balances and others allow­
ing accounts for some larger banks as well.
The second change involves a revision
designed to avoid penalty charges for defi­
ciencies in a required clearing account. A
penalty-free range has been established on
either side of the required clearing balance.
Any financial institution whose account
falls within the specified limits will con­
tinue to receive earnings credits and will
not incur penalties for deficiencies.

Clearing accounts are established
by financial institutions as a means of
access to Federal Reserve services.
These accounts are used by institu­
tions who do not want service charges
applied to their reserve accounts at the
Fed or do not have sufficient reserve
account balances for this purpose. The
Federal Reserve System was autho­
rized to establish clearing accounts for
eligible institutions with the passage
of the Monetary Control Act (MCA) of
1980 in conjunction with the initial pric­
ing of Fed services. Currently, 79 finan­
cial institutions in the Eleventh District
hold clearing accounts.
An institution may elect to settle the

credits and charges arising from its
use of services in one of the following
ways: (1) through its own account at a
Reserve Bank which may consist of a
reserve account and/or a clearing ac­
count; or (2) through prior arrangement
of an account maintained by a cor­
respondent at a Reserve Bank.
A clearing account can receive earn­
ings credits if agreed to by both the
Federal Reserve and the institution.
These credits can only be used to off­
set charges an institution incurs in its
use of Fed services. The rate of credit
received is based on the weekly
average Fed funds rate—the rate com­
mercial banks charge each other for
overnight use of funds in amounts of
$1 million or more—and is applied to
the actual balance maintained or the
e s ta b lis h e d c le a rin g balance,
whichever is lower. If available earn­
ings credits exceed the Federal
Reserve charges incurred during a
given month, unused credits will ac­
cumulate for use in later months.
Credits are retained for a maximum of
52 weeks, and are applied against ser­
vice charges on a first-in, first-out
basis. If these credits are not used by
the end of 52 weeks, they expire. Earn­
ings credits are not transferrable
among accounts.
Other than the earnings credit
feature, a clearing account is similar to
a reserve account. As a result of the

MCA, reserve requirements for many
institutions were altered and some
were required to hold zero or very small
reserve balances. Because an institu­
tion’s reserve account is also used as
an account to which charges are
posted resulting from use of Fed ser­
vices, those institutions with zero or
small accounts faced overdrafts and
the associated costs. In order to
facilitate access for these institutions
to Federal Reserve services, the clear­
ing account system was developed to
cover charges resulting from the use of
If an institution has a reserve and a
clearing account at the Federal
Reserve, both accounts are ad­
ministered as a single account. At the
end of each weekly maintenance
period, any balances held with the Fed
will first be allocated to the clearing
account requirement, and the re­
mainder will apply to the required
reserve balance. For example, if an in­
stitution holds an average total
balance that is less than the required
balance—clearing account plus re­
quired reserves—the institution is defi­
cient in reserves. If the deficiency is
greater than required reserves, the re­
maining amount is considered a defi­
cient clearing balance. If the total
balance exceeds the required balance,
the institution is considered to be
holding excess reserves.

How a Clearing Account Works
A clearing account balance is negotiated between the Fed and the financial institution (1). Earnings credits are received at the weekly Fed
funds rate on the actual or established balance, whichever is lower (2). Monthly service charges are applied to the account (3). Any unused
credits may be accumulated up to one year (4).

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Directors Appointed to Board
Appointments to the Board of Direc­
tors for the Head Office and the
Branches of the Federal Reserve Bank
of D allas for 1983 have been
Robert D. Rogers, president of Texas
Industries, Inc. of Dallas, was ap­
pointed by the Board of Governors to
replace Margaret S. Wilson whose term
expired December 31. Rogers joins
Robert Ted Enloe, III, and John P.
Gilliam whose elections to the Head
O ffic e Board were p re v io u s ly
Directors for the Branch Offices are
either appointed by the Federal
Reserve Bank of Dallas or by the Board
of Governors. The Board appointed
S. Lee Ware, Jr., a private investor in oil
and real estate ventures in Ruidoso,
New Mexico, to the El Paso Branch
Board. It also named Robert T.
Sakowitz, president and chief ex­
ecutive officer of Sakowitz, Inc. in

Houston, to serve as a director for the
Houston Branch. Serving as director
for the San Antonio Branch will be
Robert F. McDermott, chairman and
chief executive officer of United Ser­
vices Automobile Association in San
Reappointments made by the Dallas
Fed for the Branch Offices include:
Will E. Wilson, chairman of the board
and chief executive officer of First
Security Bank of Beaumont, to serve
on the Houston Board; George
Brannies, chairman of the board and
president of The Mason National Bank,
to serve on the San Antonio Board; and
Stanley J. Jarmiolowski, chairman of
the board of InterFirst Bank El Paso, to
serve on the El Paso Board.
Directors, who serve three-year
terms, are selected to represent a
broad range of interests.

New Advisory
Council Chosen
Three Texas residents have
been appointed by the Federal
Reserve Board to serve on its
Consumer Advisory Council.
Appointed to three-year terms
were: James G. Boyle of Austin, a
consumer law specialist and a
director of the Texas Consumer
Association; Charles C. Holt of
Austin, a professor of manage­
ment at the University of Texas
and director of the University's
Bureau of Business Research;
and Elva Quijano of San Antonio,
vice president and executive pro­
fessional officer of RepublicBank
San Antonio.
The council advises the Board
on consumer financial protection
laws and other topics of con­
sumer interest.

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