[Federal Register Volume 61, Number 150 (Friday, August 2, 1996)]
[Notices]
[Pages 40419-40420]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-19555]
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FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL
Interagency Policy Statement Regarding Advertising of NOW
Accounts
AGENCIES: Office of the Comptroller of the Currency (OCC), Department
of the Treasury; Board of Governors of the Federal Reserve System
(FRB); Federal Deposit Insurance Corporation (FDIC); Office of Thrift
Supervision (OTS), Department of the Treasury.
ACTION: Withdrawal of statement of policy.
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SUMMARY: The OCC, FRB, FDIC, and OTS (the Agencies) are withdrawing
their joint statement of policy entitled ``Interagency policy statement
regarding advertising of Negotiable Order of Withdrawal (NOW)
Accounts'' (the Statement) on the ground that it is obsolete.
EFFECTIVE DATE: The removal of the Statement of Policy is effective
August 2, 1996.
FOR FURTHER INFORMATION CONTACT:
OCC: Paul Utterback, National Bank Examiner, (202/874-5461), 250 E
Street, S.W., Washington, D.C. 20219.
FRB: J. Ericson Heyke III, Staff Attorney, (202/452-3688), 20th and C
Streets, N.W., Washington, D.C. 20551.
[[Page 40420]]
FDIC: Marc J. Goldstrom, Counsel, (202/898-8807), Legal Division, 550-
17th St., N.W., Washington, D.C. 20429.
OTS: Richard Blanks, (202/906-7037), Counsel (Banking and Finance),
Office of Thrift Supervision, 1700 G Street, N.W., Washington, D.C.
20552.
SUPPLEMENTARY INFORMATION: ``NOW accounts'' are, in essence, interest-
bearing checking accounts. Federal law expressly authorizes depository
institutions to offer such accounts:
* * * [A] depository institution is authorized to permit the
owner of a deposit or account on which interest or dividends are
paid to make withdrawals by negotiable or transferable instruments
for the purpose of making transfers to third parties.
12 U.S.C. 1832(1).1
\1\ The authorization only applies to certain accounts, however:
namely, those that belong to natural persons, to nonprofit
organizations, and to public units. See 12 U.S.C. 1832(2).
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At first, Congress only allowed such withdrawals to be made in
Massachusetts and New Hampshire. Act of August 16, 1973, Public Law 93-
100, section 2, 87 Stat. 342. Congress extended this permission to
other states over the next several years. Act of February 27, 1976,
Public Law 94-222, section 2, 90 Stat. 197 (Connecticut, Rhode Island,
Maine, and Vermont); Financial Institutions Regulatory and Interest
Rate Control Act of 1978, Public Law 95-630, section 1301, 92 Stat.
3641, 3712 (1978) (New York); Act of December 28, 1979, Public Law 96-
161, section 106, 93 Stat. 1233, 1235 (New Jersey). Congress finally
discarded geographic restrictions entirely, effective December 31,
1980. See Depository Institutions Deregulation and Monetary Control Act
of 1980, Public Law 96-221, section 303, 94 Stat. 132, 146 (1980).
During these years, the various Agencies had well-established and
long-standing rules governing the advertising of interest paid on
deposits. See Regulation Q, 12 CFR 217.6 (1980) (issued by the FRB, and
applicable to all member banks, including national banks); id.
Sec. 329.8 (issued by the FDIC, and applicable to insured state
nonmember banks); id. Sec. 526.6 (issued by the Federal Home Loan Bank
Board, and applicable to any member of a Federal Home Loan Bank, except
an FDIC-insured savings bank, or an institution in Guam) and
Sec. 563.27 (issued by the Federal Savings and Loan Insurance
Corporation, and applicable to all institutions insured by that
entity).
The Statement says that it is intended to ``remind'' depository
institutions that, when they advertise the interest-rates that they pay
on NOW accounts, they must comply with these rules. 45 FR 67464 (1980).
This aspect of the Statement has become obsolete. Congress has
adopted the Truth-In-Savings Act (TISA). Federal Deposit Insurance
Corporation Improvement Act of 1991, Public Law 102-242, 261-74, 105
Stat. 2236, 2334-43 (Dec. 19, 1991); 12 U.S.C. 4301-13. The TISA
prescribes statutory requirements for the advertisement and payment of
interest on deposits, and calls for the FRB to issue any necessary
regulations. 12 U.S.C. 4308. The FRB has responded by adopting
Regulation DD, 12 CFR part 230. See 57 FR 43337 (1992).
The Agencies have acknowledged that Regulation DD has superseded
their own advertising rules, and have therefore rescinded them. See id.
43336 (removing the advertising provisions of Regulation Q); 58 FR 4308
(removing all but the most general advertising regulations of the
Office of Thrift Supervision); 58 FR 27921 (1993) (repealing the FDIC's
advertising regulation).
The Statement also provides advice regarding the advance promotion
and advertisement of NOW accounts by depository institutions that
received NOW account authority for the first time on December 31, 1980.
The Statement is obsolete in this respect as well.
The Agencies' Action
The Agencies hereby withdraw the Statement.
Dated: July 26, 1996.
Joe M. Cleaver,
Executive Secretary, Federal Financial Institutions Examination
Council.
[FR Doc. 96-19555 Filed 8-1-96; 8:45 am]
BILLING CODE 6210-01-P
