On the recordApril 3, 2001
I want to say that the emphasis should be here on the positive effect that this will have on small businesses nationwide, not just banks but their small business customers. I think that is the most important thing for us to consider. Yes, it affects sterile reserves that the Fed holds, and it permits those sterile reserves to bring interest to the banks involved. I think that is only a matter of equity. The most important part, I think, is the fact that the banking laws implemented during the Great Depression are changed. They have prohibited banks and thrifts from paying interest on business checking accounts. What I expect to happen now is that we are going to have a competition among financial institutions to take advantage of this opportunity to pay interest on these checking accounts.
Said by
Doug Bereuter
Source
govinfo.gov