Magazine article American Banker

2d Chance in Senate Banking for Business Check Interest

Magazine article American Banker

2d Chance in Senate Banking for Business Check Interest

Article excerpt

The Senate Banking Committee is expected to breathe new life Thursday into a measure that would let banks pay interest on business checking accounts. The provision, which easily passed the committee in February but has been stalled by unrelated issues, could get a second chance when Sen. Richard C. Shelby offers it as an amendment to a securities bill scheduled for consideration tomorrow, the Alabama Republican's spokeswoman said. Industry lobbyists expect Sen. Shelby's amendment to mirror his business checking bill, which would repeal a Depression-era ban on paying interest to commercial checking customers as of Jan. 1. In the interim, banks would get broader powers to "sweep" funds from business checking accounts to interest-bearing accounts. "My expectation is that he will offer the same provisions, because those provisions have already been negotiated between Republicans and Democrats," said Robert R. Davis, the head lobbyist at America's Community Bankers, one of the strongest supporters of allowing interest on business checking accounts. "Having the same provision residing in two separate bills passed out of the Senate Banking Committee increases the likelihood of eventual passage," he said. The House approved a similar measure in April, though its version would not allow banks to pay interest on business checking accounts until three years after enactment. Possibly providing a middle ground, Senate leaders have agreed to push back the effective date of their legislation until Sept. …

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