4/6/11 N.Y. St. Reg. BNK-14-11-00004-P
PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:
Proposed Action:
This is a consensus rule making to repeal Part 20 of Title 3 NYCRR.
Statutory authority:
Banking Law, section 14
Subject:
Payment of Interest on Commercial Bank Deposits.
Purpose:
To repeal prohibition against certain banking organizations paying interest on demand accounts.
Text of proposed rule:
It is proposed to repeal Part 20 of the General Regulations of the Banking Board, 3 NYCRR, as follows:
PAYMENT OF INTEREST ON COMMERCIAL BANK DEPOSITS
Text of proposed rule and any required statements and analyses may be obtained from:
Sam L. Abram, Secretary of the Banking Board, New York State Banking Department, One State Street, New York, 10004-1417, (212) 709-1658, email:
sam.abram@banking.state.ny.usData, views or arguments may be submitted to:
Same as above.
Public comment will be received until:
45 days after publication of this notice.
This action was not under consideration at the time this agency's regulatory agenda was submitted.
Consensus Rule Making Determination
No person is likely to object to the proposed repeal of Part 20. The regulation prohibits state chartered or licensed banks, trust companies, Article XII investment companies and branches and agencies of foreign banks from paying interest on demand accounts. Current federal law contains comparable prohibitions applicable to both state and federally licensed institutions. (See Federal Reserve Act Sec. 19 and Federal Reserve Regulation Q; Federal Deposit Insurance Act Section 18(g) and International Banking Act Sec. 3105).
However Section 627 of the federal Dodd-Frank Wall Street Reform and Consumer Protection Act repeals the existing federal prohibitions, effective July 21, 2011. The repeal of Part 20 will ensure continued competitive equality between state chartered or licensed institutions and institutions licensed by the federal government or other states. It will also ensure that New York depositors benefit fully from any increase in competition for demand deposits.
Job Impact Statement
Repealing Part 20, which prohibits state chartered or licensed banks, trust companies, Article XII investment companies and branches and agencies of foreign banks from paying interest on demand accounts, is not expected to have a significant adverse effect on jobs or employment activities within the banking industry.
