NFIB

House Votes on Interest on Business Checking
03/18/2004

The House will vote today on an amendment to a banking bill that would allow small-business owners to earn interest on their checking account balances.

The amendment, sponsored by Rep. Sue Kelly (R-N.Y.), repeals a law dating back to the Great Depression that prohibits banks from offering interest-bearing checking accounts to small businesses.

The Kelly amendment, which contains the exact same language as the Business Checking Freedom Act of 2003 that passed the House by voice vote last March, would give banks the option to offer interest on checking accounts to small businesses.

Currently, big banks only offer interest-bearing checking accounts to their largest corporate clients. Small-business owners have to choose between a non-interest bearing account or a more costly "sweep" account, which requires a significantly higher minimum balance than ordinary checking accounts.

The related bill, the Financial Services Regulatory Relief Act of 2003, would remove dozens of banking regulations and open up new markets for credit unions. According to Congressional Quarterly, the House is expected to pass the legislation.

Today's vote will be considered an NFIB Key Small Business Vote for the 108th Congress. As an NFIB Key Vote, the final tally on the Kelly amendment will be sent to all 600,000 NFIB members as part of the group's How Congress Voted scorebook just before the 2004 elections. A 1996 poll showed that 64 percent of voters are more likely to support candidates backed by small-business owners and NFIB, compared to only 5 percent of voters who said they'd be less likely to support candidates backed by small business and NFIB.