Originally from:
Banking Regulation in the United States - 3rd Edition - Hardcover
Banking Regulation in the United States - 3rd Edition - Electronic
Preview Page
CHAPTER IV
Deposits and Accounts:
Regulation Q “Deregulation”
A. The Special Nature of Deposits as a
Banking Activity
Deposits more than any other single ingredient define a bank. If
we look to the second dominant quality—making loans—it is
immediately apparent that many other institutions make loans. You
and I may lend money. But, essentially, and with some variations
not worth discussing, only banks may take deposits. We will soon
deal with what deposits are and how they can be distinguished from
other bank obligations; but for the moment let us accept the
generality.
B. State vs. Federal Regulation of Deposits
If we look at state law, with its broad generalized qualities, and
federal law, with its much more specific targets (as required by the
Constitution), we note that the overall business of banking is
generally prohibited at the state level unless one is properly
licensed; but a prohibition of this type does not exist under federal
law. All states have some broad definition of banking that starts
with a specific set of described activities—take deposits, discount
notes, etc.—and ends with some form of catch-all like “all
incidental activities” or “all kindred financial operations” so that
anything that smells and tastes like banking will be illegal unless
CHAPTER IV-Deposits and Accounts: Regulation Q "Deregulation"
A. The Special Nature of Deposits as a Banking Activity
B. State vs. Federal Regulation of Deposits
C. Regulation of Deposit Interest Rates
1. Prohibition of Interest on Demand Deposits
2. Enactment of Reg. Q
3. Temporary Reliefs from Reg. Q
a. Large Balance and Foreign Deposits
b. Mercantile Concerns
4. The Cash Management Account
a. Electronic Capabilities
b. The Legal Controversies
D. NOW Accounts and Checking in Thrift Institutions
1. Invention of the NOW Account
2. Regulation of the NOW Account
E. The End of the Reg.Q
1. The Depository Institutions Deregulation Act of 1980
2. The Money Market Deposit Account
3. Bank Accounts after Deregulation
F. Reserves
1. Expanded Recipients of Fed Services
2. Reduced Benefit in Fed Membership
G. Results of Deregulation
Carl Felsenfeld is Professor of Law, Fordham University School of Law, and Former Vice President & Senior Attorney for Consumer and Commercial Financial Activities, Citicorp.
Professor Felsenfeld was a charter member of the Federal Reserve Consumer Advisory Council, Chairman of the American Bar Association Committee on Consumer Financial Services, Advisor to the Commissioners on Uniform State Laws in their project to write an EFI law (Article 4A of the UCC) and a representative to the United Nations Commission on International Trade Law (EFT Model Law and International Insolvency Model Law).
David L. Glass serves as Head of Risk Management Group Legal Affairs for the Americas for the Macquarie Group, a diversified financial services company based in Sydney, Australia. He is also Counsel in the New York office of Arent Fox LLP, where he works in the finance group. He is experienced in advising clients in all aspects of banking and financial regulation. With the Macquarie Group, Mr. Glass advises management regarding the structuring of the Group's US activities and oversees the regulatory relationships of its regulated entities in the United States. David also serves as the Group's anti-money laundering (AML) officer for the Americas and as Director of Compliance for its SEC-registered broker dealer subsidiary.
Prior to working at Macquarie and Arent Fox, Mr. Glass was General Counsel of the New York Bankers Association and practiced with Clifford Chance and Debevoise & Plimpton. He began his career at the Federal Reserve Bank of New York, where at various times he served as a staff attorney, Chief of the Credit Analysis Division, and Assistant to the President. He is currently an adjunct professor of law at New York Law School and Pace University School of Law, where he has taught banking, international banking, payment systems and administrative law. In 2009 he was appointed associate director of New York Law School's newly established Center for Financial Services Law; in this capacity he is assisting in the development of courses and faculty for the school's newly accredited LLM degree in financial services law. Mr. Glass served as Chair of the New York State Bar Association's Business Law Section, and is currently Chair of the Association's Banking Law Committee. He is also a member of the Banking Law Committee of the Association of the Bar of the City of New York and the Panel of Commercial Arbitrators of the American Arbitration Association.
