AFP Urges Repeal Of Law Prohibiting Interest Payments On Business Checking Accounts
The Association for Financial Professionals (AFP) has expressed its support of the Business Checking Freedom Act (H.R. 1009), which would eliminate an outdated banking law that prohibits banks from paying interest on business checking accounts. Such restrictions also make commercial banks less competitive in serving the financial needs of many business customers. Some banks sweep sterile checking account funds on a daily basis to money market deposit accounts or other earnings instruments. These systems are cumbersome and costly for smaller banks and savings institutions to operate, which in turn, can impede their ability to compete for business checking accounts. Small businesses also may find it difficult to obtain the benefits of efficient use of funds often available to larger and more sophisticated businesses.