As proposed, the Federal Reserve has repealed Regulation Q, the 1933 rule that governs interest rates on deposit products, including the ban on payment of interest on business demand deposits that was repealed by the Dodd-Frank Act.2 The FRB has decided to end all rules governing interest on demand deposits, rejecting requests from some banking organizations to retain the restrictions or limit and delay them. The Board’s actions will have far reaching impact on bank cost of funds, especially for corporate clients, although its impact will not be fully felt until interest rates return to more normal levels.

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