Ka-Ching! Well not so much, but every little bit helps…

One less Reg to deal with.

July 21, 2011 is the date you can negotiate an interest rate on your business checking account based on the Dodd-Frank Act.

A lot of things in the Act address consumer protection but interest on business checking is a plus for us and becomes effective on July 21st.   Treasury Secretary Geithner established the date, so it is highly unlikely that date will be extended.

At one-half of one percent business money market accounts are an unattractive option for businesses.  Couple that with minimum balances and fees they’re simply a nuisance.

Regulation Q goes away and banks can begin paying interest on transaction accounts, principally accounts of corporations, partnerships and other juridical entities. Regulation Q has prohibited banks from paying interest on demand deposits. Don’t ask me why.  Government regulations repeatedly defy logic.   The zero-rate on demand deposits encouraged the emergence of money market funds and other competitive investment vehicles outside of banking.  This could eliminate money market funds and simplify the means in which small businesses manage their cash accounts as we are always juggling funds between accounts, playing the money dance.

Because these are commercial accounts there are no disclosure requirements and banks periodic statements do not have to have the disclosures required by Regulation E and Regulation DD for interest paying accounts.  You should probably contact your bank on July 21 to see what interest rate you will be paying them and how that compares to the bank down the street or online for that matter.

About Idea Capitalist
Family guy and entrepreneur. Small Business owner. NFIB Leadership Council member. Serial blogger.

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