April 1, 1980: President Carter Signs the ‘Depository Institutions Deregulation and Monetary Control Bill’ into Law

President Jimmy Carter signs the Depository Institutions Deregulation and Monetary Control Bill into law. Carter says the bill will “help control inflation, strengthen our financial institutions and help small savers.” Among the bill’s main provisions are raising of ceilings on the interest paid to small savers and a substantial enhancement to the monetary control powers of the nation’s central bank, the Federal Reserve System. The main provisions of the law:
Permanently overrides state-imposed ceilings on mortgage rates unless states act within three years to reenact them.
Wipes out for three years interest rate limits on agricultural and business loans of more than $25,000.
Increases to 15 percent from 12 percent the maximum interest rate on credit union loans, with even higher rates possible for periods up to 18 months.
Continues use of credit union share drafts, bank’s automatic transfer accounts and remote service units.
Simplifies truth-in-lending laws.
Requires lenders to repay consumers for overcharges.
Authorizes federal savings and loan associations to expand their consumer loan and credit card operations and allows them to offer trust services.
Gives the Federal Reserve a more effective reach by establishing a universal and uniform system of banking reserves. Over an eight year period all depository institutions, including savings and loan associations and mutual savings banks, will be encouraged to post reserves with their chapter Federal Reserve banks which will be 12 percent of all transactions as opposed to the tiered structure at 16 1/4 percent, leaving those that left the Federal Reserve System prior to the enactment of this law at a competitive disadvantage until they themsleves register their funds with the Federal Reserve. [New York Times, 4/1/1980, pp. 1]