Reg O & Interest Rates

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Question:

Does Reg O govern the interest rates one can provide on deposit (DDA and SAV and CD) accounts? Other than related to overdrafts, does Reg O impact deposit accounts in any way?

Answer:

Regulation O, no; however, it could very well be considered insider abuse and if you are a member of the Federal Reserve, it is a violation of law:

12 USC Section 376. Rate of interest paid to directors, etc.

No member bank shall pay to any director, officer, attorney, or employee a greater rate of interest on the deposits of such director, officer, attorney, or employee than that paid to other depositors on similar deposits with such member bank.

First published on BankersOnline.com 3/22/10