Depository Institutions Deregulation and Monetary Control Act

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Depository Institutions Deregulation and Monetary Control Act

The 1980 federal legislation that ended the regulation of the banking industry.

Depository Institutions Deregulation and Monetary Control Act

Legislation in the United States that deregulated banks while giving the Federal Reserve more authority over non-member banks. Particularly, it required non-member banks to abide by Federal Reserve decisions but allowed greater leeway in bank mergers and in individual banks setting their own interest rates. The Act also raised deposit insurance to $100,000 per account. It is informally known as the Monetary Control Act.
References in periodicals archive ?
This condition of the industry, besides inspiring the DIDMCA 1980 and Garn-St.
down arrow] DIDMCA (signed into law March 31, 1980).
Swary, 1988, "The Effects of DIDMCA on Bank Stockholders' Returns and Risk," Journal of Banking and Finance 12, 317-331.
This covers the implementation of DIDMCA and the lesser wave of mergers in the 1980s.
Switches in the late 1970s and early 1980s may be a response to DIDMCA or to pre-DIDMCA differences among regulators.
In contrast, DIDMCA provides that 'the laws of any State expressly limiting the rate or amount of interest, discount points, finance charges or other charges which may be charged.
Formally, the Federal Reserve, since DIDMCA, has widened its responsibility to other depository institutions due to application of its reserve requirements on deposit liabilities of commercial and savings banks.
Price competition seems to be working across industries and size of firms as would be expected under DIDMCA, especially since 1986 when Regulation Q of the Federal Reserve concerning interest rate ceilings on deposits was fully phased-out.
Beginning with the DIDMCA in March 1980, legislative and regulatory authorities began granting thrifts new investment powers.
Clearly, recovered firms used the funding flexibility afforded depository institutions by the DIDMCA (1980) and the Garn-St Germain Act (1982) more successfully than nonrecovered thrifts.