Monetary Control Act of 1980

Monetary Control Act of 1980 (MAC)

Act which requires that all banks and all institutions that accept deposits from the public make periodic reports to the Federal Reserve System. Starting in September 1981, the Fed charged banks for a range of services that it had provided free in the past, including check clearing, wire transfer of funds and the use of automated clearinghouse facilities.

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.
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In addition, the Monetary Control Act of 1980 requires the
Regulation Q, which allowed the Federal Reserve to regulate interest rates in savings accounts, was repealed by the Depository Institutions Deregulation and Monetary Control Act of 1980. In 1987, the Congressional Research Service submitted a report presenting the arguments for and against preserving the Glass-Steagall Act.
The Monetary Control Act of 1980 requires that the Board establish fees for priced services provided to depository institutions to recover, over the long run, all direct and indirect costs actually incurred as well as imputed costs that would have been incurred, including financing costs, taxes, and certain other expenses, and the return on equity (profit) that would have been earned if a private business firm provided the services.
First, the Depository Institutions Deregulation and Monetary Control Act of 1980 abolished most of the interest rate ceilings that had been imposed on deposit accounts since the Banking Act of 1933 and authorized nationwide negotiable orders of withdrawal accounts (NOWs), which are interest-bearing checking accounts classified in M1.
The Monetary Control Act of 1980 requires the Federal Reserve to charge fees for providing payments services, including check processing, to cover (i) the Fed's expenses and (ii) imputed taxes and profits that would be earned by private firms providing similar services.
The Texas IOLTA (interest on lawyers' trust accounts) program was inaugurated on a voluntary basis in 1984, after the enactment of the Depository Institutions Deregulation and Monetary Control Act of 1980 made possible interest-bearing trust accounts, called NOW accounts for negotiable order of withdrawal, allowing lawyers to pool client funds.
In the United States, the basic structure of reserve requirements is set out in the Monetary Control Act of 1980, and the Federal Reserve's authority to adjust reserve requirements is limited by this legislation.
Key laws affecting the Federal Reserve include the Banking Act of 1935; the Employment Act of 1946; the 1970 amendments to the Bank Holding Company Act; the International Banking Act of 1978; the Full Employment and Balanced Growth Act of 1978; the Depository Institutions Deregulation and Monetary Control Act of 1980; the Financial Institutions Reform, Recovery, and Enforcement Act of 1989; and the Federal Deposit Insurance Corporation Improvement Act of 1991.
He argues that the Monetary Control Act of 1980 was a disingenuous means to the Fed's acquisition of power rather than enhancement of control over the money supply.
The Monetary Control Act of 1980 mandated the Fed to charge explicit prices for these services and to exit the business if it could not compete successfully with the private sector.
96-221, the Monetary Control Act of 1980. It is determined by the seven-person Board of Governors of the Federal Reserve System.