First Mid-Illinois Bank & Trust to Offer Commercial Interest Checking Account to All Business Customers
MATTOON, Ill., July 25, 2011 /PRNewswire/ -- As the result of recent regulatory changes that took effect July 21, 2011, First Mid-Illinois Bank & Trust, N.A., is rolling out a commercial interest business checking account that provides interest for all its business customers effective August 1.
"While the interest rates starting out are modest," Clay Dean, Senior Vice President of Business Development at First Mid, said, "they will be substantially more than the 0% that other banks are currently paying their commercial depositors." Dean was part of the team that developed the account and served as a member of the Regulation Q Working Group sponsored by the American Bankers Association. The group included many community banks and larger global institutions such as Goldman Sachs, Citigroup and Chase.
Positive News for Business Customers
Up until the recent regulatory change, only sole proprietors and non-profits could be paid interest on deposits. Larger commercial depositors could only receive an "earnings credit" that was based upon the amount of funds on deposit. Now, First Mid offers all businesses the opportunity to earn interest with its commercial interest checking account. They are also bundling this account with other services to add even more value for their customers such as debit cards, online business banking, bill pay, ACH origination and more.
"Part of the original intent of the prohibition against paying interest was to encourage a more stable base of bank deposits and to discourage banks from making risky investments in order to achieve a more competitive rate of return," Dean continued. "We believe the regulatory change will help community businesses in these challenging economic times."
Legal Changes Resulting from the Dodd-Frank Act
As of July 21, Regulation Q was repealed. As a result, there is no longer a prohibition against payment of interest on demand deposits (Regulation Q) as mandated by section 627 of Title VI of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 ("Dodd-Frank Act").
Specifically, the Dodd-Frank Act repeals section 19(i) of the Federal Reserve Act, section 18(g) of the Federal Deposit Insurance Act, and part of section 5(b)(1)(B) of the Home Owners' Loan Act.
About First Mid
A subsidiary of First Mid-Illinois Bancshares, First Mid is headquartered in Mattoon, Illinois, and has assets of more than $1.5 billion. First Mid provides comprehensive banking, trust and wealth management services through its operating subsidiaries First Mid-Illinois Bank & Trust, N.A., and First Mid Insurance Group. It operates banking centers and ATMs in over 25 communities in Illinois. More information about First Mid is available at www.firstmid.com.
For more information or an interview, please contact:
Mandy Lewis, VP, Director of Marketing at First Mid-Illinois Bank & Trust
(217) 258-0675
SOURCE First Mid-Illinois Bank & Trust
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