Rep. Scott Murphy (D-N.Y.) and Rep. Walter Jones (R-N.C.) have introduced legislation that would allow small businesses to earn interest on their checking accounts.

The NSBA-supported Business Checking Fairness Act of 2009 (H.R. 4067) would repeal the provisions in the Banking Act of 1933 which prohibit banks from paying interest on business checking accounts. The inability to earn interest on a checking account has disproportionably affected small businesses for too long.

Many large firms have the ability to earn interest on their checking accounts through “sweep” accounts, which enable the business to “sweep” their checking-account balances, at the close of business, into a special interest-bearing account up to 24 times per month. The transferred money is then put back into the firm’s primary checking account at the beginning of the next business day, providing overnight interest accrual.

Due to the complexity of “sweep” accounts and the significant cost in administering them, these interest-bearing accounts have not been an option for most small businesses. The Business Checking Fairness Act of 2009 would ease this inequality, granting small businesses the overdue ability to earn interest on their checking accounts.

NSBA applauds the introduction of the Business Checking Fairness Act of 2009 and thanks Reps. Murphy and Jones for their leadership on the issue.