I am deeply gratified by the passage of this legislation, which will help many Americans to obtain residential mortgage loans that would otherwise have been unavailable in many States. The administration has strongly supported a limited Federal preemption of State usury ceilings on mortgage loans, and the Congress approval of this provision will alleviate serious mortgage availability problems in the coming months in States with binding usury ceilings.
I am also pleased that the Congress has deferred the effective date of a court decision which would have prohibited depository institutions from offering share drafts, remote service, and automatic transfer accounts. These services have benefited millions of Americans, and we will work with the Congress to give institutions permanent legislative authority to offer these accounts.
Finally, I am pleased to note the extension of NOW account authority to federally chartered savings and loan institutions in New Jersey. Senator Williams and the New Jersey congressional delegation deserve credit for this provision, which will remove a serious competitive inequity. We will continue to seek nationwide NOW account authority.
I am hopeful that the bill I am signing today is only an interim step toward the passage of historic financial reform legislation early next year, legislation that would assure small savers a fair rate of return on their deposits, give our Nation's central bank the necessary tools to implement an effective noninflationary monetary policy, provide broader powers for thrift institutions to compete in a modern financial environment, and remove obsolete regulatory constraints.
The administration will work actively to assure the phaseout of Regulation Q deposit rate ceilings and the passage of legislation to stem the decline in Federal Reserve membership. During a period of high inflation, it is simply unacceptable for the Federal Government to force small savers to accept a submarket rate of return on their deposits. Similarly, as Chairman Volcker and Secretary Miller have noted, the decline in Federal Reserve membership ultimately threatens the ability of our central bank to conduct monetary policy, and it is critically important to stem membership attrition on a fair and equitable basis.
The banking committees are to be commended for their progress toward this landmark legislation, which was outlined in my 1979 State of the Union message. We will work closely with the Congress to assure the enactment of comprehensive financial reform legislation.
Note: As enacted, H.R. 4998 is Public Law 96-161, approved December 28.
Jimmy Carter, Financial Institutions Deregulation Bill Statement on Signing H.R. 4998 Into Law. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/248527