Depository Institutions Deregulation Act of 1979

Depository Institutions Deregulation Act of 1979 - Title I: Payment of Interest on Deposit Accounts - Amends the Federal Reserve Act, the Federal Deposit Insurance Act, and the Home Owners' Loan Act of 1933 to permit member banks in the Federal Reserve System, federally insured nonmember banks (including insured mutual savings banks), and Federal savings and loan associations to pay interest on negotiable order of withdrawal (NOW) accounts for individuals and nonprofit organizations. Amends the Federal Credit Union Act to authorize Federal credit unions to offer share draft accounts to individuals and nonprofit organizations. Requires the Board of Governors of the Federal Reserve System, the Board of Directors of the Federal Deposit Insurance Corporation, the Federal Home Loan Bank Board, and the National Credit Union Administration Board to consult with each other in setting the interest rates on time and savings deposits or the rate of dividends on share draft accounts which may be paid by financial institutions under their jurisdiction.

Fixes the interest rate on all NOW accounts at one-fourth percent below the lowest passbook rate. Permits depository institutions which are currently authorized to offer NOW and share draft accounts to continue to pay interest at their existing rate.

Extends the authority of the Secretary of the Treasury, the Board of Governors of the Federal Reserve System, the Board of Directors of the Federal Deposit Insurance Corporation, and the Federal Home Loan Bank Board to set maximum interest rates (Regulation Q) for each category of deposit until January 1, 1990. Requires such maximum rates to be increased by one-fourth percent every six months between January 1, 1982, and July 1, 1989. Authorizes the Board of Governors of the Federal Reserve System to postpone such an increase for one year if such action is necessary to preserve the viability of depository institutions during a serious economic emergency. Requires the Board to report to the Congress if such authority is exercised.

Prohibits the Board of Governors, the Board of Directors of the Federal Deposit Insurance Corporation, the Federal Home Loan Bank Board, or the National Credit Union Administration from approving any new category of deposits or accounts which pays interest at a rate lower than the rate payable on existing deposits and accounts of comparable maturities.

Requires the Board of Governors to report to the Congress if the bank regulatory agencies determine that the increases in the maximum rate of interest could be accelerated.

Authorizes the Board of Governors, in consultation with the other bank regulatory agencies, to prescribe maximum rates of interest after the lapse of Regulation Q on January 1, 1990. States that such controls shall remain in effect for one year and must be based on a finding that an extreme economic emergency exists and such action is necessary to maintain the economic viability of depository institutions. Requires any such finding to be promptly reported to the Congress.

Requires the bank regulatory agencies to report annually to the Congress on the viability of depository institutions.

Terminates the authority for interest rate differentials between insured banks and insured thrift institutions.

Title II: Reserve Requirements - Amends the Federal Reserve Act to require all depository institutions to maintain reserves against their NOW and share draft accounts. Authorizes the Board of Governors of the Federal Reserve System to establish uniform reserve ratios for such accounts between three and 22 percent.

Requires reserves held by any depository institution against its NOW and share draft accounts to be in the form of balances maintained at a Federal Reserve bank or, pursuant to uniform regulation of the Board of Governors, in the form of vault cash. Permits reserves to be held in nonmember institutions provided such reserves are passed through to the Federal Reserve. Requires any institution maintaining reserves to make such periodic reports on its deposits and reserves as the Board may require.

Phases in the reserve requirements imposed on nonmember institutions over a four-year period.

Authorizes the Federal Reserve banks to receive deposits, checks, and drafts for collection from any Federal Home Loan Bank or its members, or from any credit union or the National Credit Union Central Liquidity Fund subject to the approval of the Board of Governors, the Federal Home Loan Bank Board, or the Federal Credit Union Administration.

Title III: Miscellaneous - Amends the Home Owners' Loan Act of 1933 to empower Federal savings and loan associations to engage in consumer lending and transactions involving commercial paper, corporate debt securities, and bankers acceptances. Grants trust powers to such associations subject to regulation and approval by the Federal Home Loan Bank Board.

Preempts State usury laws with respect to loans secured by real property made by any federally insured or federally regulated lender unless a State enacts new legislation within two years. Exempts deposits and accounts held by federally insured banks, mutual savings banks, savings banks, insured credit unions, Federal savings and loan associations, and federally insured thrift institutions from State usury laws.