| Shorttitle: | Depository Institutions Deregulation and Monetary Control Act |
| Longtitle: | An Act to facilitate the implementation of monetary policy, to provide for the gradual elimination of all limitations on the rates of interest which are payable on deposits and accounts, and to authorize interest-bearing transaction accounts, and for other purposes. |
| Nickname: | Consumer Checking Account Equity Act of 1979 |
| Enacted By: | 96th |
| Effective Date: | March 31, 1980 |
| Public Law Url: | http://www.gpo.gov/fdsys/pkg/STATUTE-94/pdf/STATUTE-94-Pg132.pdf |
| Cite Public Law: | 96-221 |
| Title Amended: | 12 U.S.C.: Banks and Banking |
| Sections Amended: | § 226 |
| Leghisturl: | http://thomas.loc.gov/cgi-bin/bdquery/z?d096:HR04986:@@@R |
| Introducedin: | House |
| Introducedby: | Fernand St. Germain (D–RI) |
| Introduceddate: | July 27, 1979 |
| Committees: | House Banking, Finance, and Urban Affairs, Senate Banking, Housing, and Urban Affairs |
| Passedbody1: | House |
| Passeddate1: | September 11, 1979 |
| Passedvote1: | 367-39 |
| Passedbody2: | Senate |
| Passeddate2: | November 1, 1979 |
| Passedvote2: | 76-9 |
| Conferencedate: | March 21, 1980 |
| Passedbody3: | House |
| Passeddate3: | March 27, 1980 |
| Passedvote3: | 380-13 |
| Passedbody4: | Senate |
| Passeddate4: | March 28, 1980 |
| Passedvote4: | agreed |
| Signedpresident: | Jimmy Carter |
| Signeddate: | March 31, 1980 |
The Depository Institutions Deregulation and Monetary Control Act of 1980 (often abbreviated DIDMCA or MCA) is a United States federal financial statute passed in 1980 and signed by President Jimmy Carter on March 31.[1] It gave the Federal Reserve greater control over non-member banks.
The act was in part a response to economic volatility and financial innovations of the 1970s that increasingly pressed the highly regulated savings and loan industry and arguably had unintended consequences that helped lead to the collapse and subsequent bailout of that financial sector. While S&Ls were freed to pay depositors higher interest rates, the institutions continued to carry large portfolios of loans paying them much lower rates of return; by 1981, 85 percent of the thrifts were losing money and the congressional response was the Garn–St Germain Depository Institutions Act of 1982.[5]
The bill's passage is considered an important shift in the Democratic Party's positioning on economic regulation, as the party had historically defended New Deal era financial regulations, but had now come to favor financial deregulation. According to a 2022 study, this shift happened as a consequence of the congressional reforms of the 1970s, which undermined parochial and Southern populist interests within the Democratic Party. These parochial and populist interests favored a decentralized banking system. The party subsequently pursued deregulatory reforms that it perceived as beneficial to savers and consumers.[6]
Despite the initial popularity of the DIDMCA, legislative actions in states like Rhode Island and Minnesota have challenged its provisions, particularly those allowing national banks to export interest rates. These states are considering bills to opt out of this federal provision, aiming to exert more local control over interest rate regulations.[7]
The legislative actions seeking to repeal DIDMCA-like policies has been criticized by examining Colorado's experience, as detailed in a study by J Howard Beales III and Andrew Stivers. They argue that Colorado's decision to opt out of federal banking law equality has led to reduced credit access, especially for consumers with lower credit scores or insufficient credit history. Their analysis suggests that such legislative limits on competition can exacerbate negative effects on citizens most in need of access to credit, highlighting the broader implications of undermining the DIDMCA's objectives.[8]