Yes, you are correct that the prohibition against paying interest on business checking accounts has been repealed. The Dodd-Frank Act eliminated Regulation Q’s prohibition against paying interest on business demand deposit accounts as of July 21, 2011.

However, for-profit businesses generally are prohibited from maintaining NOW accounts, since they do not meet the criteria for NOW account eligibility. The rules governing eligibility were not amended by the Dodd-Frank Act, and they limit NOW account customers to individuals (including sole proprietorships), nonprofit organizations, governmental units, funds held in a fiduciary capacity, and certain nonqualifying entities that opened their accounts before August 31, 1981.

For resources related to our guidance, please see:

• Final Rule, Interest on Deposits; Deposit Insurance Coverage, 76 Fed. Reg. 41392, 41392 (July 14, 2011) (“The FDIC is issuing a final rule amending its regulations to reflect section 627 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the DFA), repealing the prohibition against the payment of interest on demand deposit accounts effective July 21, 2011.”)

• Regulation D, 12 CFR 204.130(b)(1) (“Any individual may maintain a NOW account regardless of the purposes that the funds will serve. Thus, deposits of an individual used in his or her business including a sole proprietor or an individual doing business under a trade name is eligible to maintain a NOW account in the individual’s name or in the ‘DBA’ name. However, other entities organized or operated to make a profit such as corporations, partnerships, associations, business trusts, or other organizations may not maintain NOW accounts.”)

• Regulation D, 12 CFR 204.130 (Eligibility for NOW accounts.)