The Impact of NINOWs on Deposits in Illinois

The legal authority for thrift institutions to offer "check-like" services is being increasingly broadened. H istorically, only commercial banks have been permitted to offer and provide third-party payments services (checking accounts). However, in recent years judicial interpretations and legislative changes have generally eased such restrictions. Negotiable order of withdrawal (NOW) accounts, developed by New England thrift institutions, and noninterest-bearing negotiable order of withdrawal (NINOW) accounts, issued by some state-chartered savings and loan associations (S&Ls) in Illinois, are important components of the current trend.1 Legislation currently under consideration by Congress, if enacted, would further this trend by permitting all depository institutions, nationwide, to offer some form of NOW accounts.