In the 1950s, however, interest rates increased and so banks began to feel greater incentive to get around the ban.
Non-pecuniary avoidance efforts included increased offering of convenience features such as large numbers of branch offices and giveaways of consumer goods to new customers.
[3]: p.4 The NOW account was developed as a more explicit challenge to the ban on interest payments by Ronald Haselton, President and CEO of the Consumer Savings Bank in Worcester, Massachusetts,[4] leading to Congress permitting NOW accounts in Massachusetts and New Hampshire starting in January 1974, and in all of New England starting in March 1976.
4 With no obvious adverse effects of NOW accounts in New England, Congress allowed them nationwide at all depository institutions beginning December 31, 1980.
[5] Finally, on July 21, 2011, the ban on demand deposit interest (the only substantive remaining component of Regulation Q) was eliminated,[2] which removed the only distinction between the two types of accounts.