Vanderbilt Law Review


Betty R. Turner

First Page



Since 1980 the financial marketplace has experienced a period of rapid evolution during which financial institutions have abandoned their differentiated product and service lines, within government regulatory limits, to compete with each other in obtaining funds from depositors and investors. For example, only commercial banks historically provided checking account services; now, many depository and nondepository institutions offer transaction services similar to checking accounts. The thrift institutions --savings and loan associations, mutual savings banks, and credit unions -- provide their customers with "checking" account services through negotiable order of withdrawal (NOW) accounts and share draft accounts. Investment banking houses, nondepository institutions,introduced the money market mutual fund, which provides investors a market rate of return while also allowing them some transactions privileges. Money market mutual funds are the most threatening competitors to depository institutions because the different regulatory systems for depository institutions and investment banking firms have created an "unlevel playing field"' for these businesses in their battle for funds.