Be sure to watch the video from Coffee With Joe: The Time Is Now To End Reserve-Based Monetary System
SEC. 306. SAVINGS PROVISIONS AND TRANSFER PROVISIONS.
(a) Savings Provisions-
(1) EXISTING RIGHTS, DUTIES, AND OBLIGATIONS NOT AFFECTED- The establishment of the Bureau of the Federal Reserve shall not affect the validity of any right, duty, or obligation of the United States, the Bureau (as the successor to the Board of Governors of the Federal Reserve System or any Federal reserve bank), or any other person that–
(A) arises under any provision of law relating to any function of the Board of Governors of the Federal Reserve System transferred to the Bureau by this title and amendments made by this title; and
(B) existed on the day before the effective date.
(2) CONTINUATION OF SUITS- This Act shall not abate any proceeding commenced by or against the Board of Governors (or any Federal reserve bank) before the effective date with respect to any function of the Board of Governors (or any Federal reserve bank) transferred to the Bureau by this title, except that the Bureau shall be substituted for the Board of Governors (or Federal reserve bank) as a party to any such proceeding as of the effective date.
(b) Transfer of Certain Personnel-
(1) IDENTIFYING EMPLOYEES FOR TRANSFER- The Secretary and the Chairman of the Board of Governors of the Federal Reserve System shall–
(A) jointly determine the number of employees of the Board necessary to perform or support the functions of the Board of Governors that are transferred to the Monetary Authority (if any) and the Bureau of the Federal Reserve pursuant to a provision of or amendment made by this title; and
(B) consistent with the number determined under subparagraph (A), jointly identify employees of the Board of Governors for transfer in a manner that the Secretary and the Board of Governors of the Federal Reserve System, in their sole discretion, determine to be equitable.
(2) IDENTIFIED EMPLOYEES TRANSFERRED- All employees of the Board of Governors of the Federal Reserve System identified under paragraph (1)(B) shall be transferred to the Monetary Authority or the Bureau of the Federal Reserve, as the case may be, for employment.
(3) FEDERAL RESERVE BANK EMPLOYEES- Employees of any Federal reserve bank, as of the day before the transfer date for any employees of the Board of Governors of the Federal Reserve System, shall be treated as employees of the Board of Governors for purposes of paragraph (1) and (2).
TITLE IV–TRANSITIONAL ARRANGEMENTS
SEC. 401. CONVERSION OF FEDERAL RESERVE NOTES.
(a) In General- Before the end of the 120-day period beginning on the date of the enactment of this Act, the Secretary shall establish the rules and procedures for converting outstanding Federal reserve notes to United States Money of equal face value.
(b) Provision of Supply Sufficient for Conversion and Issuance- Before the end of the 150-day period beginning on the date of the enactment of this Act and as Federal reserve notes are converted to United States Money, the Secretary shall begin providing a sufficient quantity of United States Money to the domestic banking system to allow for conversion of all outstanding Federal reserve notes and the issuance of additional currency as required.
(c) Disbursal of Funds- After the end of the 180-day period beginning on the date of the enactment of this Act, all financial institutions within the United States shall only disburse funds in United States Money, whether as currency, an addition to an available account balance, or other instrument.
(d) Disposal of Obsolete Currency- The Secretary shall promptly dispose of (in the manner provided under section 5120(b) of title 31, United States Code, for the disposal of obsolete United States currency) all Federal reserve notes as they are returned in exchange for United States Money.
(e) Technical and Conforming Amendment- Effective at the end of the 150-day period beginning on the date of the enactment of this Act, section 16 of the Federal Reserve Act is amended by striking the 8th, 9th, 10th, 11th, and 12th undesignated paragraphs (12 U.S.C. 418, 419, 420, 421, and omitted, respectively).
SEC. 402. REPLACING FRACTIONAL RESERVE BANKING WITH THE LENDING OF UNITED STATES MONEY.
(a) Conversion Process-
(A) IN GENERAL- All deposits at any depository institution shall be designated as and treated as United States Money (either cash or an electronic equivalent) and as transaction accounts.
(B) PROHIBITIONS- In addition to subsection (d), the following provisions shall apply with respect to United States Money on deposit in a transaction account at any depository institution:
(i) INTEREST- No interest may be paid or may accrue on any United States Money on deposit in a transaction account at any depository institution.
(ii) DEPOSITS AS BAILMENT- Any United States Money on deposit in a transaction account at any depository institution shall–
(I) be treated as a bailment for the mutual benefit of the parties and terminable at will; and
(II) as property held in trust as bailed property, not be treated as an asset of the depository institution or as a source of credit.
(C) EXCEPTION FOR LONG-TERM SAVINGS NOT SUBJECT TO DEPOSIT INSURANCE-
(i) IN GENERAL- Subparagraph (B) shall not apply to any liability of depository institution to a customer for any amount in an account at the depository institution pursuant to a contract that restricts the availability of any such amount for a fixed term and does not permit amounts to be transferred in any manner for the benefit of a third party.
(ii) FIXED-TERM SAVINGS NOT INSURED- Any account described in clause (i) may not be treated as a deposit, for purposes of the Federal Deposit Insurance Act, or as a share draft account, for purposes of the Federal Credit Union Act.
(2) OUTSTANDING CREDIT- Any asset of a depository institution that results from credit extended against, is attributable to, or has been accounted for with respect to, amounts described in paragraph (1)(A) shall, as of the effective date–
(A) be a liability of the depository institution to the Federal Government; and
(B) as the outstanding balance is repaid pursuant to its terms, shall be paid over to the Federal Government.
(3) DEPOSIT IN REVOLVING FUND- The monies paid to the Federal Government shall be deposited into the Revolving Account established in section 403.
(4) IN GENERAL- Before the effective date and subject to the requirements of this section, the Monetary Authority shall establish and publish the accounting rules, pricing, and processes which will convert all bank credit in circulation as of the date of such conversion, into United States legal tender money.
(5) RETENTION OF INTEREST PAYMENTS- A depository institution may keep as income, any interest payment made by a customer to a depository institution on an outstanding loan for which the depository institution became indebted to the Federal Government under paragraph (2).
(b) Treatment of Amounts on Reserve at a Federal Reserve Bank- The Monetary Authority shall determine, by the effective date, how the reserves of a depository institution at a Federal reserve bank pursuant to section 19 of the Federal Reserve Act shall be treated, so as to promote a seamless transition to the new system.
(c) Accounts in General- Before the effective date, the Monetary Authority shall prescribe new lending and accounting regulations for various types of accounts including transaction accounts and time deposit accounts described in subsections (d) and (e).
(d) Transaction Accounts-
(1) FRACTIONAL RESERVE BANKING ENDED- The regulations prescribed under subsection (c) shall provide that–
(A) any depository institution shall have a fiduciary responsibility for the money of any depositor on deposit in a transaction account which–
(i) shall be held for the exclusive use of the account holder; and
(ii) may not be used by a depository institution to fund loans or investments;
(B) a dollar of United States Money shall be on hand or in a Federal Government account for each dollar in a transaction account; and
(C) a depository institution may charge a reasonable fee for providing transaction account services.
(2) TRANSACTION ACCOUNT DEFINED- For purposes of this section, the term, ‘transaction account’–
(A) means a deposit or account on which the depositor or account holder is permitted to make withdrawals by negotiable or transferable instrument, payment orders of withdrawal, telephone transfers, or other similar items for the purpose of making payments or transfers to third persons or others; and
(B) includes demand deposits, negotiable order of withdrawal accounts, savings deposits subject to automatic transfers, and share draft accounts.
(e) United States Money as Source of Loans- After the effective date, all lending by depository institutions may be accomplished only by the lending of actual United States Money that is–
(1) owned by the depository institution from earnings and or capital contributions by investors;
(2) borrowed at interest from the Federal Government; or
(3) borrowed at interest through the issuance of bonds or other interest-bearing securities by the lending bank, to the extent that such bonds or securities are structured in a manner consistent with the purposes of this Act.
(f) Encouragement of Private, Profit-Making Money Lending Activity- The regulations prescribed and actions taken under this section shall be established and taken in a manner that–
(1) encourages private, profit-making money lending activity by banking institutions; and
(2) prohibits the creation of private money through the establishment of lending credit against depository receipts, sometimes referred to as ‘fractional reserve banking’.
SEC. 403. ESTABLISHMENT OF FEDERAL REVOLVING FUND.
(a) Revolving Loan Fund- Subject to provision in advance in an appropriation Act, there is hereby established a revolving loan fund in the Treasury of the United States where amounts received from depository institutions under terms specified in section 402 of this Act shall be deposited and made available for relending to banking institutions and for other purposes.
(b) Administration- The Revolving Fund shall be administered by the Bureau under such terms and conditions as the Secretary shall prescribe consistent with the purposes of this Act.
(c) National Emergency- In the event of a finding by the President that a National Emergency exists, and with the concurrence of the Congress in accordance with the emergency procedures specified under section 305, the Secretary, on the advice of the Monetary Authority, may draw upon up to 80 percent of the funds on deposit in the Revolving Fund. Such funds shall be returned to the Revolving Fund within 3 years of the date of initial disbursement, either through repayment of loans or through an Appropriation Act, unless the Secretary receives from the Congress specific authorization to extend the term of the loans. The authorization of Congress shall be given by joint resolution.
TITLE V–ADDITIONAL PROVISIONS
SEC. 501. DIRECT FUNDING OF INFRASTRUCTURE IMPROVEMENTS.
(a) Report Required on Opportunities for Direct Funding- Before the effective date, the Secretary, after consultation with the heads of Executive branch departments, agencies and independent establishments, shall report to the Congress on opportunities to utilize direct funding by the United States Government to modernize, improve, and upgrade the physical economy of the United States in such areas as transportation, agriculture, water usage and availability, sewage systems, medical care, education, and other infrastructure systems, to promote the general welfare, and to stabilize the Social Security retirement system.
(b) Broad Equitable Dispersion of Funding- Generally, any program recommended for direct funding shall be undertaken throughout the Nation based on per capita amounts and other criteria to assure equity as determined by the Monetary Authority.
SEC. 502. INTEREST RATE CEILINGS.
(a) Limit on Amount of Financing Fees- The total amount of interest charged by a financial institution on any extension of loans (other than a mortgage) to any individual borrower through amortization, including all fees and service charges, shall not exceed the total amount of the loan extended.
(b) Limit on Rate- The annual percentage rate applicable to any loan of money may not exceed 8 percent on unpaid balances, inclusive of all charges.
SEC. 503. AUTHORITY OF FDIC.
Except as provided in section 402 and the amendment made by section 3(b), no provision of this Act shall be construed as altering or affecting any authority or function of the Federal Deposit Insurance Corporation. No later than 12 months after the date of the enactment of this Act, the Chairperson of the Board of Directors of the Federal Deposit Insurance Corporation shall study and make recommendations to the Congress regarding any changes in authorities, including expanded supervision and monitoring, required to enhance the oversight and regulatory roles of the Federal Deposit Insurance Corporation under this Act.
SEC. 504. MONETARY GRANTS TO STATES.
(a) In General- Each year, the Monetary Authority shall instruct the Secretary to disperse grants over a 12-month period to the States equal to 25 percent of the money created under this title in the prior year. In the first year the amount of such grants shall be 25 percent of the anticipated money creation in that first year.
(b) Use of Grants for Broad-Based Purposes- The States may use such funds in broadly designated areas of public infrastructure, education, health care and rehabilitation, pensions, and paying for unfunded Federal mandates.
SEC. 505. EDUCATION FUNDING PROGRAM.
Before the end of the 120-day period beginning on the date of the enactment of this Act, the Secretary, in cooperation with the Secretary of Education, shall provide recommendations to the Congress for a program to help fund our educational system that will put the United States on par with other highly developed nations, and to sufficiently provide for universal pre-kindergarten, fully funded State programs for elementary and secondary education and universal college at every 2- and 4-year public institution of higher learning and create a learning environment so that every child has an opportunity to reach their full educational potential.
SEC. 506. SOCIAL SECURITY TRUST FUNDS.
The Secretary in consultation with the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds shall submit to the Monetary Authority any requests to cover impending deficits in Social Security Trust Fund accounts.
SEC. 507. INITIAL MONETARY DIVIDEND TO CITIZENS.
(a) In General- Before the effective date, the Secretary, in cooperation with the Monetary Authority, shall make recommendations to the Congress for payment of a Citizens Dividend as a tax-free grant to all United States citizens residing in the United States in order to provide liquidity to the banking system at the commencement of this Act, before governmental infrastructure expenditures have had a chance to work into circulation.
(b) Study of Effects of Citizens Dividend- The Secretary shall maintain a thorough study of the effects of the Citizens Dividend observing its effects on production and consumption, prices, morale, and other economic and fiscal factors.
SEC. 508. UNIVERSAL HEALTH CARE FUNDING.
The Congress shall be aware that funding through this Act is available for a universal health care plan as may be enacted by Congress.
SEC. 509. RESOLVING THE MORTGAGE CRISIS.
The Congress shall be aware that funding through this Act is available for Congressional enactments for resolving aspects of the mortgage crisis.
SEC. 510. INTEREST FREE LENDING TO LOCAL GOVERNMENTAL BODIES.
Before the end of the 180-day period beginning on the date of the enactment of this Act, the Secretary shall provide recommendations to the Congress for a program of interest-free lending of United States Money to State and local governmental entities, including school boards and emergency fire services for infrastructure improvements under their control and within their jurisdictions, based on per capita amounts and other criteria to assure equity as determined by the Monetary Authority.
So there you have it, one attempt to modify our monetary system, which I believe failed.
However, it might be a good model for a different monetary system, or perhaps, a model of how NOT to make a monetary system.