Extensions of Credit by Federal Reserve Banks, 61657-61658 [E8-24519]
Download as PDF
<![CDATA[
61657
Rules and Regulations
Federal Register
Vol. 73, No. 202
Friday, October 17, 2008
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents. Prices of
new books are listed in the first FEDERAL
REGISTER issue of each week.
FEDERAL RESERVE SYSTEM
12 CFR Part 201
[Regulation A]
Extensions of Credit by Federal
Reserve Banks
Board of Governors of the
Federal Reserve System.
ACTION: Final rule.
AGENCY:
SUMMARY: The Board of Governors of the
Federal Reserve System (Board) has
adopted final amendments to its
Regulation A to reflect the Board’s
approval of a decrease in the primary
credit rate at each Federal Reserve Bank.
The secondary credit rate at each
Reserve Bank automatically decreased
by formula as a result of the Board’s
primary credit rate action.
DATES: The amendments to part 201
(Regulation A) are effective October 17,
2008. The rate changes for primary and
secondary credit were effective on the
dates specified in 12 CFR 201.51, as
amended.
jlentini on PROD1PC65 with RULES
FOR FURTHER INFORMATION CONTACT:
Jennifer J. Johnson, Secretary of the
Board (202/452–3259); for users of
Telecommunication Devices for the Deaf
(TDD) only, contact 202/263–4869.
SUPPLEMENTARY INFORMATION: The
Federal Reserve Banks make primary
and secondary credit available to
depository institutions as a backup
source of funding on a short-term basis,
usually overnight. The primary and
secondary credit rates are the interest
rates that the twelve Federal Reserve
Banks charge for extensions of credit
under these programs. In accordance
with the Federal Reserve Act, the
primary and secondary credit rates are
established by the boards of directors of
the Federal Reserve Banks, subject to
the review and determination of the
Board.
VerDate Aug<31>2005
17:16 Oct 16, 2008
Jkt 217001
The Board approved requests by the
Reserve Banks to decrease by 50 basis
points the primary credit rate in effect
at each of the twelve Federal Reserve
Banks, thereby decreasing from 2.25
percent to 1.75 percent the rate that
each Reserve Bank charges for
extensions of primary credit. As a result
of the Board’s action on the primary
credit rate, the rate that each Reserve
Bank charges for extensions of
secondary credit automatically
decreased from 2.75 percent to 2.25
percent under the secondary credit rate
formula. The final amendments to
Regulation A reflect these rate changes.
The 50-basis-point decrease in the
primary credit rate was associated with
a similar decrease in the target for the
federal funds rate (from 2.00 percent to
1.50 percent) approved by the Federal
Open Market Committee (Committee)
and announced at the same time. A
press release announcing these actions
indicated that:
Incoming economic data suggest that the
pace of economic activity has slowed
markedly in recent months. Moreover, the
intensification of financial market turmoil is
likely to exert additional restraint on
spending, partly by further reducing the
ability of households and businesses to
obtain credit. Inflation has been high, but the
Committee believes that the decline in energy
and other commodity prices and the weaker
prospects for economic activity have reduced
the upside risks to inflation.
The Committee will monitor economic and
financial developments carefully and will act
as needed to promote sustainable economic
growth and price stability.
Regulatory Flexibility Act Certification
Pursuant to the Regulatory Flexibility
Act (5 U.S.C. 605(b)), the Board certifies
that the new primary and secondary
credit rates will not have a significantly
adverse economic impact on a
substantial number of small entities
because the final rule does not impose
any additional requirements on entities
affected by the regulation.
Administrative Procedure Act
The Board did not follow the
provisions of 5 U.S.C. 553(b) relating to
notice and public participation in
connection with the adoption of these
amendments because the Board for good
cause determined that delaying
implementation of the new primary and
secondary credit rates in order to allow
notice and public comment would be
unnecessary and contrary to the public
PO 00000
Frm 00001
Fmt 4700
Sfmt 4700
interest in fostering price stability and
sustainable economic growth. For these
same reasons, the Board also has not
provided 30 days prior notice of the
effective date of the rule under section
553(d).
12 CFR Chapter II
List of Subjects in 12 CFR Part 201
Banks, Banking, Federal Reserve
System, Reporting and recordkeeping.
Authority and Issuance
For the reasons set forth in the
preamble, the Board is amending 12
CFR Chapter II to read as follows:
■
PART 201—EXTENSIONS OF CREDIT
BY FEDERAL RESERVE BANKS
(REGULATION A)
1. The authority citation for part 201
continues to read as follows:
■
Authority: 12 U.S.C. 248(i)–(j), 343 et seq.,
347a, 347b, 347c, 348 et seq., 357, 374, 374a,
and 461.
2. In § 201.51, paragraphs (a) and (b)
are revised to read as follows:
■
§ 201.51 Interest rates applicable to credit
extended by a Federal Reserve Bank.1
(a) Primary credit. The interest rates
for primary credit provided to
depository institutions under § 201.4(a)
are:
Federal Reserve
Bank
Rate
Boston ................
New York ...........
Philadelphia ........
Cleveland ...........
Richmond ...........
Atlanta ................
Chicago ..............
St. Louis .............
Minneapolis ........
Kansas City ........
Dallas .................
San Francisco ....
1.75
1.75
1.75
1.75
1.75
1.75
1.75
1.75
1.75
1.75
1.75
1.75
Effective
October
October
October
October
October
October
October
October
October
October
October
October
8,
8,
8,
8,
8,
8,
8,
9,
8,
8,
8,
8,
2008.
2008.
2008.
2008.
2008.
2008.
2008.
2008.
2008.
2008.
2008.
2008.
(b) Secondary credit. The interest
rates for secondary credit provided to
depository institutions under 201.4(b)
are:
1 The primary, secondary, and seasonal credit
rates described in this section apply to both
advances and discounts made under the primary,
secondary, and seasonal credit programs,
respectively.
E:\FR\FM\17OCR1.SGM
17OCR1
61658
Federal Register / Vol. 73, No. 202 / Friday, October 17, 2008 / Rules and Regulations
Federal reserve
bank
Rate
Boston ................
New York ...........
Philadelphia ........
Cleveland ...........
Richmond ...........
Atlanta ................
Chicago ..............
St. Louis .............
Minneapolis ........
Kansas City ........
Dallas .................
San Francisco ....
*
*
*
2.25
2.25
2.25
2.25
2.25
2.25
2.25
2.25
2.25
2.25
2.25
2.25
*
Effective
October
October
October
October
October
October
October
October
October
October
October
October
8,
8,
8,
8,
8,
8,
8,
9,
8,
8,
8,
8,
2008.
2008.
2008.
2008.
2008.
2008.
2008.
2008.
2008.
2008.
2008.
2008.
*
By order of the Board of Governors of the
Federal Reserve System,
Dated: October 9, 2008.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. E8–24519 Filed 10–16–08; 8:45 am]
BILLING CODE 6210–01–P
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 330
RIN 3064–AD36
Deposit Insurance Regulations;
Temporary Increase in Standard
Coverage Amount; Mortgage Servicing
Accounts
Federal Deposit Insurance
Corporation (FDIC).
ACTION: Interim rule with request for
comments.
jlentini on PROD1PC65 with RULES
AGENCY:
I. Background
SUMMARY: The FDIC is adopting an
interim rule to amend its deposit
insurance regulations to reflect
Congress’s recent action to temporarily
increase the standard deposit insurance
amount from $100,000 to $250,000 and
to simplify the deposit insurance rules
for funds maintained in mortgage
servicing accounts.
The FDIC’s main goals in revising its
insurance rule on mortgage servicing
accounts are to simplify a rule that has
become increasingly complex in
application due to developments in
securitizations and to provide
additional certainty with respect to the
deposit insurance coverage of these
accounts at a time of turmoil in the
housing and financial markets. The
FDIC believes this regulatory change
will help improve public confidence in
the banking system.
DATES: The effective date of the interim
rule is October 10, 2008. Written
comments must be received by the FDIC
not later than December 16, 2008.
ADDRESSES: You may submit comments
by any of the following methods:
VerDate Aug<31>2005
17:16 Oct 16, 2008
Jkt 217001
• Agency Web Site: https://
www.fdic.gov/regulations/laws/federal.
Follow instructions for submitting
comments on the Agency Web Site.
• E-mail: Comments@FDIC.gov.
Include ‘‘Mortgage Servicing Accounts’’
in the subject line of the message.
• Mail: Robert E. Feldman, Executive
Secretary, Attention: Comments, Federal
Deposit Insurance Corporation, 550 17th
Street, NW., Washington, DC 20429.
• Hand Delivery/Courier: Guard
station at the rear of the 550 17th Street
Building (located on F Street) on
business days between 7 a.m. and 5 p.m.
(EST).
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
Public Inspection: All comments
received will be posted without change
to https://www.fdic.gov/regulations/laws/
federal including any personal
information provided. Paper copies of
public comments may be ordered from
the Public Information Center by
telephone at (877) 275–3342 or (703)
562–2200.
FOR FURTHER INFORMATION CONTACT:
Joseph A. DiNuzzo, Counsel, Legal
Division (202) 898–7349 or Christopher
Hencke, Counsel, Legal Division (202)
898–8839, Federal Deposit Insurance
Corporation, Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
A. Temporary Increase in Insurance
Coverage
The Emergency Economic
Stabilization Act of 2008 temporarily
increased the standard maximum
deposit insurance amount (‘‘SMDIA’’)
from $100,000 to $250,000, effective
October 3, 2008, and ending December
31, 2009.1 After that date, the SMDIA
will, by law, return to $100,000. In the
interim rule the FDIC is amending its
deposit insurance regulations to reflect
the temporary increase in the SMDIA.
B. Mortgage Servicing Accounts
The FDIC was established to maintain
public confidence and stability in the
United States banking system and
protect insured depositors. The
regulations governing deposit insurance
coverage are codified at 12 CFR part
330, and they include specific rules on
deposits of payments collected by
mortgage servicers and placed into
accounts at insured depository
institutions. 12 CFR 330.7(d) (‘‘mortgage
servicing accounts’’). Accounts
maintained by a mortgage servicer, in a
custodial or other fiduciary capacity,
1 Public
PO 00000
Law 110–343 (October 3, 2008).
Frm 00002
Fmt 4700
Sfmt 4700
may include funds paid by mortgagors
for principal, interest and escrowed
amounts for taxes and insurance
premiums. Principal and interest funds
are insured for the interest of each
owner (mortgagee, investor or security
holder) in those accounts. Under section
330.7(d) funds maintained by a servicer,
in a custodial or other fiduciary
capacity, which represent payments by
mortgagors of taxes and insurance
premiums are added together and
insured for the ownership interest of
each mortgagor in those accounts.
The FDIC’s rules for mortgage
servicing accounts were adopted in
1990, after the Financial Services
Reform, Recovery, and Enforcement Act
of 1989, abolished the Federal Savings
and Loan Insurance Corporation
(‘‘FSLIC’’) and transferred the insurance
of savings association deposits to the
FDIC. Prior to that time, the FDIC did
not have specific rules for mortgage
servicing accounts, and the FSLIC’s
rules provided insurance coverage for
principal and interest funds based on
the interest of each mortgagor.2
As described above, under section
330.7(d), funds representing payments
of principal and interest are insurable
on a pass-through basis to each
mortgagee, investor or security holder.
In contrast, funds representing
payments of taxes and insurance are
insurable on a pass-through basis to
each mortgagor or borrower. When the
FDIC adopted these rules in 1990, it
focused largely on the fact that principal
and interest funds are owned by the
investors, on whose behalf the servicer,
as agent, accepts the principal and
interest payments, and are not owned by
the borrowers. By contrast, under the
current rule, taxes and insurance funds
are insured to the mortgagors or
borrowers on the theory that the
borrower still owns the funds until the
tax and insurance bills are actually paid
by the servicer.
Over the past several years,
securitization methods and vehicles for
mortgages have become more layered
and complex. The FDIC believes that it
has become much more difficult and
time-consuming for a servicer to
identify and determine the share of any
investor in a securitization and in the
principal and interest funds on deposit
at an insured depository institution.
Under the current regulation, in the
event of the failure of an FDIC-insured
depository institution, the FDIC is
concerned that there could be
unexpected loss to securitization
investors of principal and interest
payments deposited at the institution by
2 12
E:\FR\FM\17OCR1.SGM
CFR 564.3(b)(2)(1989).
17OCR1
]]>Agencies
[Federal Register Volume 73, Number 202 (Friday, October 17, 2008)]
[Rules and Regulations]
[Pages 61657-61658]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-24519]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
========================================================================
Federal Register / Vol. 73, No. 202 / Friday, October 17, 2008 /
Rules and Regulations
[[Page 61657]]
FEDERAL RESERVE SYSTEM
12 CFR Part 201
[Regulation A]
Extensions of Credit by Federal Reserve Banks
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Board of Governors of the Federal Reserve System (Board)
has adopted final amendments to its Regulation A to reflect the Board's
approval of a decrease in the primary credit rate at each Federal
Reserve Bank. The secondary credit rate at each Reserve Bank
automatically decreased by formula as a result of the Board's primary
credit rate action.
DATES: The amendments to part 201 (Regulation A) are effective October
17, 2008. The rate changes for primary and secondary credit were
effective on the dates specified in 12 CFR 201.51, as amended.
FOR FURTHER INFORMATION CONTACT: Jennifer J. Johnson, Secretary of the
Board (202/452-3259); for users of Telecommunication Devices for the
Deaf (TDD) only, contact 202/263-4869.
SUPPLEMENTARY INFORMATION: The Federal Reserve Banks make primary and
secondary credit available to depository institutions as a backup
source of funding on a short-term basis, usually overnight. The primary
and secondary credit rates are the interest rates that the twelve
Federal Reserve Banks charge for extensions of credit under these
programs. In accordance with the Federal Reserve Act, the primary and
secondary credit rates are established by the boards of directors of
the Federal Reserve Banks, subject to the review and determination of
the Board.
The Board approved requests by the Reserve Banks to decrease by 50
basis points the primary credit rate in effect at each of the twelve
Federal Reserve Banks, thereby decreasing from 2.25 percent to 1.75
percent the rate that each Reserve Bank charges for extensions of
primary credit. As a result of the Board's action on the primary credit
rate, the rate that each Reserve Bank charges for extensions of
secondary credit automatically decreased from 2.75 percent to 2.25
percent under the secondary credit rate formula. The final amendments
to Regulation A reflect these rate changes.
The 50-basis-point decrease in the primary credit rate was
associated with a similar decrease in the target for the federal funds
rate (from 2.00 percent to 1.50 percent) approved by the Federal Open
Market Committee (Committee) and announced at the same time. A press
release announcing these actions indicated that:
Incoming economic data suggest that the pace of economic
activity has slowed markedly in recent months. Moreover, the
intensification of financial market turmoil is likely to exert
additional restraint on spending, partly by further reducing the
ability of households and businesses to obtain credit. Inflation has
been high, but the Committee believes that the decline in energy and
other commodity prices and the weaker prospects for economic
activity have reduced the upside risks to inflation.
The Committee will monitor economic and financial developments
carefully and will act as needed to promote sustainable economic
growth and price stability.
Regulatory Flexibility Act Certification
Pursuant to the Regulatory Flexibility Act (5 U.S.C. 605(b)), the
Board certifies that the new primary and secondary credit rates will
not have a significantly adverse economic impact on a substantial
number of small entities because the final rule does not impose any
additional requirements on entities affected by the regulation.
Administrative Procedure Act
The Board did not follow the provisions of 5 U.S.C. 553(b) relating
to notice and public participation in connection with the adoption of
these amendments because the Board for good cause determined that
delaying implementation of the new primary and secondary credit rates
in order to allow notice and public comment would be unnecessary and
contrary to the public interest in fostering price stability and
sustainable economic growth. For these same reasons, the Board also has
not provided 30 days prior notice of the effective date of the rule
under section 553(d).
12 CFR Chapter II
List of Subjects in 12 CFR Part 201
Banks, Banking, Federal Reserve System, Reporting and
recordkeeping.
Authority and Issuance
0
For the reasons set forth in the preamble, the Board is amending 12 CFR
Chapter II to read as follows:
PART 201--EXTENSIONS OF CREDIT BY FEDERAL RESERVE BANKS (REGULATION
A)
0
1. The authority citation for part 201 continues to read as follows:
Authority: 12 U.S.C. 248(i)-(j), 343 et seq., 347a, 347b, 347c,
348 et seq., 357, 374, 374a, and 461.
0
2. In Sec. 201.51, paragraphs (a) and (b) are revised to read as
follows:
Sec. 201.51 Interest rates applicable to credit extended by a Federal
Reserve Bank.\1\
---------------------------------------------------------------------------
\1\ The primary, secondary, and seasonal credit rates described
in this section apply to both advances and discounts made under the
primary, secondary, and seasonal credit programs, respectively.
---------------------------------------------------------------------------
(a) Primary credit. The interest rates for primary credit provided
to depository institutions under Sec. 201.4(a) are:
------------------------------------------------------------------------
Federal Reserve Bank Rate Effective
------------------------------------------------------------------------
Boston................................ 1.75 October 8, 2008.
New York.............................. 1.75 October 8, 2008.
Philadelphia.......................... 1.75 October 8, 2008.
Cleveland............................. 1.75 October 8, 2008.
Richmond.............................. 1.75 October 8, 2008.
Atlanta............................... 1.75 October 8, 2008.
Chicago............................... 1.75 October 8, 2008.
St. Louis............................. 1.75 October 9, 2008.
Minneapolis........................... 1.75 October 8, 2008.
Kansas City........................... 1.75 October 8, 2008.
Dallas................................ 1.75 October 8, 2008.
San Francisco......................... 1.75 October 8, 2008.
------------------------------------------------------------------------
(b) Secondary credit. The interest rates for secondary credit
provided to depository institutions under 201.4(b) are:
[[Page 61658]]
------------------------------------------------------------------------
Federal reserve bank Rate Effective
------------------------------------------------------------------------
Boston................................ 2.25 October 8, 2008.
New York.............................. 2.25 October 8, 2008.
Philadelphia.......................... 2.25 October 8, 2008.
Cleveland............................. 2.25 October 8, 2008.
Richmond.............................. 2.25 October 8, 2008.
Atlanta............................... 2.25 October 8, 2008.
Chicago............................... 2.25 October 8, 2008.
St. Louis............................. 2.25 October 9, 2008.
Minneapolis........................... 2.25 October 8, 2008.
Kansas City........................... 2.25 October 8, 2008.
Dallas................................ 2.25 October 8, 2008.
San Francisco......................... 2.25 October 8, 2008.
------------------------------------------------------------------------
* * * * *
By order of the Board of Governors of the Federal Reserve
System,
Dated: October 9, 2008.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. E8-24519 Filed 10-16-08; 8:45 am]
BILLING CODE 6210-01-P
