Reserve Requirements of Depository Institutions: Reserves Simplification, 21846-21854 [2012-8562]

Agencies

• FEDERAL RESERVE SYSTEM

[Federal Register Volume 77, Number 71 (Thursday, April 12, 2012)]
[Rules and Regulations]
[Pages 21846-21854]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-8562]


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FEDERAL RESERVE SYSTEM

12 CFR Part 204

[Regulation D; Docket No. R-1433]
RIN 7100-AD83


Reserve Requirements of Depository Institutions: Reserves 
Simplification

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Final rule.

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SUMMARY: The Board is amending Regulation D, Reserve Requirements of 
Depository Institutions, to simplify the administration of reserve 
requirements. The final rule creates a common two-week maintenance 
period for all depository institutions, creates a penalty-free band 
around reserve balance requirements in place of carryover and routine 
penalty waivers, discontinues as-of adjustments related to deposit 
report revisions, replaces all other as-of adjustments with direct 
compensation, and eliminates the contractual clearing balance program. 
The amendments are designed to reduce the administrative and 
operational costs associated with reserve requirements for depository 
institutions, the Board, and Federal Reserve Banks.

DATES: Effective Date: This rule is effective on July 12, 2012, except 
that effective on January 24, 2013, the following sections are further 
amended: Sec.  204.2(z), (ff), (gg) and (hh); Sec.  204.5 (b)(2), 
(d)(4)(i), and (e); Sec.  204.6 (a) and (b); Sec.  204.10 (b)(1), 
(b)(3), and (c).

FOR FURTHER INFORMATION CONTACT: Kara Handzlik, Senior Attorney (202) 
452-3852, Legal Division, or Margaret Gillis DeBoer, Assistant Director 
(202) 452-3139, or Heather Wiggins, Senior Financial Analyst (202) 452-
3674, Division of Monetary Affairs, or for questions regarding the 
Private Sector Adjustment Factor, Gregory Evans, Deputy Associate 
Director (202) 452-3945, or Brenda Richards, Manager (202) 452-2753, 
Division of Reserve Bank Operations and Payment Systems; for users of 
Telecommunications Device for the Deaf (TDD) only, contact (202) 263-
4869; Board of Governors of the

[[Page 21847]]

Federal Reserve System, 20th and C Streets NW., Washington, DC 20551.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 19 of the Federal Reserve Act (Act) \1\ authorizes the 
Board of Governors of the Federal Reserve System (Board) to impose 
reserve requirements on certain deposits and other liabilities of 
depository institutions for the purpose of implementing monetary 
policy. The Board's Regulation D (Reserve Requirements of Depository 
Institutions, 12 CFR part 204) implements section 19 of the Act and 
establishes reserve requirement ratios within the limits mandated by 
the Act. Under Regulation D currently, transaction account balances 
maintained at each depository institution are subject to reserve 
requirement ratios of zero, three, or ten percent, depending on the 
level of transaction accounts at that institution.\2\ A depository 
institution satisfies its reserve requirement by its holdings of vault 
cash and, if vault cash is insufficient to meet the requirement, by 
maintaining balances in an account at a Federal Reserve Bank (Reserve 
Bank). An institution may maintain balances either in the institution's 
own account at a Reserve Bank or in a pass-through correspondent's 
Reserve Bank account. The amount of balances that an institution must 
maintain if its reserve requirement is not satisfied by vault cash is 
referred to as the institution's reserve balance requirement. An 
institution satisfies its reserve balance requirement on average over a 
specified period of time, referred to as a maintenance period.
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    \1\ 12 U.S.C. 461.
    \2\ 12 CFR 204.4(f) (reserve requirement ratios).
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    Currently, an institution may also enter into an agreement with its 
Reserve Bank under which the institution agrees to maintain a specific 
minimum balance in its account (referred to as a contractual clearing 
balance). Contractual clearing balances generate earning credits that 
the institution can use to offset service charges it incurs through its 
use of Federal Reserve priced services. In addition, an institution may 
also maintain excess balances. Excess balances are balances maintained 
by an institution in its account at a Reserve Bank that are in excess 
of the balances maintained to satisfy its reserve balance requirement 
and the contractual clearing balance requirement (if any).
    Congress amended the Act in 2008 to authorize the Reserve Banks to 
pay interest on balances of eligible institutions at a rate or rates 
determined by the Board and not to exceed the general level of short-
term interest rates.\3\ The Board amended Regulation D in 2008 to allow 
Reserve Banks to pay interest on balances maintained to satisfy reserve 
balance requirements and excess balances. Both types of balances 
currently earn interest at the rate of 25 basis points.\4\ Contractual 
clearing balances generate earnings credits, as noted above, but they 
do not earn explicit interest payments.\5\
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    \3\ Emergency Economic Stabilization Act of 2008, Public Law 
110-343, Sec.  128, 122 Stat. 3765 (2008).
    \4\ 12 CFR 204.10(b) (rates of interest paid on balances 
maintained by eligible institutions at Reserve Banks).
    \5\ Earnings credits currently are computed as 80 percent of the 
rolling 13-week average of the three-month Treasury bill rate.
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II. Request for Public Comment and Summary of Comments Received

    On October 18, 2011, the Board requested public comment on proposed 
amendments to Regulation D and on several issues related to the 
methodology used to create the Private Sector Adjustment Factor (76 FR 
64250 (Oct. 18, 2011)). One comment was received on the Private Sector 
Adjustment Factor; the comment will be addressed in a future Federal 
Register notice along with previous comments to the Board's proposal to 
replace the current ``correspondent bank model'' with a model based on 
publicly traded firms.\6\
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    \6\ 74 FR 15481 (April 6, 2009).
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    The Board received 43 comments in response to its request for 
comment on the Regulation D amendments. The responses consisted of 
comments from 4 depository institutions, 19 employees of financial 
institutions, 12 financial institution trade associations, and 8 
individuals. Thirteen commenters addressed the proposed amendments to 
Regulation D; 8 of these 13 commenters also addressed issues not raised 
by the proposal. Thirty commenters addressed only issues not raised by 
the proposal. All but one of the 13 commenters on the proposed 
Regulation D amendments generally supported the proposal, but suggested 
(sometimes conflicting) amendments, provided support contingent on 
certain conditions, or requested that the Board delay the 
implementation date(s) of one or more of the proposed amendments. These 
comments are discussed in more detail below.
    The majority of comments on issues not raised by the proposal 
concerned limits on the number of certain convenient transfers that may 
be made each month from savings deposit accounts. The Board most 
recently addressed this issue in its May 2009 Regulation D rulemaking 
(72 FR 25629, 25631 (May 29, 2009)) when it finalized amendments to 
increase from three to six the permissible monthly number of transfers 
or withdrawals from savings deposits by check, debit card, or similar 
order payable to third parties. As noted in the May 2009 rulemaking, 
the Board must impose reserve requirements on transaction accounts and 
not on other types of accounts, such as savings deposits, pursuant to 
section 19 of the Federal Reserve Act.\7\ The Board believes the 
current numeric limitation is necessary for the Board to maintain the 
ability to distinguish between reservable and non-reservable types of 
deposit accounts.
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    \7\ The Act requires the Board to impose reserve requirements in 
a ratio from zero to fourteen percent on reservable liabilities.
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III. Analysis of Proposed Simplifications and Comments

    The Board proposed amendments to Regulation D that would implement 
the following four simplifications related to the administration of 
reserve requirements:
    1. Create a common two-week maintenance period for all depository 
institutions;
    2. Create a penalty-free band around reserve balance requirements 
in place of using carryover and routine penalty waivers;
    3. Discontinue as-of adjustments related to deposit report 
revisions and replace all other as-of adjustments with direct 
compensation; and
    4. Eliminate the contractual clearing balance program.
    The Board also proposed to make changes to various terms used 
throughout Regulation D in order to clarify the meaning, enhance the 
accuracy, and ensure the consistent application of those terms. These 
proposed changes included replacing the term ``required reserve 
balance'' with ``balances maintained to satisfy the reserve balance 
requirement,'' adding a definition of ``reserve balance requirement,'' 
and making conforming revisions throughout the regulation.
    After consideration of the comments received, the Board is adopting 
the amendments to Regulation D substantially as proposed, with minor 
technical changes. The Board considers the final amendments to 
Regulation D appropriate given the current approach to implementing 
monetary policy. If the Federal Reserve changes its monetary policy 
framework, which includes the payment of interest on balances held

[[Page 21848]]

with Reserve Banks, the entire framework, including the provisions of 
Regulation D, would be reassessed. As a result of the Board's adoption 
of these final amendments to Regulation D, related Federal Reserve Bank 
operating circulars and manuals affected by the final amendments to 
Regulation D will be updated accordingly.

Create a Common Two-Week Maintenance Period for All Depository 
Institutions

    As noted above, a depository institution satisfies its reserve 
balance requirement on average over a period of time that is known as a 
maintenance period. Currently, Regulation D provides for two types of 
maintenance periods: a one-week maintenance period and a two-week 
maintenance period. The determination of which maintenance period 
applies to an institution depends primarily on the frequency with which 
it is required to report its deposits to the Federal Reserve. The Board 
requires depository institutions to submit deposit reports at different 
frequencies depending on the amount of their reservable liabilities 
over the previous year. Depository institutions that have reservable 
liabilities above a certain amount (exemption amount) are required to 
submit deposit data either weekly or quarterly. Regulation D currently 
subjects weekly reporters to a two-week maintenance period and 
quarterly reporters to a one-week maintenance period. Institutions that 
have reservable liabilities below the exemption amount either submit 
deposit reports annually or are not required to report at all. Annual 
reporters and nonreporters with a contractual clearing balance are 
currently subject to a one-week maintenance period. Institutions that 
have neither reserve requirements nor clearing balance requirements 
receive interest payments at the excess balance rate because they do 
not maintain balances to satisfy reserve balance requirements.
    From one year to another, some depository institutions switch 
reporting frequency because of changes in the levels of the 
institution's reservable liabilities. Specifically, some depository 
institutions may switch from a two-week maintenance period to a one-
week maintenance period, or vice versa. In certain instances, 
depository institutions that become eligible to shift to a quarterly 
instead of weekly reporting frequency elect to remain at the higher 
reporting frequency in order to maintain the flexibility of satisfying 
reserve requirements over a two-week maintenance period instead of a 
one-week maintenance period.
    The Board proposed to create a common two-week maintenance period 
for all depository institutions. Accordingly, the Board proposed to 
retain the two-week maintenance period requirement for weekly reporters 
in Sec.  204.5(b)(1) of Regulation D, but to amend Sec.  204.5(b)(2) to 
include quarterly reporters in the two-week maintenance period 
requirement. As set forth in the proposal, the common two-week 
maintenance period would tend to benefit depository institutions, 
Reserve Banks, and the Board by (1) providing greater flexibility to 
depository institutions that currently satisfy reserve balance 
requirements over a one-week maintenance period; (2) reducing 
unnecessary complexity in the existing maintenance period structure; 
(3) reducing administrative and operational costs for depository 
institutions that may otherwise have had to change maintenance periods 
when deposit reporting categories (and therefore length of maintenance 
period) changed; and (4) reducing the operational and administrative 
cost for Reserve Banks and the Board by eliminating business processes 
and controls associated with maintaining two maintenance periods.
    The Board received 12 comments on the proposed common two-week 
maintenance period. Of these comments, 11 supported the creation of a 
common two-week maintenance period, and generally agreed that a common 
two-week maintenance period would reduce burden. One commenter 
expressed concern that annual reporters would face increased burden 
under the common two-week maintenance period if they were required to 
submit two weeks of data rather than a single day of data. The proposed 
common two-week maintenance period, however, does not change the 
frequency or the amount of data an institution must report, but rather 
changes the period of time over which an institution would satisfy its 
reserve balance requirement (if any). Annual reporters will continue to 
be required to report one day's worth of data, once a year, and have a 
reserve requirement of zero.
    The Board is adopting the common two-week maintenance period as 
proposed. As noted in the proposal, for depository institutions that 
report their deposits weekly, the relationship between weekly reporting 
periods and two-week maintenance periods will be maintained in Sec.  
204.5(b)(1) of Regulation D. For depository institutions that report 
their deposits quarterly, the quarterly reporting periods will not 
change, but the relationship of quarterly reporting periods to two-week 
maintenance periods will be new. Revised Sec.  204.5(b)(2) provides 
that, for quarterly reporters, each quarterly report will be used to 
calculate the reporter's reserve balance requirement for an interval of 
either six or seven consecutive two-week maintenance periods, depending 
on when the interval begins and ends. The interval will begin on the 
fourth Thursday following the end of each quarterly reporting period if 
that Thursday is the first day of a two-week maintenance period. If the 
fourth Thursday following the end of a quarterly reporting period is 
not the first day of a two-week maintenance period, then the interval 
will begin on the fifth Thursday following the end of the quarterly 
reporting period. The interval will end on the fourth Wednesday 
following the end of the subsequent quarterly reporting period if that 
Wednesday is the last day of a two-week maintenance period. If the 
fourth Wednesday following the end of the subsequent quarterly 
reporting period is not the last day of a two-week maintenance period, 
then the interval will conclude on the fifth Wednesday following the 
end of the subsequent quarterly reporting period.\8\
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    \8\ The Board currently provides quarterly reporters with 
reserve maintenance calendars that link quarterly reporting periods 
to a group of one-week maintenance periods. See https://www.frbservices.org/centralbank/reservescentral/#rmc. The 
Board will update these reserve maintenance calendars to reflect the 
new rule.
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    Annual reporters and nonreporters will continue to receive interest 
on their average balances maintained with Reserve Banks; however, the 
interest payments will be calculated on the average balance maintained 
over a two-week period at the excess balance rate instead of a one-week 
period at the excess balance rate.

Create a Penalty-Free Band Around Reserve Balance Requirements in Place 
of Carryover and Routine Penalty Waivers

    As noted above, Regulation D requires a depository institution to 
satisfy its reserve balance requirement on average over that depository 
institution's maintenance period. Currently, Sec.  204.5(e) of 
Regulation D permits a depository institution that has a modest 
deficiency in its balances maintained to satisfy a reserve balance 
requirement over a given maintenance period to make up that deficiency 
by holding a higher level of balances in the subsequent maintenance 
period. Correspondingly, Sec.  204.5(e) also permits

[[Page 21849]]

a depository institution that has a modest excess of balances 
maintained to satisfy its reserve balance requirement over a 
maintenance period to use that excess by holding a lower level of 
balances in the next maintenance period. This ``carryover'' provision 
(the ability to carry an excess or deficiency from one maintenance 
period over to the next) essentially prevents a Reserve Bank from 
determining whether a depository institution has satisfied its reserve 
balance requirement, or is in an excess or deficient position, until 
the completion of the subsequent maintenance period. As a result, 
Reserve Banks must delay the payment of interest and assessment of 
deficiency charges on eligible institutions' balances. Section 204.6(a) 
currently authorizes Reserve Banks to assess deficiency charges against 
depository institutions that fail to satisfy their reserve balance 
requirements. Section 204.6(b) currently permits Reserve Banks to waive 
the imposition of these charges under certain conditions through the 
use of ``routine penalty waivers.''
    The Board proposed to create a penalty-free band around each 
depository institution's reserve balance requirement and to eliminate 
the carryover and routine penalty waiver provisions of Regulation D. 
Specifically, proposed Sec.  204.2(gg) defined the top of the penalty-
free band as an amount equal to an institution's reserve balance 
requirement plus an amount that is the greater of 10 percent of the 
institution's reserve balance requirement or $50,000. Proposed Sec.  
204.2(hh) defined the bottom of the penalty-free band as an amount 
equal to an institution's reserve balance requirement less an amount 
that is the greater of 10 percent of an institution's reserve balance 
requirement or $50,000. For pass-through correspondents, the Board 
proposed setting the dollar amount used to establish the top and bottom 
of the penalty-free band at an amount that is equal to the greater of 
10 percent of the aggregate reserve balance requirement of the 
correspondent (if any) and all of its respondents or $50,000.
    Proposed Sec.  204.2(z) revised the definition of ``excess 
balance'' to mean the average balance maintained in a Reserve Bank 
account by or on behalf of an institution over a reserve maintenance 
period that exceeds the top of the penalty-free band, and proposed 
Sec.  204.2(ff) defined ``deficiency'' as the bottom of the penalty-
free band less the average balance maintained in a Reserve Bank account 
by or on behalf of an institution over a reserve maintenance period. 
Under the proposed structure, a depository institution that maintained 
balances that exceeded the reserve balance requirement, but fell within 
the band, would be remunerated at the interest rate paid on balances 
maintained to satisfy a reserve balance requirement. Balances that 
exceeded the top of the penalty-free band would be remunerated at the 
interest rate paid on excess balances. A depository institution that 
maintained balances below its reserve balance requirement would not be 
assessed a deficiency charge unless the balances fell below the bottom 
of the penalty-free band. The Board also proposed to remove Sec.  
204.5(e) and amend Sec. Sec.  204.6(a) and (b) to eliminate the 
application of carryover and routine penalty waivers, respectively. 
Reserve Banks would, however, retain the authority to waive charges for 
deficiencies based on an evaluation of the circumstances in each 
individual case. Finally, the Board proposed conforming amendments to 
Sec.  204.10(b)(1) and (b)(3), and (c) to replace ``required reserve 
balances'' with ``balances up to the top of the penalty-free band.''
    Six commenters generally supported the Board's proposal to create a 
penalty-free band around each depository institution's reserve balance 
requirement and to eliminate the carryover and routine waiver 
provisions of Regulation D. However, two of the commenters that 
supported this simplification requested different dollar amounts be 
used to establish the top and bottom of the penalty-free band. One 
commenter suggested a smaller dollar amount equal to the greater of 
$50,000 or 6 percent of a depository institution's reserve balance 
requirement. This commenter stated that institutions would be provided 
with sufficient flexibility if the band were defined in this manner. 
The other commenter requested the dollar amount be calculated similarly 
to the current carryover amount, using the greater of $50,000 or 4 
percent of a depository institution's total reserve requirement (as 
opposed to 10 percent of its reserve balance requirement). This 
commenter was concerned that a band based on a reserve balance 
requirement may affect the Federal Reserve's ability to implement 
monetary policy in the event that all depository institutions' reserve 
balance requirements were zero.
    The Board is adopting the penalty-free band as proposed, with one 
technical addition, and is eliminating the use of carryover and routine 
penalty waivers as proposed. The Board is clarifying that in no case 
will the bottom of the penalty-free band be less than zero. The Board 
believes that the proposed width of the penalty-free band will roughly 
replicate the amount of flexibility currently provided under the 
carryover provision. On average, reserve balance requirements are just 
under half of total reserve requirements. Therefore, the flexibility 
provided by the existing 4 percent carryover provision, when expressed 
in terms of reserve balance requirements, equates to roughly 10 percent 
of the reserve balance requirement for a typical depository 
institution. In addition, the Board believes a band constructed in 
terms of reserve balance requirements (rather than reserve 
requirements) is appropriate. Reserve balance requirements are more 
relevant than reserve requirements for implementing monetary policy and 
controlling the federal funds rate, because reserve balance 
requirements determine the amount of balances depository institutions 
are required to maintain in Reserve Bank accounts. The Board also 
acknowledges that the penalty-free band is applicable only in monetary 
policy frameworks where reserve balance requirements are non-zero. If 
in the future all reserve balance requirements were zero, which could 
result from either a significant change to the Federal Reserve's 
monetary policy framework or from depository institutions' limiting the 
amount of their reservable liabilities, the Board would reassess the 
penalty-free band and other aspects of the monetary policy framework 
accordingly.
    The Board received four comments on the proposed elimination of the 
carryover provision. These commenters supported the elimination 
provided that interest is paid soon after a maintenance period ends on 
balances maintained to satisfy a reserve balance requirement and excess 
balances. The Board anticipates that the elimination of carryover will 
allow for faster crediting of interest payments.

Discontinue as-of Adjustments Related to Deposit Report Revisions and 
Replace All Other as-of Adjustments With Direct Compensation

As-of Adjustments for Deposit Report Revisions
    Depository institutions are required to submit revisions to past 
deposit reports to correct for reporting errors. Currently, when those 
revisions result in a change in the depository institution's reserve 
balance requirement, an as-of adjustment is used to correct the 
depository institution's level of balances maintained. For example, if 
a reserve balance requirement for a given period is revised upwards, 
the as-of adjustment is used so that the depository institution

[[Page 21850]]

must hold a greater level of balances in a future maintenance period in 
order to meet its reserve balance requirement.
    The Board proposed to eliminate the use of as-of adjustments for 
deposit report revisions. The payment of interest on balances 
maintained to satisfy reserve balance requirements essentially 
eliminates the need for as-of adjustments for deposit report revisions, 
because the interest rate paid effectively removes the implicit tax 
imposed by reserve requirements. The Board received no comments 
opposing the elimination of as-of adjustments for deposit report 
revisions and is adopting this provision as proposed. The Board notes 
that revisions to deposit reports to correct for reporting errors will 
still be required, because these reports are used to calculate and 
publish the monetary aggregates.
All As-of Adjustments Other Than Those Related to Deposit Report 
Revisions
    In addition to use for deposit report revisions, as-of adjustments 
are currently used for other purposes as well. These purposes include, 
but are not limited to, correcting transaction errors, recovering 
float, and penalizing an institution for a reserve deficiency in lieu 
of assessing monetary charges. An as-of adjustment for a transaction-
based error corrects the average level of balances maintained by the 
depository institution to the level that would have resulted had the 
error not occurred. An as-of adjustment to recover float compensates 
the Reserve Bank for the float that is created by an institution's 
request to defer check and ACH charges for days in which the 
institution is closed. Finally, an as-of adjustment to penalize an 
institution for a reserve deficiency can be used instead of imposing an 
explicit monetary charge to the institution's Reserve Bank account.
    The Board proposed replacing as-of adjustments for transaction-
based errors with direct compensation (that is, either a debit or 
credit applied to an account to offset the effect of an error). The 
Board proposed replacing as-of adjustments for recovering float with 
explicit billing charges when float arises from temporary institution 
closings. Finally, the Board proposed eliminating the use of as-of 
adjustments for reserve deficiency penalties and relying solely on the 
assessment of explicit deficiency charges. The Board proposed to pay 
(or charge) an institution in these situations at a rate based on the 
federal funds rate.\9\
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    \9\ The federal funds rate is used in other instances of direct 
compensation by Reserve Banks. See, e.g., Sec.  210.32(b)(1)(ii) of 
Regulation J (federal funds rate applies if compensation interest 
rate not otherwise determined by agreement or rule).
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    Three commenters supported the replacement of as-of adjustments 
with direct compensation for all as-of adjustments other than those 
related to deposit report revisions, provided that institutions may 
continue to obtain detailed information on the error that occurred and 
the calculation of the compensation amount. These commenters stated 
that such detailed information is needed to verify the error, to 
reconcile accounts, and to allocate charges (or payments) by 
correspondents to the appropriate respondents. Five commenters 
supported the use of the federal funds rate to compensate depository 
institutions for transaction-based errors. No alternative compensation 
rate was suggested.
    The Board is adopting the final rule as proposed.\10\ The Board 
anticipates that the Reserve Banks will make the appropriate 
information and documentation available to depository institutions as 
may be needed to permit institutions to reconcile accounts and allocate 
charges or payments. For example, information will be available that 
helps describe the calculation of direct compensation entries including 
the error amount, the start and end date of the error, and 
identification of the originating service area. The Board also 
anticipates that Reserves Banks will provide institutions with contact 
information for service areas processing direct compensation entries so 
that inquiries can be addressed.
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    \10\ Consistent with these amendments to Regulation D, elsewhere 
in the Federal Register the Board is finalizing conforming changes 
to the provisions in Regulation J that refer to as-of adjustments.
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Eliminate the Contractual Clearing Balance Program

    As noted above, a depository institution may voluntarily agree with 
a Reserve Bank to maintain a level of balances in excess of the amount 
necessary to satisfy its reserve balance requirement. The actual amount 
that a depository institution maintains under such an agreement is 
known as a clearing balance.\11\ Reserve Banks do not pay explicit 
interest on clearing balances. Instead, clearing balances generate 
earnings credits that a depository institution may then use to pay for 
Reserve Bank priced services.
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    \11\ 12 CFR 204.2(v) (definition of clearing balance).
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    The Board proposed to eliminate the contractual clearing balance 
program. The Board proposed to amend Regulation D to remove the 
definitions of ``clearing balance'' (Sec.  204.2(v)), ``clearing 
balance allowance'' (Sec.  204.2(w)), and ``contractual clearing 
balance'' (Sec.  204.2(x)), along with the removal of any other 
references to clearing balances and contractual clearing balances 
elsewhere in Regulation D.
    Commenters generally supported the elimination of the contractual 
clearing balance program. However, one commenter stated that the 
elimination of the program may increase the possibility of overdrafts 
in depository institutions' Reserve Bank accounts if it was ever the 
case that the rate paid on balances held at Reserve Banks is below the 
federal funds rate and trading in the federal funds market is more 
active. This commenter suggested the Board announce its intent to 
continue the payment of interest on such balances at a rate equal to or 
greater than the federal funds rate.
    The Board is adopting the elimination of the contractual clearing 
balance program as proposed. The elimination of the contractual 
clearing balance program will enhance the Federal Reserve's ability to 
carry out monetary policy by eliminating the complexities associated 
with maintaining different balance requirements for different kinds of 
balances and different kinds and levels of interest rates (explicit and 
implicit). The elimination of the contractual clearing balance program 
will not have any effect on a Reserve Bank's ability to require 
institutions to maintain a minimum level of balances in their Reserve 
Bank accounts in order for Reserve Banks to protect against 
overdrafts.\12\ The Board established the rate of interest paid on 
balances maintained to satisfy reserve balance requirements at a level 
that implements monetary policy and that eliminates the implicit tax 
imposed by reserve requirements. The Board will continue to evaluate 
the appropriate level of interest rates to achieve these stated 
objectives and will communicate changes when necessary.
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    \12\ See Reserve Bank Operating Circulars at https://www.frbservices.org/regulations/operating_circulars.html.
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Effective Dates

    The Board proposed to eliminate the contractual clearing balance 
program and the use of as-of adjustments no earlier than the first 
quarter of 2012, and to implement a common maintenance period and the 
penalty-free band around reserve balance requirements no earlier than 
the third quarter of 2012. Four commenters stated that the proposed 
effective date for the elimination of

[[Page 21851]]

clearing balances and as-of adjustments was too aggressive in light of 
other regulatory changes, and suggested implementation of these 
simplifications no earlier than the beginning of the third quarter of 
2012, 90 days after publication of the final rule, or a period of nine 
months. Four other commenters requested that the implementation of all 
simplifications be delayed for either a period of nine months or at 
least until the first quarter of 2013. Additionally, a subset of these 
commenters requested that the Board provide for a staggered 
implementation of the simplifications.
    The Board will eliminate the contractual clearing balance program 
and the use of as-of adjustments earlier than it will implement the 
common maintenance period and the penalty-free band. Given that 
commenters generally noted that few operational changes would be 
necessary to prepare for the proposed amendments, the Board will 
eliminate the contractual clearing balance program on July 12, 2012. 
Also on this date, as-of adjustments will no longer be created and 
issuance of direct compensation will begin. This date is approximately 
90 days after the publication of the final rule and is within the time 
period suggested by some commenters as appropriate to prepare for the 
amendments. The Board will implement the common two-week maintenance 
period, the penalty-free band, and the elimination of carryover and 
routine penalty waivers on January 24, 2013. The Board will provide 
public notice no later than November 1, 2012, if the January 24, 2013 
date will be delayed.

IV. Final Regulatory Flexibility Analysis

    The Regulatory Flexibility Act (the ``RFA'') (5 U.S.C. 601 et seq.) 
requires agencies either to provide a final regulatory flexibility 
analysis with a final rule or to certify that the rule will not have a 
significant economic impact on a substantial number of small entities. 
In accordance with the RFA, the Board reviewed the final rule, which 
would apply to all depository institutions. Based on current 
information, the Board believes that, although a significant number of 
``small banking organizations'' will be affected by the rule, the rule 
will not have a significant economic impact on these small entities 
because the Board expects the amendments to decrease costs for all 
institutions, including smaller institutions. The Board prepared an 
initial regulatory flexibility analysis in accordance with 5 U.S.C. 603 
of the RFA in its notice of proposed rulemaking and sought comment on 
the potential impact of the proposed rule on small entities. The Board 
did not receive any comments on the initial regulatory flexibility 
analysis.
    1. Statement of the need for, objectives of, and legal basis for, 
the final rule. The Board proposed to amend Regulation D to simplify 
the administration of reserve requirements. Section 19 of the Federal 
Reserve Act requires the Board to impose reserve requirements on 
certain deposits and other liabilities of depository institutions 
solely for the purposes of implementing monetary policy. The Board's 
Regulation D implements section 19 of the Act. The Board believes that 
the amendments to Regulation D will reduce the administrative and 
operational costs associated with reserve requirements for depository 
institutions.
    2. Summary of significant issues raised by public comment on the 
Board's initial analysis of issues, and a statement of any changes made 
as a result. The Board did not receive any public comments on the 
proposed rule addressing matters relating to the Board's initial 
regulatory flexibility analysis.
    3. Small entities affected by the final rule. The final rule 
applies to all depository institutions. Pursuant to regulations issued 
by the Small Business Administration (the ``SBA'') (13 CFR 121.201), a 
``small banking organization'' includes a depository institution with 
$175 million or less in total assets. Based on data reported as of 
December 31, 2011, the Board believes that there are approximately 
10,313 small depository institutions. Out of these small depository 
institutions, the Board believes that small institutions affected by 
the final rule include approximately 3,181 small depository 
institutions that maintain balances to satisfy reserve balance 
requirements over a one-week maintenance period; approximately 1,775 
small depository institutions with contractual clearing balances; and 
approximately 197 small depository institutions that received at least 
one as-of adjustment in 2011.
    4. Recordkeeping, reporting, and other compliance requirements. 
Although the final rule imposes certain compliance requirements on 
depository institutions, the Board believes that the overall effect of 
the final rule on depository institutions, including small depository 
institutions, will be positive. Under new Sec.  204.5(b)(2), small 
depository institutions that satisfy their reserve balance requirement 
on a one-week maintenance period (approximately 3,181) will be subject 
to a two-week maintenance period. A depository institution may choose, 
however, not to change its internal systems accordingly, because it 
could continue to satisfy its requirement weekly within the two-week 
maintenance period. The final rule will also eliminate the contractual 
clearing balance program, currently used by approximately 1,775 small 
depository institutions. Although the contractual clearing program will 
be eliminated, the Board does not anticipate that small depository 
institutions will be negatively affected because small depository 
institutions will receive explicit interest payments on excess balances 
instead of earnings credits on clearing balances. Small depository 
institutions can then use this explicit interest to pay for Reserve 
Bank priced services or for other purposes, providing them with 
increased flexibility. In addition, the final rule eliminates the use 
of as-of adjustments for deposit revisions. The Board does not believe 
the elimination of as-of adjustments for deposit revisions will 
negatively affect small depository institutions because the interest 
rate paid on balances maintained to satisfy a reserve balance 
requirement effectively removes the implicit tax imposed by reserve 
requirements.
    5. Identification of duplicative, overlapping, or conflicting 
Federal rules. The Board has not identified any Federal rules that 
duplicate, overlap, or conflict with the final rule. In a separate 
rulemaking, the Board is finalizing amendments to Regulation J to 
remove references to as-of adjustments in order to conform that 
regulation to this rule.
    6. Significant alternatives to the proposed rule. The Board 
designed the reserve simplifications to reduce administrative and 
operational burdens on depository institutions. Commenters did not 
suggest any alternatives to the final rule that accomplish that 
objective.

V. Paperwork Reduction Act Analysis

    In accordance with the Paperwork Reduction Act (PRA) of 1995 (44 
U.S.C. 3506; 5 CFR part 1320 Appendix A.1), the Board reviewed the 
final rule under the authority delegated to the Board by the Office of 
Management and Budget (OMB). Although the mandatory data collected on 
the deposits reporting forms \13\ are used by the Federal Reserve for 
administering Regulation D and for constructing, analyzing, and 
monitoring

[[Page 21852]]

the monetary and reserve aggregates, none of the revisions in this 
rulemaking change the deposits reporting forms. The rule contains no 
collections of information under the PRA. See 44 U.S.C. 3502(3). 
Accordingly, no paperwork burden is associated with the rule. The Board 
received no comments on this analysis.
---------------------------------------------------------------------------

    \13\ Report of Transaction Accounts, Other Deposits and Vault 
Cash (FR 2900; OMB No. 7100-0087), Annual Report of Total Deposits 
and Reservable Liabilities (FR 2910a; OMB No. 7100-0175), Report of 
Foreign (Non-U.S.) Currency Deposits (FR 2915; OMB No. 7100-0237), 
and Allocation of Low Reserve Tranche and Reservable Liabilities 
Exemption (FR 2930; OMB No. 7100-0088).
---------------------------------------------------------------------------

List of Subjects in 12 CFR Part 204

    Banks, banking, Federal Reserve System, Reporting and recordkeeping 
requirements.

    For the reasons stated in the preamble, the Board is amending 12 
CFR part 204 as follows:

PART 204--RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS 
(REGULATION D)

0
1. The authority citation for part 204 continues to read as follows:

    Authority:  12 U.S.C. 248(a), 248(c), 461, 601, 611, and 3105.


0
2. Effective July 12, 2012, Sec.  204.1 paragraph (b) is revised to 
read as follows:


Sec.  204.1  Authority, purpose and scope.

* * * * *
    (b) Purpose. This part relates to reserve requirements imposed on 
depository institutions for the purpose of facilitating the 
implementation of monetary policy by the Federal Reserve System.
* * * * *

0
3. Effective July 12, 2012, Sec.  204.2 is amended by:
0
A. Removing and reserving paragraphs (v) through (x);
0
B. Revising paragraphs (z) and (bb); and
0
C. Adding paragraphs (ee) and (ff).
    The additions and revisions read as follows:


Sec.  204.2  Definitions.

* * * * *
    (z) Excess balance means the average balance maintained in an 
account at a Federal Reserve Bank by or on behalf of an institution 
over a reserve maintenance period that exceeds the balance maintained 
to satisfy a reserve balance requirement.
* * * * *
    (bb) Balance maintained to satisfy a reserve balance requirement 
means the average balance held in an account at a Federal Reserve Bank 
by or on behalf of an institution over a reserve maintenance period to 
satisfy a reserve balance requirement of this part.
* * * * *
    (ee) Reserve balance requirement means the balance that a 
depository institution is required to maintain on average over a 
reserve maintenance period in an account at a Federal Reserve Bank if 
vault cash does not fully satisfy the depository institution's reserve 
requirement imposed by this part.
    (ff) Deficiency means the reserve balance requirement less the 
average balance maintained in an account at a Federal Reserve Bank by 
or on behalf of an institution over a reserve maintenance period.
* * * * *

0
4. Effective January 24, 2013, Sec.  204.2 is further amended by:
0
A. Revising paragraphs (z) and (ff); and
0
B. Adding paragraphs (gg) and (hh).
    The additions and revisions read as follows:


Sec.  204.2  Definitions.

* * * * *
    (z) Excess balance means the average balance maintained in an 
account at a Federal Reserve Bank by or on behalf of an institution 
over a reserve maintenance period that exceeds the top of the penalty-
free band.
* * * * *
    (ff) Deficiency means the bottom of the penalty-free band less the 
average balance maintained in an account at a Federal Reserve Bank by 
or on behalf of an institution over a reserve maintenance period.
    (gg) Top of the penalty-free band means an amount equal to an 
institution's reserve balance requirement plus an amount that is the 
greater of 10 percent of the institution's reserve balance requirement 
or $50,000. The top of the penalty-free band for a pass-through 
correspondent is an amount equal to the aggregate reserve balance 
requirement of the correspondent (if any) and all of its respondents 
plus an amount that is the greater of 10 percent of that aggregate 
reserve balance requirement or $50,000.
    (hh) Bottom of the penalty-free band means an amount equal to an 
institution's reserve balance requirement less an amount that is the 
greater of 10 percent of the institution's reserve balance requirement 
or $50,000. The bottom of the penalty-free band for a pass-through 
correspondent is an amount equal to the aggregate reserve balance 
requirement of the correspondent (if any) and all of its respondents 
less an amount that is the greater of 10 percent of that aggregate 
reserve balance requirement or $50,000. In no case will the penalty-
free band be less than zero.

0
5. Effective July 12, 2012, in Sec.  204.4 revise paragraphs (d) and 
(e), and the introductory text of paragraph (f), to read as follows:


Sec.  204.4  Computation of required reserves.

* * * * *
    (d) For institutions that file a report of deposits weekly, reserve 
requirements are computed on the basis of the institution's daily 
average balances of deposits and Eurocurrency liabilities during a 14-
day computation period ending every second Monday.
    (e) For institutions that file a report of deposits quarterly, 
reserve requirements are computed on the basis of the institution's 
daily average balances of deposits and Eurocurrency liabilities during 
the 7-day computation period that begins on the third Tuesday of March, 
June, September, and December.
    (f) For all depository institutions, Edge and Agreement 
corporations, and United States branches and agencies of foreign banks, 
reserve requirements are computed by applying the reserve requirement 
ratios below to net transaction accounts, nonpersonal time deposits, 
and Eurocurrency liabilities of the institution during the computation 
period.
* * * * *

0
6. Effective July 12, 2012, Sec.  204.5 is amended by revising 
paragraphs (a)(1), (b), (c), (d), and (e) to read as follows:


Sec.  204.5  Maintenance of required reserves.

    (a)(1) A depository institution, a U.S. branch or agency of a 
foreign bank, and an Edge or Agreement corporation shall satisfy 
reserve requirements by maintaining vault cash and, if vault cash does 
not fully satisfy the institution's reserve requirement, in the form of 
a balance maintained
    (i) In the institution's account at the Federal Reserve Bank in the 
Federal Reserve District in which the institution is located, or
    (ii) With a pass-through correspondent in accordance with Sec.  
204.5(d).
* * * * *
    (b)(1) For institutions that file a report of deposits weekly, the 
balances maintained to satisfy reserve balance requirements shall be 
maintained during a 14-day maintenance period that begins on the third 
Thursday following the end of a given computation period.
    (2) For institutions that file a report of deposits quarterly, the 
balances maintained to satisfy reserve balance requirements shall be 
maintained during each of the 7-day maintenance periods during the 
interval that begins on the fourth Thursday following the end of the 
institution's computation

[[Page 21853]]

period and ends on the fourth Wednesday after the close of the 
institution's next computation period.
    (c) Cash items forwarded to a Federal Reserve Bank for collection 
and credit are not included in an institution's balance maintained to 
satisfy its reserve balance requirement until the expiration of the 
time specified in the appropriate time schedule established under 
Regulation J, ``Collection of Checks and Other Items by Federal Reserve 
Banks and Funds Transfers Through Fedwire'' (12 CFR part 210). If a 
depository institution draws against items before that time, the charge 
will be made to its account if the balance is sufficient to pay it; any 
resulting deficiency in balances maintained to satisfy the 
institution's reserve balance requirement will be subject to the 
penalties provided by law and to the deficiency charges provided by 
this part. However, the Federal Reserve Bank may, at its discretion, 
refuse to permit the withdrawal or other use of credit given in an 
account for any time for which the Federal Reserve Bank has not 
received payment in actually and finally collected funds.
    (d)(1) A depository institution, a U.S. branch or agency of a 
foreign bank, or an Edge or Agreement corporation with a reserve 
balance requirement (``respondent'') may select only one pass-through 
correspondent under this section, unless otherwise permitted by the 
Federal Reserve Bank in whose District the respondent is located. 
Eligible pass-through correspondents are Federal Home Loan Banks, the 
National Credit Union Administration Central Liquidity Facility, and 
depository institutions, U.S. branches or agencies of foreign banks, 
and Edge and Agreement corporations that maintain balances to satisfy 
their own reserve balance requirements which may be zero, in an account 
at a Federal Reserve Bank. In addition, the Board reserves the right to 
permit other institutions, on a case-by-case basis, to serve as pass-
through correspondents.
    (2) Respondents or correspondents may institute, terminate, or 
change pass-through correspondent agreements by providing all 
documentation required for the establishment of the new agreement or 
termination of or change to the existing agreement to the Federal 
Reserve Banks involved within the time period specified by those 
Reserve Banks.
    (3) Balances maintained to satisfy reserve balance requirements of 
a correspondent's respondents shall be maintained along with the 
balances maintained to satisfy a correspondent's reserve balance 
requirement (if any), in a single commingled account of the 
correspondent at the Federal Reserve Bank in whose District the 
correspondent is located. Balances maintained in the correspondent's 
account are the property of the correspondent and represent a liability 
of the Reserve Bank solely to the correspondent, regardless of whether 
the funds represent the balances maintained to satisfy the reserve 
balance requirement of a respondent.
    (4)(i) A pass-through correspondent shall be responsible for 
maintaining balances to satisfy its own reserve balance requirement (if 
any) and the reserve balance requirements of all of its respondents. A 
Federal Reserve Bank will compare the total reserve balance requirement 
to be satisfied by the correspondent with the total balance maintained 
to satisfy a reserve balance requirement by the correspondent for 
purposes of determining deficiencies, imposing or waiving charges for 
deficiencies and for other reserve maintenance purposes. A charge for a 
deficiency in the correspondent's account will be imposed by the 
Reserve Bank on the correspondent maintaining the account.
    (ii) Each correspondent is required to maintain detailed records 
for each of its respondents that permit Reserve Banks to determine 
whether the respondent has provided a sufficient funds to the 
correspondent to satisfy the reserve balance requirement of the 
respondent. The correspondent shall maintain such records and make such 
reports as the Board or Reserve Bank may requires in order to ensure 
the correspondent's compliance with its responsibilities under this 
section and shall make them available to the Board or Reserve Bank as 
required.
    (iii) The Federal Reserve Bank may terminate any pass-through 
agreement under which the correspondent is deficient in its 
recordkeeping or other responsibilities.
    (iv) Interest paid on supplemental reserves (if such reserves are 
required under Sec.  204.7) held by a respondent will be credited to 
the account maintained by the correspondent.
    (e) Any excess or deficiency in an institution's balance maintained 
to satisfy its reserve balance requirement shall be carried over and 
applied against the balance maintained in the next maintenance period 
as specified in this paragraph. The amount of any such excess or 
deficiency that is carried over shall not exceed the greater of:
    (1) The amount obtained by multiplying 0.04 times the depository 
institution's reserve requirement; or
    (2) $50,000. Any carryover not offset during the next period may 
not be carried over to subsequent periods.

0
7. Effective January 24, 2013, Sec.  204.5 is further amended by:
0
A. Revising paragraphs (b)(2) and (d)(4)(i); and
0
B. Removing paragraph (e).
    The additions and revisions read as follows:


Sec.  204.5  Maintenance of required reserves.

* * * * *
    (b) * * *
    (2) For institutions that file a report of deposits quarterly, the 
balances maintained to satisfy reserve balance requirements shall be 
maintained during an interval of either six or seven consecutive 14-day 
maintenance periods, depending on when the interval begins and ends. 
The interval will begin on the fourth Thursday following the end of 
each quarterly reporting period if that Thursday is the first day of a 
14-day maintenance period. If the fourth Thursday following the end of 
a quarterly reporting period is not the first day of a 14-day 
maintenance period, then the interval will begin on the fifth Thursday 
following the end of the quarterly reporting period. The interval will 
end on the fourth Wednesday following the end of the subsequent 
quarterly reporting period if that Wednesday is the last day of a 14-
day maintenance period. If the fourth Wednesday following the end of 
the subsequent quarterly reporting period is not the last day of a 14-
day maintenance period, then the interval will conclude on the fifth 
Wednesday following the end of the subsequent quarterly reporting 
period.
* * * * *
    (d) * * *
    (4)(i) A pass-through correspondent shall be responsible for 
maintaining balances to satisfy its own reserve balance requirement (if 
any) and the reserve balance requirements of all of its respondents. A 
charge for any deficiency in the correspondent's account will be 
imposed by the Reserve Bank on the correspondent maintaining the 
account.
* * * * *

0
8. Effective July 12, 2012, Sec.  204.6 is amended by revising the 
section heading and paragraphs (a) and (b), to read as follows:


Sec.  204.6  Charges for deficiencies.

    (a) Deficiencies in a depository institution's balance maintained 
to satisfy its reserve balance requirement after application of the 
carryover

[[Page 21854]]

provided in Sec.  204.5(e), are subject to deficiency charges. Federal 
Reserve Banks are authorized to assess charges for deficiencies at a 
rate of 1 percentage point per year above the primary credit rate, as 
provided in Sec.  201.51(a) of this chapter, in effect for borrowings 
from the Federal Reserve Bank on the first day of the calendar month in 
which the deficiencies occurred. Charges shall be assessed on the basis 
of daily average deficiencies during each maintenance period.
    (b) Reserve Banks may waive the charges for deficiencies except 
when the deficiency arises out of a depository institution's gross 
negligence or conduct that is inconsistent with the principles and 
purposes of reserve requirements. Decisions by Reserve Banks to waive 
charges are based on an evaluation of the circumstances in each 
individual case and the depository institution's reserve maintenance 
record. For example, a waiver may be appropriate for a small charge or 
once during a two-year period for a deficiency that does not exceed a 
certain percentage of the depository institution's reserve requirement. 
If a depository institution has demonstrated a lack of due regard for 
the proper maintenance of balances to satisfy its reserve balance 
requirement, the Reserve Bank may decline to exercise the waiver 
privilege and assess all charges regardless of amount or reason for the 
deficiency.
* * * * *

0
9. Effective January 24, 2013, Sec.  204.6 is further amended by 
revising paragraphs (a) and (b) to read as follows:


Sec.  204.6  Charges for deficiencies.

    (a) Federal Reserve Banks are authorized to assess charges for 
deficiencies at a rate of 1 percentage point per year above the primary 
credit rate, as provided in Sec.  201.51(a) of this chapter, in effect 
for borrowings from the Federal Reserve Bank on the first day of the 
calendar month in which the deficiencies occurred. Charges shall be 
assessed on the basis of daily average deficiencies during each 
maintenance period.
    (b) Reserve Banks may waive the charges for deficiencies based on 
an evaluation of the circumstances in each individual case.
* * * * *

0
10. Effective July 12, 2012, Sec.  204.10 is amended by revising 
paragraphs (b)(1), (b)(3), (c), (d)(3) and (e)(2) to read as follows:


Sec.  204.10  Payment of interest on balances.

* * * * *
    (b) * * *
    (1) For balances maintained to satisfy reserve balance 
requirements, at \1/4\ percent;
* * * * *
    (3) For balances maintained to satisfy reserve balance 
requirements, excess balances, and term deposits, at any other rate or 
rates as determined by the Board from time to time, not to exceed the 
general level of short-term interest rates. For purposes of this 
paragraph (b), ``short-term interest rates'' are rates on obligations 
with maturities of no more than one year, such as the primary credit 
rate and rates on term federal funds, term repurchase agreements, 
commercial paper, term Eurodollar deposits, and other similar 
instruments.
    (c) Pass-through balances. A pass-through correspondent that is an 
eligible institution may pass back to its respondent interest paid on 
balances maintained to satisfy a reserve balance requirement of that 
respondent. In the case of balances maintained by a pass-through 
correspondent that is not an eligible institution, a Reserve Bank shall 
pay interest only on the balances maintained to satisfy a reserve 
balance requirement of one or more respondents, and the correspondent 
shall pass back to its respondents interest paid on balances in the 
correspondent's account.
    (d) * * *
    (3) Balances maintained in an excess balance account will not 
satisfy any institution's reserve balance requirement.
* * * * *
    (e) * * *
    (2) A term deposit will not satisfy any institution's reserve 
balance requirement.
* * * * *

0
11. Effective January 24, 2013, Sec.  204.10 is further amended by 
revising paragraphs (b)(1), (b)(3), and (c) to read as follows:


Sec.  204.10  Payment of interest on balances.

* * * * *
    (b) * * *
    (1) For balances up to the top of the penalty-free band, at \1/4\ 
percent;
* * * * *
    (3) For balances up to the top of the penalty-free band, excess 
balances, and term deposits, at any other rate or rates as determined 
by the Board from time to time, not to exceed the general level of 
short-term interest rates. For purposes of this subsection, ``short-
term interest rates'' are rates on obligations with maturities of no 
more than one year, such as the primary credit rate and rates on term 
federal funds, term repurchase agreements, commercial paper, term 
Eurodollar deposits, and other similar instruments.
    (c) Pass-through balances. A pass-through correspondent that is an 
eligible institution may pass back to its respondent interest paid on 
balances maintained to satisfy a reserve balance requirement of that 
respondent. In the case of balances maintained by a pass-through 
correspondent that is not an eligible institution, a Reserve Bank shall 
pay interest only on the balances maintained to satisfy a reserve 
balance requirement of one or more respondents up to the top of the 
penalty-free band, and the correspondent shall pass back to its 
respondents interest paid on balances in the correspondent's account.
* * * * *

    By order of the Board of Governors of the Federal Reserve 
System, April 5, 2012.
Robert deV. Frierson,
Deputy Secretary of the Board.
[FR Doc. 2012-8562 Filed 4-11-12; 8:45 am]
BILLING CODE 6210-01-P