Regulation A: Extensions of Credit by Federal Reserve Banks, 57886-57888 [2017-26465]
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57886
Proposed Rules
Federal Register
Vol. 82, No. 235
Friday, December 8, 2017
This section of the FEDERAL REGISTER
contains notices to the public of the proposed
issuance of rules and regulations. The
purpose of these notices is to give interested
persons an opportunity to participate in the
rule making prior to the adoption of the final
rules.
FEDERAL RESERVE SYSTEM
12 CFR Part 201
[Docket No. R–1585; RIN 7100–AE 90]
Regulation A: Extensions of Credit by
Federal Reserve Banks
Board of Governors of the
Federal Reserve System.
ACTION: Notice of proposed rulemaking.
AGENCY:
The Board of Governors of the
Federal Reserve System (‘‘Board’’) is
proposing to amend its Regulation A to;
revise the provisions regarding the
establishment of the primary credit rate
in a financial emergency, and to delete
the provisions relating to the use of
credit ratings for collateral for
extensions of credit under the former
Term Asset-Backed Securities Loan
Facility (TALF). The proposed
amendments are intended to allow the
regulation to address circumstances in
which the Federal Open Market
Committee has established a target range
for the federal funds rate rather than a
single target rate, and to reflect the
expiration of the TALF program.
DATES: Comments must be received no
later than January 8, 2018.
ADDRESSES: You may submit comments,
identified by Docket Number R–1585;
RIN 7100 AE–90, by any of the
following methods:
• Agency Web site: https://
www.federalreserve.gov. Follow the
instructions for submitting comments at
https://www.federalreserve.gov/
generalinfo/foia/ProposedRegs.cfm.
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• Email: regs.comments@
federalreserve.gov. Include docket
number in the subject line of the
message.
• Fax: (202) 452–3819 or (202) 452–
3102.
• Mail: Ann E. Misback, Secretary,
Board of Governors of the Federal
Reserve System, 20th Street and
Constitution Avenue NW., Washington,
DC 20551.
sradovich on DSK3GMQ082PROD with PROPOSALS
SUMMARY:
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All public comments are available
from the Board’s Web site at https://
www.federalreserve.gov/generalinfo/
foia/ProposedRegs.cfm, as submitted,
unless modified for technical reasons.
Accordingly, your comments will not be
edited to remove any identifying or
contact information. Public comments
may also be viewed electronically or in
paper form in Room 3515, 1801 K Street
NW. (between 18th and 19th Street
NW.), between 9:00 a.m. and 5:00 p.m.
on weekdays.
FOR FURTHER INFORMATION CONTACT:
Sophia H. Allison, Special Counsel,
(202–452–3565), Legal Division, or Lyle
Kumasaka, Senior Financial Analyst,
202–452–2382), Division of
Monetary Affairs; for users of
Telecommunications Device for the Deaf
(TDD) only, contact 202/263–4869;
Board of Governors of the Federal
Reserve System, 20th and C Streets,
NW., Washington, DC 20551.
SUPPLEMENTARY INFORMATION: The
Federal Reserve Banks make primary,
secondary, and seasonal credit available
to depository institutions subject to
rules and regulations prescribed by the
Board. The primary, secondary, and
seasonal credit rates are the interest
rates that the twelve Federal Reserve
Banks charge for extensions of credit
under these programs. Under the
primary credit program, Federal Reserve
Banks may extend credit on a very
short-term basis, typically overnight, to
depository institutions that are in
generally sound condition in the
judgment of the Federal Reserve Bank.
In accordance with the Federal Reserve
Act, the primary credit rate is
established by the boards of directors of
the Federal Reserve Banks, subject to
the review and determination of the
Board. The primary credit rate is set
forth in section 201.51 of Regulation A.
I. Primary Credit Rate in a Financial
Emergency
Regulation A currently provides a
procedure for establishing the primary
credit rate in a financial emergency.
Section 201.51(d) of Regulation A
currently provides that the primary
credit rate at a Federal Reserve Bank is
‘‘the target federal funds rate of the
Federal Open Market Committee’’ if two
conditions are met.1 First, in a financial
1 Section 201.51(d)(1) of Regulation A, 12 CFR
201.51(d)(1).
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Frm 00001
Fmt 4702
Sfmt 4702
emergency the Reserve Bank must have
established the primary credit rate at
that rate.2 Second, the chairman of the
Board of Governors (or, in the
chairman’s absence, the chairman’s
designee) must certify that a quorum of
the Board is not available to act on the
Reserve Bank’s rate establishment.3
Finally, Regulation A defines a
‘‘financial emergency’’ as ‘‘a significant
disruption to the U.S. money markets
resulting from an act of war, military or
terrorist attack, natural disaster, or other
catastrophic event.’’ 4
The Federal Open Market Committee
(FOMC) currently establishes a target
range for the federal funds rate.
Accordingly, the Board proposes to
amend section 201.51(d)(1) of
Regulation A to provide that, in a
financial emergency, the primary credit
rate is the target federal funds rate or, if
the FOMC has established a target range
for the federal funds rate, a rate
corresponding to the top of the target
range.
II. Credit Ratings for TALF
On November 25, 2008, the Board and
Treasury announced the establishment
of the TALF. The TALF was intended to
assist financial markets in
accommodating the credit needs of
consumers and businesses of all sizes
during the financial crisis by facilitating
the issuance of asset-backed securities
(‘‘ABS’’) collateralized by a variety of
consumer and business loans; it was
also intended to improve market
conditions for ABS more generally. The
Board authorized the TALF pursuant to
the then-current provisions of section
13(3) of the Federal Reserve Act.5 All
TALF loans were extended by the
Federal Reserve Bank of New York
(‘‘FRBNY’’).6
On December 9, 2009, the Board
adopted an amendment to Regulation A
to provide a process by which the
FRBNY could determine the eligibility
of credit rating agencies and the ratings
2 Section 201.51(d)(1)(i) of Regulation A, 12 CFR
201.51(d)(1)(i).
3 Section 201.51(d)(1)(ii) of Regulation A, 12 CFR
201.51(d)(1)(ii).
4 Section 201.51(d)(2) of Regulation A, 12 CFR
201.51(d)(2).
5 Former 12 U.S.C. 343.
6 The U.S. Treasury Department—under the
Troubled Assets Relief Program (TARP) of the
Emergency Economic Stabilization Act of 2008—
provided $20 billion of credit protection to the
FRBNY in connection with the TALF. See https://
www.federalreserve.gov/monetarypolicy/talf.htm.
E:\FR\FM\08DEP1.SGM
08DEP1
Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Proposed Rules
they issue for use in the TALF, for
which the Board had expressly set a
particular credit rating requirement for
collateral offered by the borrower.7 The
purpose of the amendment was to
provide the FRBNY with a consistent
framework for determining the
eligibility of ratings issued by
individual credit rating agencies when
used in conjunction with a separate
asset-level risk assessment process.
Pursuant to this process, FRBNY
determined that ratings from five credit
ratings agencies became eligible for use
in TALF.
On June 30, 2010, the TALF was
closed for new loan extensions, and the
final outstanding TALF loan was repaid
in full in October 2014.8 Accordingly,
the Board proposes to delete current
section 201.3(d) of Regulation A as its
provisions are no longer necessary.
III. Administrative Law Matters
A. Regulatory Flexibility Act
Congress enacted the Regulatory
Flexibility Act (RFA) (5 U.S.C. 601 et
seq.) to address concerns related to the
effects of agency rules on small entities
and the Board is sensitive to the impact
its rules may impose on small entities.
The RFA requires agencies either to
provide an initial regulatory flexibility
analysis with a proposed rule or to
certify that the proposed rule will not
have a significant economic impact on
a substantial number of small entities.
Under regulations issued by the Small
Business Administration (SBA), a
depository institution is a ‘‘small entity’’
if it is an institution with assets of $550
million or less, determined by averaging
the assets reported on its four quarterly
financial statements for the preceding
year. A credit rating agency is a ‘‘small
entity’’ if it is a credit rating agency with
$15 million or less in assets.
sradovich on DSK3GMQ082PROD with PROPOSALS
1. Description of Small Entities Affected
Section 201.51(d) of Regulation A.
The proposed amendment to section
201.51(d) of Regulation A would affect
depository institutions that are able to
request primary credit from a Federal
Reserve Bank and that have $550
million or less in assets, determined by
averaging the assets reported on its four
quarterly financial statements for the
preceding year.9 Currently, there are
7 74
FR 65014 (December 9, 2009).
8 https://www.federalreserve.gov/monetarypolicy/
talf.htm.
9 U.S. Small Business Administration, Table of
Small Business Size Standards (eff. Oct. 1, 2017) at
28 (NAICS Codes 52110 (Commercial Banking),
52120 (Savings Institutions), 52130 (Credit Unions),
and 52190) (Other Depository Credit
Intermediation); see id. at 41 n. 8 (calculation of
asset size).
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18:45 Dec 07, 2017
Jkt 244001
1,567 depository institutions that are
able to request primary credit that meet
the definition of ‘‘small’’ business
entity, out of a total of 2,808 institutions
that are able to request primary credit.
Section 201.3(d) of Regulation A. The
proposed amendment to section
201.3(d) of Regulation A, relates to use
of credit ratings for borrowers under the
TALF program. A small credit rating
agency is one with $15.0 million or less
in assets.10
2. Economic Impacts on Small Entities
The Board certifies that the proposed
amendments will have no economic
impacts on any small entities.
Section 201.51(d) of Regulation A.
The proposed amendments to section
201.51(d) of Regulation A relate to the
establishment of a rate for primary
credit in a financial emergency. The
proposed amendments make a
ministerial amendment to conform the
provision to the current operating
framework of the FOMC in establishing
a target range for the federal funds rate.
The provision subject to the proposed
amendments affects the actions of the
Federal Reserve Banks and the Board,
and requires no action or changes in
procedures for any depository
institution, large or small, and so there
are no costs associated with the
proposed amendments. In addition, the
proposed amendments clarify the
operation of the provision for reducing
the primary credit rate in a financial
emergency from its current level to a
lower level based on the target federal
funds rate or the target range for the
federal funds rate. Any economic
impact of the proposed amendment on
small entities would be beneficial
because, if the emergency provision
took effect, they would be able to obtain
primary credit at an interest rate that
would be lower than the existing
primary credit rate. Accordingly, the
Board believes that a reasonable basis
exists for assuming costs would be de
minimis or insignificant for small
entities affected by the proposed
amendment.
Section 201.3(d) of Regulation A. The
proposed amendments to section
201.3(d) of Regulation A relate to
deleting obsolete provisions applicable
to credit extended under the TALF
program. Since the TALF program no
longer exists, the deletion of regulatory
provisions governing the use of credit
ratings in it will have no impact,
economic or otherwise, on any credit
ratings agency. Accordingly, the Board
10 U.S.
Small Business Administration, Table of
Small Business Size Standards (eff. Oct. 1, 2017) at
33 (NAICS Code 561450 (Credit Bureaus)).
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Frm 00002
Fmt 4702
Sfmt 4702
57887
believes that a reasonable basis exists
for assuming costs would be de minimis
or insignificant for small entities
affected by the proposed amendment.
B. Paperwork Reduction Act Analysis
Office of Management and Budget
(OMB) regulations implementing the
Paperwork Reduction Act (PRA) state
that agencies must submit ‘‘collections
of information’’ contained in proposed
rules published for public comment in
the Federal Register in accordance with
OMB regulations. OMB regulations
define a ‘‘collection of information’’ as
obtaining, causing to be obtained,
soliciting, or requiring the disclosure to
an agency, third parties or the public of
information by or for an agency ‘‘by
means of identical questions posed to,
or identical reporting, recordkeeping, or
disclosure requirements imposed on,
ten or more persons, whether such
collection of information is mandatory,
voluntary, or required to obtain or retain
a benefit.’’
In accordance with the PRA, the
Board reviewed the proposed rule under
the authority delegated to the Board by
OMB.
Section 201.51(d) of Regulation A.
The proposed amendments to section
201.51(d) contain no requirements
subject to the PRA. Specifically, the
proposed amendments do not require
any change to any collection of
information related to the primary credit
program under Regulation A, but apply
only to the process by which the Federal
Reserve Banks and the Board establish
the primary credit rate in a financial
emergency.
Section 201.3(d) of Regulation A. The
proposed amendments to section
201.3(d) of Regulation A contain no
requirements subject to the PRA.
C. Plain Language
Each Federal banking agency,
including the Board, is required to use
plain language in all proposed and final
rulemakings published after January 1,
2000. 12 U.S.C. 4809. The Board has
sought to present the proposed
amendments, to the extent possible, in
a simple and straightforward manner.
The Board invites comment on whether
there are additional steps that could be
taken to make the proposed
amendments easier to understand, such
as with respect to the organization of the
materials or the clarity of the
presentation.
List of Subjects in 12 CFR Part 201
Banks, Banking, Federal Reserve
System, Reporting and recordkeeping.
E:\FR\FM\08DEP1.SGM
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57888
Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Proposed Rules
Authority and Issuance
For the reasons set forth in the
preamble, the Board proposes to amend
12 CFR Chapter II 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) and (s), 343
et seq., 347a, 347b, 347c, 348 et seq., 357,
374, 374a, and 461.
§ 201.3
[Amended]
2. Section 201.3 is amended by
removing paragraph (e).
■ 3. Section 201.51 is amended by
revising paragraph (d)(1) introductory
text to read as follows:
■
§ 201.51 Interest rates applicable to credit
extended by a Federal Reserve Bank.
*
*
*
*
*
(d) * * *
(1) The primary credit rate at a
Federal Reserve Bank is the target
federal funds rate of the Federal Open
Market Committee or, if the Federal
Open Market Committee has set a target
range for the federal funds rate, the rate
corresponding to the top of the target
range, if:
*
*
*
*
*
By the Board of Governors of the Federal
Reserve System, December 1, 2017.
Ann E. Misback,
Secretary of the Board.
[FR Doc. 2017–26465 Filed 12–7–17; 8:45 am]
BILLING CODE 6210–01–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 71
[Docket No. FAA–2017–0953; Airspace
Docket No. 17–AEA–15]
Proposed Amendment of Class E
Airspace; Massena, NY
Federal Aviation
Administration (FAA), DOT.
ACTION: Notice of proposed rulemaking
(NPRM).
sradovich on DSK3GMQ082PROD with PROPOSALS
AGENCY:
This action proposes to
amend Class E surface airspace and
Class E airspace extending upward from
700 feet above the surface at Massena,
NY, as the Massena collocated VHF
omnidirectional range tactical air
navigation system (VORTAC) has been
decommissioned, requiring airspace
reconfiguration at Massena
SUMMARY:
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18:45 Dec 07, 2017
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International-Richards Field Airport.
Controlled airspace is necessary for the
safety and management of instrument
flight rules (IFR) operations at the
airport. This action also would update
the geographic coordinates of the
airport.
DATES: Comments must be received on
or before January 22, 2018.
ADDRESSES: Send comments on this rule
to: U. S. Department of Transportation,
Docket Operations, 1200 New Jersey
Avenue SE., West Bldg Ground Floor
Rm W12–140, Washington, DC, 20590;
Telephone: 1(800) 647–5527, or (202)
366–9826.You must identify the Docket
No. FAA–2017–0953; Airspace Docket
No. 17–AEA–15, at the beginning of
your comments. You may also submit
and review received comments through
the Internet at https://
www.regulations.gov. You may review
the public docket containing the
proposal, any comments received, and
any final disposition in person in the
Dockets Office between 9:00 a.m. and
5:00 p.m., Monday through Friday,
except federal holidays.
FAA Order 7400.11B, Airspace
Designations and Reporting Points, and
subsequent amendments can be viewed
on line at https://www.faa.gov/air_
traffic/publications/. For further
information, you can contact the
Airspace Policy Group, Federal Aviation
Administration, 800 Independence
Avenue SW., Washington, DC, 20591;
telephone: (202) 267–8783. The Order is
also available for inspection at the
National Archives and Records
Administration (NARA). For
information on the availability of FAA
Order 7400.11B at NARA, call (202)
741–6030, or go to https://
www.archives.gov/federal-register/cfr/
ibr-locations.html.
FAA Order 7400.11, Airspace
Designations and Reporting Points, is
published yearly and effective on
September 15.
FOR FURTHER INFORMATION CONTACT: John
Fornito, Operations Support Group,
Eastern Service Center, Federal Aviation
Administration, P.O. Box 20636,
Atlanta, Georgia 30320; telephone (404)
305–6364.
SUPPLEMENTARY INFORMATION:
Authority for This Rulemaking
The FAA’s authority to issue rules
regarding aviation safety is found in
Title 49 of the United States Code.
Subtitle I, Section 106 describes the
authority of the FAA Administrator.
Subtitle VII, Aviation Programs,
describes in more detail the scope of the
agency’s authority. This proposed
rulemaking is promulgated under the
PO 00000
Frm 00003
Fmt 4702
Sfmt 4702
authority described in Subtitle VII, Part
A, Subpart I, Section 40103. Under that
section, the FAA is charged with
prescribing regulations to assign the use
of airspace necessary to ensure the
safety of aircraft and the efficient use of
airspace. This regulation is within the
scope of that authority as it would
amend Class E surface airspace and
Class E airspace extending upward from
700 feet above the surface at Massena
International-Richards Field Airport,
Massena, NY, to support IFR operations
at the airport.
SUPPLEMENTARY INFORMATION:
Comments Invited
Interested persons are invited to
comment on this rule by submitting
such written data, views, or arguments,
as they may desire. Comments that
provide the factual basis supporting the
views and suggestions presented are
particularly helpful in developing
reasoned regulatory decisions on the
proposal. Comments are specifically
invited on the overall regulatory,
aeronautical, economic, environmental,
and energy-related aspects of the
proposal.
Communications should identify both
docket numbers (FAA Docket No. FAA–
2017–0953; Airspace Docket No. 17–
AEA–15) and be submitted in triplicate
to the Docket Management System (see
ADDRESSES section for address and
phone number). You may also submit
comments through the Internet at https://
www.regulations.gov.
Persons wishing the FAA to
acknowledge receipt of their comments
on this action must submit with those
comments a self-addressed stamped
postcard on which the following
statement is made: ‘‘Comments to
Docket No. FAA–2014–0953; Airspace
Docket No. 17–AEA–15.’’ The postcard
will be date/time stamped and returned
to the commenter.
All communications received before
the specified closing date for comments
will be considered before taking action
on the proposed rule. The proposal
contained in this notice may be changed
in light of the comments received. A
report summarizing each substantive
public contact with FAA personnel
concerned with this rulemaking will be
filed in the docket.
Availability of NPRMs
An electronic copy of this document
may be downloaded from and
comments submitted through https://
www.regulations.gov. Recently
published rulemaking documents can
also be accessed through the FAA’s Web
page at https://www.faa.gov/
E:\FR\FM\08DEP1.SGM
08DEP1
Agencies
[Federal Register Volume 82, Number 235 (Friday, December 8, 2017)]
[Proposed Rules]
[Pages 57886-57888]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-26465]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 /
Proposed Rules
[[Page 57886]]
FEDERAL RESERVE SYSTEM
12 CFR Part 201
[Docket No. R-1585; RIN 7100-AE 90]
Regulation A: Extensions of Credit by Federal Reserve Banks
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Board of Governors of the Federal Reserve System
(``Board'') is proposing to amend its Regulation A to; revise the
provisions regarding the establishment of the primary credit rate in a
financial emergency, and to delete the provisions relating to the use
of credit ratings for collateral for extensions of credit under the
former Term Asset-Backed Securities Loan Facility (TALF). The proposed
amendments are intended to allow the regulation to address
circumstances in which the Federal Open Market Committee has
established a target range for the federal funds rate rather than a
single target rate, and to reflect the expiration of the TALF program.
DATES: Comments must be received no later than January 8, 2018.
ADDRESSES: You may submit comments, identified by Docket Number R-1585;
RIN 7100 AE-90, by any of the following methods:
Agency Web site: https://www.federalreserve.gov. Follow the
instructions for submitting comments at https://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments.
Email: [email protected]. Include docket
number in the subject line of the message.
Fax: (202) 452-3819 or (202) 452-3102.
Mail: Ann E. Misback, Secretary, Board of Governors of the
Federal Reserve System, 20th Street and Constitution Avenue NW.,
Washington, DC 20551.
All public comments are available from the Board's Web site at
https://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm, as
submitted, unless modified for technical reasons. Accordingly, your
comments will not be edited to remove any identifying or contact
information. Public comments may also be viewed electronically or in
paper form in Room 3515, 1801 K Street NW. (between 18th and 19th
Street NW.), between 9:00 a.m. and 5:00 p.m. on weekdays.
FOR FURTHER INFORMATION CONTACT: Sophia H. Allison, Special Counsel,
(202-452-3565), Legal Division, or Lyle Kumasaka, Senior Financial
Analyst, 202-452-2382), Division of Monetary Affairs; for users of
Telecommunications Device for the Deaf (TDD) only, contact 202/263-
4869; Board of Governors of the Federal Reserve System, 20th and C
Streets, NW., Washington, DC 20551.
SUPPLEMENTARY INFORMATION: The Federal Reserve Banks make primary,
secondary, and seasonal credit available to depository institutions
subject to rules and regulations prescribed by the Board. The primary,
secondary, and seasonal credit rates are the interest rates that the
twelve Federal Reserve Banks charge for extensions of credit under
these programs. Under the primary credit program, Federal Reserve Banks
may extend credit on a very short-term basis, typically overnight, to
depository institutions that are in generally sound condition in the
judgment of the Federal Reserve Bank. In accordance with the Federal
Reserve Act, the primary credit rate is established by the boards of
directors of the Federal Reserve Banks, subject to the review and
determination of the Board. The primary credit rate is set forth in
section 201.51 of Regulation A.
I. Primary Credit Rate in a Financial Emergency
Regulation A currently provides a procedure for establishing the
primary credit rate in a financial emergency. Section 201.51(d) of
Regulation A currently provides that the primary credit rate at a
Federal Reserve Bank is ``the target federal funds rate of the Federal
Open Market Committee'' if two conditions are met.\1\ First, in a
financial emergency the Reserve Bank must have established the primary
credit rate at that rate.\2\ Second, the chairman of the Board of
Governors (or, in the chairman's absence, the chairman's designee) must
certify that a quorum of the Board is not available to act on the
Reserve Bank's rate establishment.\3\ Finally, Regulation A defines a
``financial emergency'' as ``a significant disruption to the U.S. money
markets resulting from an act of war, military or terrorist attack,
natural disaster, or other catastrophic event.'' \4\
---------------------------------------------------------------------------
\1\ Section 201.51(d)(1) of Regulation A, 12 CFR 201.51(d)(1).
\2\ Section 201.51(d)(1)(i) of Regulation A, 12 CFR
201.51(d)(1)(i).
\3\ Section 201.51(d)(1)(ii) of Regulation A, 12 CFR
201.51(d)(1)(ii).
\4\ Section 201.51(d)(2) of Regulation A, 12 CFR 201.51(d)(2).
---------------------------------------------------------------------------
The Federal Open Market Committee (FOMC) currently establishes a
target range for the federal funds rate. Accordingly, the Board
proposes to amend section 201.51(d)(1) of Regulation A to provide that,
in a financial emergency, the primary credit rate is the target federal
funds rate or, if the FOMC has established a target range for the
federal funds rate, a rate corresponding to the top of the target
range.
II. Credit Ratings for TALF
On November 25, 2008, the Board and Treasury announced the
establishment of the TALF. The TALF was intended to assist financial
markets in accommodating the credit needs of consumers and businesses
of all sizes during the financial crisis by facilitating the issuance
of asset-backed securities (``ABS'') collateralized by a variety of
consumer and business loans; it was also intended to improve market
conditions for ABS more generally. The Board authorized the TALF
pursuant to the then-current provisions of section 13(3) of the Federal
Reserve Act.\5\ All TALF loans were extended by the Federal Reserve
Bank of New York (``FRBNY'').\6\
---------------------------------------------------------------------------
\5\ Former 12 U.S.C. 343.
\6\ The U.S. Treasury Department--under the Troubled Assets
Relief Program (TARP) of the Emergency Economic Stabilization Act of
2008--provided $20 billion of credit protection to the FRBNY in
connection with the TALF. See https://www.federalreserve.gov/monetarypolicy/talf.htm.
---------------------------------------------------------------------------
On December 9, 2009, the Board adopted an amendment to Regulation A
to provide a process by which the FRBNY could determine the eligibility
of credit rating agencies and the ratings
[[Page 57887]]
they issue for use in the TALF, for which the Board had expressly set a
particular credit rating requirement for collateral offered by the
borrower.\7\ The purpose of the amendment was to provide the FRBNY with
a consistent framework for determining the eligibility of ratings
issued by individual credit rating agencies when used in conjunction
with a separate asset-level risk assessment process. Pursuant to this
process, FRBNY determined that ratings from five credit ratings
agencies became eligible for use in TALF.
---------------------------------------------------------------------------
\7\ 74 FR 65014 (December 9, 2009).
---------------------------------------------------------------------------
On June 30, 2010, the TALF was closed for new loan extensions, and
the final outstanding TALF loan was repaid in full in October 2014.\8\
Accordingly, the Board proposes to delete current section 201.3(d) of
Regulation A as its provisions are no longer necessary.
---------------------------------------------------------------------------
\8\ https://www.federalreserve.gov/monetarypolicy/talf.htm.
---------------------------------------------------------------------------
III. Administrative Law Matters
A. Regulatory Flexibility Act
Congress enacted the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
et seq.) to address concerns related to the effects of agency rules on
small entities and the Board is sensitive to the impact its rules may
impose on small entities. The RFA requires agencies either to provide
an initial regulatory flexibility analysis with a proposed rule or to
certify that the proposed rule will not have a significant economic
impact on a substantial number of small entities. Under regulations
issued by the Small Business Administration (SBA), a depository
institution is a ``small entity'' if it is an institution with assets
of $550 million or less, determined by averaging the assets reported on
its four quarterly financial statements for the preceding year. A
credit rating agency is a ``small entity'' if it is a credit rating
agency with $15 million or less in assets.
1. Description of Small Entities Affected
Section 201.51(d) of Regulation A. The proposed amendment to
section 201.51(d) of Regulation A would affect depository institutions
that are able to request primary credit from a Federal Reserve Bank and
that have $550 million or less in assets, determined by averaging the
assets reported on its four quarterly financial statements for the
preceding year.\9\ Currently, there are 1,567 depository institutions
that are able to request primary credit that meet the definition of
``small'' business entity, out of a total of 2,808 institutions that
are able to request primary credit.
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\9\ U.S. Small Business Administration, Table of Small Business
Size Standards (eff. Oct. 1, 2017) at 28 (NAICS Codes 52110
(Commercial Banking), 52120 (Savings Institutions), 52130 (Credit
Unions), and 52190) (Other Depository Credit Intermediation); see
id. at 41 n. 8 (calculation of asset size).
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Section 201.3(d) of Regulation A. The proposed amendment to section
201.3(d) of Regulation A, relates to use of credit ratings for
borrowers under the TALF program. A small credit rating agency is one
with $15.0 million or less in assets.\10\
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\10\ U.S. Small Business Administration, Table of Small Business
Size Standards (eff. Oct. 1, 2017) at 33 (NAICS Code 561450 (Credit
Bureaus)).
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2. Economic Impacts on Small Entities
The Board certifies that the proposed amendments will have no
economic impacts on any small entities.
Section 201.51(d) of Regulation A. The proposed amendments to
section 201.51(d) of Regulation A relate to the establishment of a rate
for primary credit in a financial emergency. The proposed amendments
make a ministerial amendment to conform the provision to the current
operating framework of the FOMC in establishing a target range for the
federal funds rate. The provision subject to the proposed amendments
affects the actions of the Federal Reserve Banks and the Board, and
requires no action or changes in procedures for any depository
institution, large or small, and so there are no costs associated with
the proposed amendments. In addition, the proposed amendments clarify
the operation of the provision for reducing the primary credit rate in
a financial emergency from its current level to a lower level based on
the target federal funds rate or the target range for the federal funds
rate. Any economic impact of the proposed amendment on small entities
would be beneficial because, if the emergency provision took effect,
they would be able to obtain primary credit at an interest rate that
would be lower than the existing primary credit rate. Accordingly, the
Board believes that a reasonable basis exists for assuming costs would
be de minimis or insignificant for small entities affected by the
proposed amendment.
Section 201.3(d) of Regulation A. The proposed amendments to
section 201.3(d) of Regulation A relate to deleting obsolete provisions
applicable to credit extended under the TALF program. Since the TALF
program no longer exists, the deletion of regulatory provisions
governing the use of credit ratings in it will have no impact, economic
or otherwise, on any credit ratings agency. Accordingly, the Board
believes that a reasonable basis exists for assuming costs would be de
minimis or insignificant for small entities affected by the proposed
amendment.
B. Paperwork Reduction Act Analysis
Office of Management and Budget (OMB) regulations implementing the
Paperwork Reduction Act (PRA) state that agencies must submit
``collections of information'' contained in proposed rules published
for public comment in the Federal Register in accordance with OMB
regulations. OMB regulations define a ``collection of information'' as
obtaining, causing to be obtained, soliciting, or requiring the
disclosure to an agency, third parties or the public of information by
or for an agency ``by means of identical questions posed to, or
identical reporting, recordkeeping, or disclosure requirements imposed
on, ten or more persons, whether such collection of information is
mandatory, voluntary, or required to obtain or retain a benefit.''
In accordance with the PRA, the Board reviewed the proposed rule
under the authority delegated to the Board by OMB.
Section 201.51(d) of Regulation A. The proposed amendments to
section 201.51(d) contain no requirements subject to the PRA.
Specifically, the proposed amendments do not require any change to any
collection of information related to the primary credit program under
Regulation A, but apply only to the process by which the Federal
Reserve Banks and the Board establish the primary credit rate in a
financial emergency.
Section 201.3(d) of Regulation A. The proposed amendments to
section 201.3(d) of Regulation A contain no requirements subject to the
PRA.
C. Plain Language
Each Federal banking agency, including the Board, is required to
use plain language in all proposed and final rulemakings published
after January 1, 2000. 12 U.S.C. 4809. The Board has sought to present
the proposed amendments, to the extent possible, in a simple and
straightforward manner. The Board invites comment on whether there are
additional steps that could be taken to make the proposed amendments
easier to understand, such as with respect to the organization of the
materials or the clarity of the presentation.
List of Subjects in 12 CFR Part 201
Banks, Banking, Federal Reserve System, Reporting and
recordkeeping.
[[Page 57888]]
Authority and Issuance
For the reasons set forth in the preamble, the Board proposes to
amend 12 CFR Chapter II 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) and (s), 343 et seq., 347a,
347b, 347c, 348 et seq., 357, 374, 374a, and 461.
Sec. 201.3 [Amended]
0
2. Section 201.3 is amended by removing paragraph (e).
0
3. Section 201.51 is amended by revising paragraph (d)(1) introductory
text to read as follows:
Sec. 201.51 Interest rates applicable to credit extended by a
Federal Reserve Bank.
* * * * *
(d) * * *
(1) The primary credit rate at a Federal Reserve Bank is the target
federal funds rate of the Federal Open Market Committee or, if the
Federal Open Market Committee has set a target range for the federal
funds rate, the rate corresponding to the top of the target range, if:
* * * * *
By the Board of Governors of the Federal Reserve System,
December 1, 2017.
Ann E. Misback,
Secretary of the Board.
[FR Doc. 2017-26465 Filed 12-7-17; 8:45 am]
BILLING CODE 6210-01-P