Regulation A: Extensions of Credit by Federal Reserve Banks, 57886-57888 [2017-26465]

Download as PDF 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: VerDate Sep<11>2014 18:45 Dec 07, 2017 Jkt 244001 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). PO 00000 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). VerDate Sep<11>2014 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)). PO 00000 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 08DEP1 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: VerDate Sep<11>2014 18:45 Dec 07, 2017 Jkt 244001 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.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \10\ U.S. Small Business Administration, Table of Small Business 
Size Standards (eff. Oct. 1, 2017) at 33 (NAICS Code 561450 (Credit 
Bureaus)).
---------------------------------------------------------------------------

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
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.