Regulation D: Reserve Requirements of Depository Institutions, 52753-52754 [2019-21346]
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Federal Register / Vol. 84, No. 192 / Thursday, October 3, 2019 / Rules and Regulations
2. In § 201.51, paragraphs (a) and (b)
are revised to read as follows:
■
§ 201.51 Interest rates applicable to credit
extended by a Federal Reserve Bank.3
(a) Primary credit. The interest rate at
each Federal Reserve Bank for primary
credit provided to depository
institutions under § 201.4(a) is 2.50
percent.
(b) Secondary credit. The interest rate
at each Federal Reserve Bank for
secondary credit provided to depository
institutions under § 201.4(b) is 3.00
percent.
*
*
*
*
*
By order of the Board of Governors of the
Federal Reserve System, September 25, 2019.
Ann Misback,
Secretary of the Board.
[FR Doc. 2019–21344 Filed 10–2–19; 8:45 am]
BILLING CODE 6210–02–P
FEDERAL RESERVE SYSTEM
12 CFR Part 204
[Docket No. R–1675]
RIN 7100–AF 58
Regulation D: Reserve Requirements
of Depository Institutions
Board of Governors of the
Federal Reserve System.
ACTION: Final rule.
AGENCY:
The Board of Governors of the
Federal Reserve System (‘‘Board’’) is
amending Regulation D (Reserve
Requirements of Depository Institutions)
to revise the rate of interest paid on
balances maintained to satisfy reserve
balance requirements (‘‘IORR’’) and the
rate of interest paid on excess balances
(‘‘IOER’’) maintained at Federal Reserve
Banks by or on behalf of eligible
institutions. The final amendments
specify that IORR is 1.80 percent and
IOER is 1.80 percent, a 0.30 percentage
point decrease from their prior levels.
The amendments are intended to
enhance the role of such rates of interest
in moving the Federal funds rate into
the target range established by the
Federal Open Market Committee
(‘‘FOMC’’ or ‘‘Committee’’).
DATES:
Effective date: The amendments to
part 204 (Regulation D) are effective
October 3, 2019.
SUMMARY:
Applicability date: The IORR and
IOER rate changes were applicable on
September 19, 2019.
FOR FURTHER INFORMATION CONTACT:
Sophia H. Allison, Senior Special
Counsel (202–452–3565), Legal
Division, or Francis Martinez, Senior
Financial Institution & Policy Analyst
(202–245–4217), or Laura Lipscomb,
Assistant Director (202–912–7964),
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:
I. Statutory and Regulatory Background
For monetary policy purposes, section
19 of the Federal Reserve Act (‘‘the
Act’’) imposes reserve requirements on
certain types of deposits and other
liabilities of depository institutions.1
Regulation D, which implements section
19 of the Act, requires that a depository
institution meet reserve requirements by
holding cash in its vault, or if vault cash
is insufficient, by maintaining a balance
in an account at a Federal Reserve Bank
(‘‘Reserve Bank’’).2 Section 19 also
provides that balances maintained by or
on behalf of certain institutions in an
account at a Reserve Bank may receive
earnings to be paid by the Reserve Bank
at least once each quarter, at a rate or
rates not to exceed the general level of
short-term interest rates.3 Institutions
that are eligible to receive earnings on
their balances held at Reserve Banks
(‘‘eligible institutions’’) include
depository institutions and certain other
institutions.4 Section 19 also provides
that the Board may prescribe regulations
concerning the payment of earnings on
balances at a Reserve Bank.5 Prior to
these amendments, Regulation D
specified a rate of 2.10 percent for both
IORR and IOER.6
II. Amendments to IORR and IOER
The Board is amending § 204.10(b)(5)
of Regulation D to specify that IORR is
1.80 percent and IOER is 1.80 percent.
This 0.30 percentage point decrease in
each rate was associated with a decrease
in the target range for the federal funds
rate, from a target range of 2 to 21⁄4
percent to a target range of 13⁄4 to 2
percent, announced by the FOMC on
September 18, 2019, with an effective
1 12
U.S.C. 461(b).
CFR 204.5(a)(1).
3 12 U.S.C. 461(b)(1)(A) & (b)(12)(A).
4 See 12 U.S.C. 461(b)(1)(A) & (b)(12)(C); see also
12 CFR 204.2(y).
5 See 12 U.S.C. 461(b)(12)(B).
6 See 12 CFR 204.10(b)(5).
2 12
3 The primary, secondary, and seasonal credit
rates described in this section apply to both
advances and discounts made under the primary,
secondary, and seasonal credit programs,
respectively.
VerDate Sep<11>2014
16:33 Oct 02, 2019
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Fmt 4700
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52753
date of September 19, 2019. The
FOMC’s press release on the same day
as the announcement noted that:
Information received since the Federal
Open Market Committee met in July
indicates that the labor market remains
strong and that economic activity has been
rising at a moderate rate. Job gains have been
solid, on average, in recent months, and the
unemployment rate has remained low.
Although household spending has been
rising at a strong pace, business fixed
investment and exports have weakened. On
a 12-month basis, overall inflation and
inflation for items other than food and energy
are running below 2 percent. Market-based
measures of inflation compensation remain
low; survey-based measures of longer-term
inflation expectations are little changed.
Consistent with its statutory mandate, the
Committee seeks to foster maximum
employment and price stability. In light of
the implications of global developments for
the economic outlook as well as muted
inflation pressures, the Committee decided to
lower the target range for the federal funds
rate to 13⁄4 to 2 percent. This action supports
the Committee’s view that sustained
expansion of economic activity, strong labor
market conditions, and inflation near the
Committee’s symmetric 2 percent objective
are the most likely outcomes, but
uncertainties about this outlook remain. As
the Committee contemplates the future path
of the target range for the federal funds rate,
it will continue to monitor the implications
of incoming information for the economic
outlook and will act as appropriate to sustain
the expansion, with a strong labor market
and inflation near its symmetric 2 percent
objective.
A Federal Reserve Implementation
note released simultaneously with the
announcement stated:
The Board of Governors of the Federal
Reserve System voted unanimously to lower
the interest rate paid on required and excess
reserve balances to 1.80 percent, effective
September 19, 2019. Setting the interest rate
paid on required and excess reserve balances
20 basis points below the top of the target
range for the federal funds rate is intended
to foster trading in the federal funds market
at rates well within the FOMC’s target range.
As a result, the Board is amending
§ 204.10(b)(5) of Regulation D to change
IORR to 1.80 percent and IOER to 1.80
percent.
III. Administrative Procedure Act
In general, the Administrative
Procedure Act (‘‘APA’’) 7 imposes three
principal requirements when an agency
promulgates legislative rules (rules
made pursuant to Congressionallydelegated authority): (1) Publication
with adequate notice of a proposed rule;
(2) followed by a meaningful
opportunity for the public to comment
on the rule’s content; and (3)
75
U.S.C. 551 et seq.
E:\FR\FM\03OCR1.SGM
03OCR1
52754
Federal Register / Vol. 84, No. 192 / Thursday, October 3, 2019 / Rules and Regulations
publication of the final rule not less
than 30 days before its effective date.
The APA provides that notice and
comment procedures do not apply if the
agency for good cause finds them to be
‘‘unnecessary, impracticable, or contrary
to the public interest.’’ 8 Section 553(d)
of the APA also provides that
publication at least 30 days prior to a
rule’s effective date is not required for
(1) a substantive rule which grants or
recognizes an exemption or relieves a
restriction; (2) interpretive rules and
statements of policy; or (3) a rule for
which the agency finds good cause for
shortened notice and publishes its
reasoning with the rule.9
The Board has determined that good
cause exists for finding that the notice,
public comment, and delayed effective
date provisions of the APA are
unnecessary, impracticable, or contrary
to the public interest with respect to
these final amendments to Regulation D.
The rate changes for IORR and IOER
that are reflected in the final
amendments to Regulation D were made
with a view towards accommodating
commerce and business and with regard
to their bearing upon the general credit
situation of the country.
Notice and public comment would
prevent the Board’s action from being
effective as promptly as necessary in the
public interest and would not otherwise
serve any useful purpose. Notice, public
comment, and a delayed effective date
would create uncertainty about the
finality and effectiveness of the Board’s
action and undermine the effectiveness
of that action.
Accordingly, the Board has
determined that good cause exists to
dispense with the notice, public
comment, and delayed effective date
procedures of the APA with respect to
these final amendments to Regulation D.
IV. Regulatory Flexibility Analysis
The Regulatory Flexibility Act
(‘‘RFA’’) does not apply to a rulemaking
where a general notice of proposed
rulemaking is not required.10 As noted
previously, the Board has determined
that it is unnecessary and contrary to
the public interest to publish a general
notice of proposed rulemaking for this
final rule. Accordingly, the RFA’s
requirements relating to an initial and
final regulatory flexibility analysis do
not apply.
U.S.C. 553(b)(3)(A).
U.S.C. 553(d).
10 5 U.S.C. 603, 604.
V. Paperwork Reduction Act
In accordance with the Paperwork
Reduction Act (‘‘PRA’’) of 1995,11 the
Board reviewed the final rule under the
authority delegated to the Board by the
Office of Management and Budget. The
final rule contains no requirements
subject to the PRA.
The FAA is adopting a new
airworthiness directive (AD) for all The
Boeing Company Model 737–600, –700,
–700C, –800, –900, and –900ER series
airplanes. This AD requires repetitive
inspections for cracking of the left and
right hand side outboard chords of
List of Subjects in 12 CFR Part 204
frame fittings and failsafe straps at a
Banks, Banking, Reporting and
certain station, and repair if any
recordkeeping requirements.
cracking is found. This AD was
For the reasons set forth in the
prompted by reports of cracking
preamble, the Board amends 12 CFR
discovered in this area. The FAA is
part 204 as follows:
issuing this AD to address the unsafe
condition on these products.
PART 204—RESERVE
DATES: This AD is effective October 3,
REQUIREMENTS OF DEPOSITORY
2019.
INSTITUTIONS (REGULATION D)
The Director of the Federal Register
approved the incorporation by reference
■ 1. The authority citation for part 204
of a certain publication listed in this AD
continues to read as follows:
as of October 3, 2019.
Authority: 12 U.S.C. 248(a), 248(c), 461,
The FAA must receive comments on
601, 611, and 3105.
this AD by November 18, 2019.
■ 2. Section 204.10 is amended by
ADDRESSES: You may send comments,
revising paragraph (b)(5) to read as
using the procedures found in 14 CFR
follows:
11.43 and 11.45, by any of the following
methods:
§ 204.10 Payment of interest on balances.
• Federal eRulemaking Portal: Go to
*
*
*
*
*
https://www.regulations.gov. Follow the
(b) * * *
instructions for submitting comments.
(5) The rates for IORR and IOER are:
• Fax: 202–493–2251.
• Mail: U.S. Department of
TABLE 1 TO PARAGRAPH (b)(5)
Transportation, Docket Operations, M–
30, West Building Ground Floor, Room
Rate
W12–140, 1200 New Jersey Avenue SE,
(percent)
Washington, DC 20590.
• Hand Delivery: Deliver to Mail
IORR ...........................................
1.80
IOER ...........................................
1.80 address above between 9 a.m. and 5
p.m., Monday through Friday, except
Federal holidays.
*
*
*
*
*
For service information identified in
By order of the Board of Governors of the
this final rule, contact Boeing
Federal Reserve System, September 25, 2019. Commercial Airplanes, Attention:
Ann Misback,
Contractual & Data Services (C&DS),
Secretary of the Board.
2600 Westminster Blvd., MC 110–SK57,
[FR Doc. 2019–21346 Filed 10–2–19; 8:45 am]
Seal Beach, CA 90740–5600; telephone
562–797–1717; internet https://
BILLING CODE 6210–01–P
www.myboeingfleet.com. You may view
this service information at the FAA,
DEPARTMENT OF TRANSPORTATION Transport Standards Branch, 2200
South 216th St., Des Moines, WA. For
Federal Aviation Administration
information on the availability of this
material at the FAA, call 206–231–3195.
14 CFR Part 39
It is also available on the internet at
https://www.regulations.gov by searching
[Docket No. FAA–2019–0711; Product
for and locating Docket No. FAA–2019–
Identifier 2019–NM–167–AD; Amendment
0711.
39–19755; AD 2019–20–02]
RIN 2120–AA64
Airworthiness Directives; The Boeing
Company Airplanes
Federal Aviation
Administration (FAA), DOT.
AGENCY:
85
95
VerDate Sep<11>2014
16:33 Oct 02, 2019
11 44
U.S.C. 3506; see 5 CFR part 1320, appendix
A.1.
Jkt 250001
Final rule; request for
comments.
ACTION:
PO 00000
Frm 00008
Fmt 4700
Sfmt 4700
SUMMARY:
Examining the AD Docket
You may examine the AD docket on
the internet at https://
www.regulations.gov by searching for
and locating Docket No. FAA–2019–
0711; or in person at Docket Operations
between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
The AD docket contains this final rule,
E:\FR\FM\03OCR1.SGM
03OCR1
]]>Agencies
[Federal Register Volume 84, Number 192 (Thursday, October 3, 2019)]
[Rules and Regulations]
[Pages 52753-52754]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-21346]
-----------------------------------------------------------------------
FEDERAL RESERVE SYSTEM
12 CFR Part 204
[Docket No. R-1675]
RIN 7100-AF 58
Regulation D: Reserve Requirements of Depository Institutions
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Board of Governors of the Federal Reserve System
(``Board'') is amending Regulation D (Reserve Requirements of
Depository Institutions) to revise the rate of interest paid on
balances maintained to satisfy reserve balance requirements (``IORR'')
and the rate of interest paid on excess balances (``IOER'') maintained
at Federal Reserve Banks by or on behalf of eligible institutions. The
final amendments specify that IORR is 1.80 percent and IOER is 1.80
percent, a 0.30 percentage point decrease from their prior levels. The
amendments are intended to enhance the role of such rates of interest
in moving the Federal funds rate into the target range established by
the Federal Open Market Committee (``FOMC'' or ``Committee'').
DATES:
Effective date: The amendments to part 204 (Regulation D) are
effective October 3, 2019.
Applicability date: The IORR and IOER rate changes were applicable
on September 19, 2019.
FOR FURTHER INFORMATION CONTACT: Sophia H. Allison, Senior Special
Counsel (202-452-3565), Legal Division, or Francis Martinez, Senior
Financial Institution & Policy Analyst (202-245-4217), or Laura
Lipscomb, Assistant Director (202-912-7964), 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:
I. Statutory and Regulatory Background
For monetary policy purposes, section 19 of the Federal Reserve Act
(``the Act'') imposes reserve requirements on certain types of deposits
and other liabilities of depository institutions.\1\ Regulation D,
which implements section 19 of the Act, requires that a depository
institution meet reserve requirements by holding cash in its vault, or
if vault cash is insufficient, by maintaining a balance in an account
at a Federal Reserve Bank (``Reserve Bank'').\2\ Section 19 also
provides that balances maintained by or on behalf of certain
institutions in an account at a Reserve Bank may receive earnings to be
paid by the Reserve Bank at least once each quarter, at a rate or rates
not to exceed the general level of short-term interest rates.\3\
Institutions that are eligible to receive earnings on their balances
held at Reserve Banks (``eligible institutions'') include depository
institutions and certain other institutions.\4\ Section 19 also
provides that the Board may prescribe regulations concerning the
payment of earnings on balances at a Reserve Bank.\5\ Prior to these
amendments, Regulation D specified a rate of 2.10 percent for both IORR
and IOER.\6\
---------------------------------------------------------------------------
\1\ 12 U.S.C. 461(b).
\2\ 12 CFR 204.5(a)(1).
\3\ 12 U.S.C. 461(b)(1)(A) & (b)(12)(A).
\4\ See 12 U.S.C. 461(b)(1)(A) & (b)(12)(C); see also 12 CFR
204.2(y).
\5\ See 12 U.S.C. 461(b)(12)(B).
\6\ See 12 CFR 204.10(b)(5).
---------------------------------------------------------------------------
II. Amendments to IORR and IOER
The Board is amending Sec. 204.10(b)(5) of Regulation D to specify
that IORR is 1.80 percent and IOER is 1.80 percent. This 0.30
percentage point decrease in each rate was associated with a decrease
in the target range for the federal funds rate, from a target range of
2 to 2\1/4\ percent to a target range of 1\3/4\ to 2 percent, announced
by the FOMC on September 18, 2019, with an effective date of September
19, 2019. The FOMC's press release on the same day as the announcement
noted that:
Information received since the Federal Open Market Committee met
in July indicates that the labor market remains strong and that
economic activity has been rising at a moderate rate. Job gains have
been solid, on average, in recent months, and the unemployment rate
has remained low. Although household spending has been rising at a
strong pace, business fixed investment and exports have weakened. On
a 12-month basis, overall inflation and inflation for items other
than food and energy are running below 2 percent. Market-based
measures of inflation compensation remain low; survey-based measures
of longer-term inflation expectations are little changed.
Consistent with its statutory mandate, the Committee seeks to
foster maximum employment and price stability. In light of the
implications of global developments for the economic outlook as well
as muted inflation pressures, the Committee decided to lower the
target range for the federal funds rate to 1\3/4\ to 2 percent. This
action supports the Committee's view that sustained expansion of
economic activity, strong labor market conditions, and inflation
near the Committee's symmetric 2 percent objective are the most
likely outcomes, but uncertainties about this outlook remain. As the
Committee contemplates the future path of the target range for the
federal funds rate, it will continue to monitor the implications of
incoming information for the economic outlook and will act as
appropriate to sustain the expansion, with a strong labor market and
inflation near its symmetric 2 percent objective.
A Federal Reserve Implementation note released simultaneously with
the announcement stated:
The Board of Governors of the Federal Reserve System voted
unanimously to lower the interest rate paid on required and excess
reserve balances to 1.80 percent, effective September 19, 2019.
Setting the interest rate paid on required and excess reserve
balances 20 basis points below the top of the target range for the
federal funds rate is intended to foster trading in the federal
funds market at rates well within the FOMC's target range.
As a result, the Board is amending Sec. 204.10(b)(5) of Regulation
D to change IORR to 1.80 percent and IOER to 1.80 percent.
III. Administrative Procedure Act
In general, the Administrative Procedure Act (``APA'') \7\ imposes
three principal requirements when an agency promulgates legislative
rules (rules made pursuant to Congressionally-delegated authority): (1)
Publication with adequate notice of a proposed rule; (2) followed by a
meaningful opportunity for the public to comment on the rule's content;
and (3)
[[Page 52754]]
publication of the final rule not less than 30 days before its
effective date.
The APA provides that notice and comment procedures do not apply if
the agency for good cause finds them to be ``unnecessary,
impracticable, or contrary to the public interest.'' \8\ Section 553(d)
of the APA also provides that publication at least 30 days prior to a
rule's effective date is not required for (1) a substantive rule which
grants or recognizes an exemption or relieves a restriction; (2)
interpretive rules and statements of policy; or (3) a rule for which
the agency finds good cause for shortened notice and publishes its
reasoning with the rule.\9\
---------------------------------------------------------------------------
\7\ 5 U.S.C. 551 et seq.
\8\ 5 U.S.C. 553(b)(3)(A).
\9\ 5 U.S.C. 553(d).
---------------------------------------------------------------------------
The Board has determined that good cause exists for finding that
the notice, public comment, and delayed effective date provisions of
the APA are unnecessary, impracticable, or contrary to the public
interest with respect to these final amendments to Regulation D. The
rate changes for IORR and IOER that are reflected in the final
amendments to Regulation D were made with a view towards accommodating
commerce and business and with regard to their bearing upon the general
credit situation of the country.
Notice and public comment would prevent the Board's action from
being effective as promptly as necessary in the public interest and
would not otherwise serve any useful purpose. Notice, public comment,
and a delayed effective date would create uncertainty about the
finality and effectiveness of the Board's action and undermine the
effectiveness of that action.
Accordingly, the Board has determined that good cause exists to
dispense with the notice, public comment, and delayed effective date
procedures of the APA with respect to these final amendments to
Regulation D.
IV. Regulatory Flexibility Analysis
The Regulatory Flexibility Act (``RFA'') does not apply to a
rulemaking where a general notice of proposed rulemaking is not
required.\10\ As noted previously, the Board has determined that it is
unnecessary and contrary to the public interest to publish a general
notice of proposed rulemaking for this final rule. Accordingly, the
RFA's requirements relating to an initial and final regulatory
flexibility analysis do not apply.
---------------------------------------------------------------------------
\10\ 5 U.S.C. 603, 604.
---------------------------------------------------------------------------
V. Paperwork Reduction Act
In accordance with the Paperwork Reduction Act (``PRA'') of
1995,\11\ the Board reviewed the final rule under the authority
delegated to the Board by the Office of Management and Budget. The
final rule contains no requirements subject to the PRA.
---------------------------------------------------------------------------
\11\ 44 U.S.C. 3506; see 5 CFR part 1320, appendix A.1.
---------------------------------------------------------------------------
List of Subjects in 12 CFR Part 204
Banks, Banking, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Board amends 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. Section 204.10 is amended by revising paragraph (b)(5) to read as
follows:
Sec. 204.10 Payment of interest on balances.
* * * * *
(b) * * *
(5) The rates for IORR and IOER are:
Table 1 to Paragraph (b)(5)
------------------------------------------------------------------------
Rate
(percent)
------------------------------------------------------------------------
IORR........................................................ 1.80
IOER........................................................ 1.80
------------------------------------------------------------------------
* * * * *
By order of the Board of Governors of the Federal Reserve
System, September 25, 2019.
Ann Misback,
Secretary of the Board.
[FR Doc. 2019-21346 Filed 10-2-19; 8:45 am]
BILLING CODE 6210-01-P
