Federal Reserve Bank Capital Stock, 68325-68326 [2019-27012]

Download as PDF 68325 Rules and Regulations Federal Register Vol. 84, No. 241 Monday, December 16, 2019 This section of the FEDERAL REGISTER contains regulatory documents having general applicability and legal effect, most of which are keyed to and codified in the Code of Federal Regulations, which is published under 50 titles pursuant to 44 U.S.C. 1510. The Code of Federal Regulations is sold by the Superintendent of Documents. FEDERAL RESERVE SYSTEM 12 CFR Part 209 [Regulation I; Docket No. R–1689] RIN 7100–AF 67 Federal Reserve Bank Capital Stock Board of Governors of the Federal Reserve System. ACTION: Final rule. AGENCY: The Board of Governors (Board) is publishing a final rule that applies an inflation adjustment to the threshold for total consolidated assets in Regulation I. Federal Reserve Bank (Reserve Bank) stockholders that have total consolidated assets above the threshold receive a different dividend rate on their Reserve Bank stock than stockholders with total consolidated assets at or below the threshold. The Federal Reserve Act requires that the Board annually adjust the total consolidated asset threshold to reflect the change in the Gross Domestic Product Price Index, published by the Bureau of Economic Analysis (BEA). Based on the change in the Gross Domestic Product Price Index as of September 26, 2019, the total consolidated asset threshold will be $10,715,000,000 through December 31, 2020. DATES: This final rule is effective January 15, 2020. FOR FURTHER INFORMATION CONTACT: Evan Winerman, Senior Counsel (202/ 872–7578), Legal Division; or Jamie Noonan, Lead Financial Institutions Policy Analyst (202/530–6296), Reserve Bank Operations and Payments Systems Division. For users of Telecommunications Device for the Deaf (TDD) only, contact (202) 263–4869. SUPPLEMENTARY INFORMATION: lotter on DSKBCFDHB2PROD with RULES SUMMARY: I. Background Regulation I governs the issuance and cancellation of capital stock by the Reserve Banks. Under section 5 of the VerDate Sep<11>2014 16:34 Dec 13, 2019 Jkt 250001 Federal Reserve Act 1 and Regulation I,2 a member bank must subscribe to capital stock of the Reserve Bank of its district in an amount equal to six percent of the member bank’s capital and surplus. The member bank must pay for one-half of this subscription on the date that the Reserve Bank approves its application for capital stock, while the remaining half of the subscription shall be subject to call by the Board.3 Section 7(a)(1) of the Federal Reserve Act 4 provides that Reserve Bank stockholders with $10 billion or less in total consolidated assets shall receive a six percent dividend on paid-in capital stock, while stockholders with more than $10 billion in total consolidated assets shall receive a dividend on paidin capital stock equal to the lesser of six percent and ‘‘the rate equal to the high yield of the 10-year Treasury note auctioned at the last auction held prior to the payment of such dividend.’’ Section 7(a)(1) requires that the Board adjust the threshold for total consolidated assets annually to reflect the change in the Gross Domestic Product Price Index, published by the BEA. Regulation I implements section 7(a)(1) of the Federal Reserve Act by (1) defining the term ‘‘total consolidated assets,’’ 5 (2) incorporating the statutory dividend rates for Reserve Bank stockholders 6 and (3) providing that the Board shall adjust the threshold for total consolidated assets annually to reflect the change in the Gross Domestic Product Price Index.7 The Board has explained that it ‘‘expects to make this adjustment [to the threshold for total consolidated assets] using the final second quarter estimate of the Gross Domestic Product Price Index for each 1 12 U.S.C. 287. CFR 209.4(a). 3 12 U.S.C. 287 and 12 CFR 209.4(c)(2). 4 12 U.S.C. 289(a)(1). 5 12 CFR 209.1(d)(3) (‘‘Total consolidated assets means the total assets on the stockholder’s balance sheet as reported by the stockholder on its Consolidated Report of Condition and Income (Call Report) as of the most recent December 31, except in the case of a new member or the surviving stockholder after a merger ‘total consolidated assets’ means (until the next December 31 Call Report becomes available) the total consolidated assets of the new member or the surviving stockholder at the time of its application for capital stock’’). 6 12 CFR 209.4(e), (c)(1)(ii), and (d)(1)(ii); 209.2(a); and 209.3(d)(3). 7 12 CFR 209.4(f). 2 12 PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 year, published by the Bureau of Economic Analysis.’’ 8 II. Adjustment The Board annually adjusts the $10 billion total consolidated asset threshold based on the change in the Gross Domestic Product Price Index between the second quarter of 2015 (the baseline year) and the second quarter of the current year.9 The second quarter 2019 Gross Domestic Product Price Index estimate published by the BEA in September 2019 (112.173) is 7.15 percent higher than the second quarter 2015 Gross Domestic Product Price Index estimate published by the BEA in September 2019 (104.684). Based on this change in the Gross Domestic Product Price Index, the threshold for total consolidated assets in Regulation I will be $10,715,000,000 as of January 15, 2020. III. Administrative Law Matters Administrative Procedure Act The provisions of 5 U.S.C. 553(b) relating to notice of proposed rulemaking have not been followed in connection with the adoption of these amendments. The amendments involve expected, ministerial adjustments that are required by statute and Regulation I and are consistent with a method previously set forth by the Board.10 Accordingly, the Board finds good cause for determining, and so determines, that notice in accordance with 5 U.S.C. 553(b) is unnecessary. Regulatory Flexibility Act The Regulatory Flexibility Act (RFA) does not apply to a rulemaking where a general notice of proposed rulemaking is not required.11 As noted previously, the Board has determined that it is unnecessary to publish a general notice of proposed rulemaking for this final rule. Accordingly, the RFA’s requirements relating to an initial and 8 81 FR 84415, 84417 (Nov. 23, 2016). BEA makes ongoing revisions to its estimates of the Gross Domestic Product Price Index for historical calendar quarters. The Board calculates annual adjustments from the baseline year (rather than from the prior-year total consolidated asset threshold) to ensure that the adjusted total consolidated asset threshold accurately reflects the cumulative change in the BEA’s most recent estimates of the Gross Domestic Product Price Index. 10 See 12 CFR 209.4(f) and n. 8 and accompanying text, supra. 11 5 U.S.C. 603 and 604. 9 The E:\FR\FM\16DER1.SGM 16DER1 68326 Federal Register / Vol. 84, No. 241 / Monday, December 16, 2019 / Rules and Regulations final regulatory flexibility analysis do not apply. Paperwork Reduction Act In accordance with the Paperwork Reduction Act of 1995,12 the Board has reviewed this final rule. No collections of information pursuant to the Paperwork Reduction Act are contained in the final rule. List of Subjects in 12 CFR Part 209 Banks and banking, Federal Reserve System, Reporting and recordkeeping requirements, Securities. Authority and Issuance For the reasons set forth in the preamble, the Board amends Regulation I, 12 CFR part 209, as follows: DATES: Effective on December 16, 2019. FOR FURTHER INFORMATION CONTACT: Jeremy R. Edelstein, Associate Director, Finance & Capital Market Team, Timothy T. Nerdahl, Senior Policy Analyst, Office of Regulatory Policy, Farm Credit Administration, 1501 Farm Credit Drive, McLean, VA 22102–5090, (703) 883–4414, TTY (703) 883–4056; or Richard A. Katz, Senior Counsel, Office of General Counsel, Farm Credit Administration, 1501 Farm Credit Drive, McLean, VA 22102–5090, (703) 883– 4020, TTY (703) 883–4056. In FR Doc. 2019–05012 appearing on page 9950 in the Federal Register on Tuesday, March 19, 2019, § 624.1 published with two paragraphs designated as (h)(2)(iv). The second instance of paragraph (h)(2)(iv) is being redesignated as paragraph (h)(2)(vi). SUPPLEMENTARY INFORMATION: PART 209—ISSUE AND CANCELLATION OF FEDERAL RESERVE BANK CAPITAL STOCK (REGULATION I) 1. The authority citation for part 209 continues to read as follows: ■ Authority: 12 U.S.C. 222, 248, 282, 286– 288, 289, 321, 323, 327–328, and 466. 2. In part 209, remove all references to ‘‘$10,518,000,000’’ and add in their place ‘‘$10,715,000,000’’, wherever they appear. ■ By order of the Board of Governors of the Federal Reserve System, acting through the Secretary of the Board under delegated authority, ecember 11, 2019. Ann Misback, Secretary of the Board. [FR Doc. 2019–27012 Filed 12–13–19; 8:45 am] List of Subjects in 12 CFR Part 624 Accounting, Agriculture, Banks, Banking, Capital, Cooperatives, Credit, Margin requirements, Reporting and recordkeeping requirements, Risk, Rural areas, Swaps. Accordingly, 12 CFR part 624 is corrected by making the following correcting amendment: BILLING CODE 6210–01–P PART 624—MARGIN AND CAPITAL REQUIREMENTS FOR COVERED SWAP ENTITIES FARM CREDIT ADMINISTRATION ■ 1. The authority citation for part 624 continues to read as follows: 12 CFR Part 624 Authority: 7 U.S.C. 6s(e), 15 U.S.C. 78o– 10(e), 12 U.S.C. 2154, 12 U.S.C. 2243, 12 U.S.C. 2252, and 12 U.S.C. 2279bb–1. [Docket No. 2019–05012] RIN 3052–AD34 § 624.1 Margin and Capital Requirements for Covered Swap Entities; Correction 2. Section 624.1 is amended by redesignating the second paragraph (h)(2)(iv) as paragraph (h)(2)(vi). The Farm Credit Administration (FCA or we) is correcting an interim final rule that published in the Federal Register on March 19, 2019, which we jointly issued with four other Agencies. The joint interim final rule amended the regulations governing Margin and Capital Requirements for Covered Swap Entities to address the status of certain SUMMARY: 12 44 [Amended] ■ Farm Credit Administration. ACTION: Correcting amendment. AGENCY: lotter on DSKBCFDHB2PROD with RULES non-cleared swaps and non-cleared security-based swaps if the United Kingdom withdraws from the European Union without a negotiated settlement. Dated: December 10, 2019. Dale Aultman, Secretary, Farm Credit Administration Board. [FR Doc. 2019–26884 Filed 12–13–19; 8:45 am] BILLING CODE 6705–01–P U.S.C. 3506; 5 CFR 1320. VerDate Sep<11>2014 17:29 Dec 13, 2019 Jkt 250001 PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA–2019–0326; Product Identifier 2018–NM–166–AD; Amendment 39–19808; AD 2019–23–14] RIN 2120–AA64 Airworthiness Directives; The Boeing Company Airplanes Federal Aviation Administration (FAA), DOT. ACTION: Final rule. AGENCY: The FAA is adopting a new airworthiness directive (AD) for all The Boeing Company Model 737–100, –200, –200C, –300, –400, and –500 series airplanes. This AD was prompted by significant changes made to the airworthiness limitations (AWLs) related to fuel tank ignition prevention and the nitrogen generation system. This AD requires revising the existing maintenance or inspection program, as applicable, to include new or revised AWLs. The FAA is issuing this AD to address the unsafe condition on these products. SUMMARY: This AD is effective January 21, 2020. The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of January 21, 2020. ADDRESSES: For service information identified in this final rule, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110–SK57, Seal Beach, CA 90740–5600; phone: 562–797–1717; internet: https:// www.myboeingfleet.com. You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206–231–3195. It is also available on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA–2019–0326. DATES: 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– 0326; 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, the regulatory evaluation, any comments received, and other information. The address for Docket E:\FR\FM\16DER1.SGM 16DER1

Agencies

[Federal Register Volume 84, Number 241 (Monday, December 16, 2019)]
[Rules and Regulations]
[Pages 68325-68326]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-27012]



========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 

========================================================================


Federal Register / Vol. 84, No. 241 / Monday, December 16, 2019 / 
Rules and Regulations

[[Page 68325]]



FEDERAL RESERVE SYSTEM

12 CFR Part 209

[Regulation I; Docket No. R-1689]
RIN 7100-AF 67


Federal Reserve Bank Capital Stock

AGENCY:  Board of Governors of the Federal Reserve System.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Board of Governors (Board) is publishing a final rule that 
applies an inflation adjustment to the threshold for total consolidated 
assets in Regulation I. Federal Reserve Bank (Reserve Bank) 
stockholders that have total consolidated assets above the threshold 
receive a different dividend rate on their Reserve Bank stock than 
stockholders with total consolidated assets at or below the threshold. 
The Federal Reserve Act requires that the Board annually adjust the 
total consolidated asset threshold to reflect the change in the Gross 
Domestic Product Price Index, published by the Bureau of Economic 
Analysis (BEA). Based on the change in the Gross Domestic Product Price 
Index as of September 26, 2019, the total consolidated asset threshold 
will be $10,715,000,000 through December 31, 2020.

DATES: This final rule is effective January 15, 2020.

FOR FURTHER INFORMATION CONTACT: Evan Winerman, Senior Counsel (202/
872-7578), Legal Division; or Jamie Noonan, Lead Financial Institutions 
Policy Analyst (202/530-6296), Reserve Bank Operations and Payments 
Systems Division. For users of Telecommunications Device for the Deaf 
(TDD) only, contact (202) 263-4869.

SUPPLEMENTARY INFORMATION: 

I. Background

    Regulation I governs the issuance and cancellation of capital stock 
by the Reserve Banks. Under section 5 of the Federal Reserve Act \1\ 
and Regulation I,\2\ a member bank must subscribe to capital stock of 
the Reserve Bank of its district in an amount equal to six percent of 
the member bank's capital and surplus. The member bank must pay for 
one-half of this subscription on the date that the Reserve Bank 
approves its application for capital stock, while the remaining half of 
the subscription shall be subject to call by the Board.\3\
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    \1\ 12 U.S.C. 287.
    \2\ 12 CFR 209.4(a).
    \3\ 12 U.S.C. 287 and 12 CFR 209.4(c)(2).
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    Section 7(a)(1) of the Federal Reserve Act \4\ provides that 
Reserve Bank stockholders with $10 billion or less in total 
consolidated assets shall receive a six percent dividend on paid-in 
capital stock, while stockholders with more than $10 billion in total 
consolidated assets shall receive a dividend on paid-in capital stock 
equal to the lesser of six percent and ``the rate equal to the high 
yield of the 10-year Treasury note auctioned at the last auction held 
prior to the payment of such dividend.'' Section 7(a)(1) requires that 
the Board adjust the threshold for total consolidated assets annually 
to reflect the change in the Gross Domestic Product Price Index, 
published by the BEA.
---------------------------------------------------------------------------

    \4\ 12 U.S.C. 289(a)(1).
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    Regulation I implements section 7(a)(1) of the Federal Reserve Act 
by (1) defining the term ``total consolidated assets,'' \5\ (2) 
incorporating the statutory dividend rates for Reserve Bank 
stockholders \6\ and (3) providing that the Board shall adjust the 
threshold for total consolidated assets annually to reflect the change 
in the Gross Domestic Product Price Index.\7\ The Board has explained 
that it ``expects to make this adjustment [to the threshold for total 
consolidated assets] using the final second quarter estimate of the 
Gross Domestic Product Price Index for each year, published by the 
Bureau of Economic Analysis.'' \8\
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    \5\ 12 CFR 209.1(d)(3) (``Total consolidated assets means the 
total assets on the stockholder's balance sheet as reported by the 
stockholder on its Consolidated Report of Condition and Income (Call 
Report) as of the most recent December 31, except in the case of a 
new member or the surviving stockholder after a merger `total 
consolidated assets' means (until the next December 31 Call Report 
becomes available) the total consolidated assets of the new member 
or the surviving stockholder at the time of its application for 
capital stock'').
    \6\ 12 CFR 209.4(e), (c)(1)(ii), and (d)(1)(ii); 209.2(a); and 
209.3(d)(3).
    \7\ 12 CFR 209.4(f).
    \8\ 81 FR 84415, 84417 (Nov. 23, 2016).
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II. Adjustment

    The Board annually adjusts the $10 billion total consolidated asset 
threshold based on the change in the Gross Domestic Product Price Index 
between the second quarter of 2015 (the baseline year) and the second 
quarter of the current year.\9\ The second quarter 2019 Gross Domestic 
Product Price Index estimate published by the BEA in September 2019 
(112.173) is 7.15 percent higher than the second quarter 2015 Gross 
Domestic Product Price Index estimate published by the BEA in September 
2019 (104.684). Based on this change in the Gross Domestic Product 
Price Index, the threshold for total consolidated assets in Regulation 
I will be $10,715,000,000 as of January 15, 2020.
---------------------------------------------------------------------------

    \9\ The BEA makes ongoing revisions to its estimates of the 
Gross Domestic Product Price Index for historical calendar quarters. 
The Board calculates annual adjustments from the baseline year 
(rather than from the prior-year total consolidated asset threshold) 
to ensure that the adjusted total consolidated asset threshold 
accurately reflects the cumulative change in the BEA's most recent 
estimates of the Gross Domestic Product Price Index.
---------------------------------------------------------------------------

III. Administrative Law Matters

Administrative Procedure Act

    The provisions of 5 U.S.C. 553(b) relating to notice of proposed 
rulemaking have not been followed in connection with the adoption of 
these amendments. The amendments involve expected, ministerial 
adjustments that are required by statute and Regulation I and are 
consistent with a method previously set forth by the Board.\10\ 
Accordingly, the Board finds good cause for determining, and so 
determines, that notice in accordance with 5 U.S.C. 553(b) is 
unnecessary.
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    \10\ See 12 CFR 209.4(f) and n. 8 and accompanying text, supra.
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Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) does not apply to a rulemaking 
where a general notice of proposed rulemaking is not required.\11\ As 
noted previously, the Board has determined that it is unnecessary to 
publish a general notice of proposed rulemaking for this final rule. 
Accordingly, the RFA's requirements relating to an initial and

[[Page 68326]]

final regulatory flexibility analysis do not apply.
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    \11\ 5 U.S.C. 603 and 604.
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Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995,\12\ the 
Board has reviewed this final rule. No collections of information 
pursuant to the Paperwork Reduction Act are contained in the final 
rule.
---------------------------------------------------------------------------

    \12\ 44 U.S.C. 3506; 5 CFR 1320.
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List of Subjects in 12 CFR Part 209

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

Authority and Issuance

    For the reasons set forth in the preamble, the Board amends 
Regulation I, 12 CFR part 209, as follows:

PART 209--ISSUE AND CANCELLATION OF FEDERAL RESERVE BANK CAPITAL 
STOCK (REGULATION I)

0
1. The authority citation for part 209 continues to read as follows:

    Authority: 12 U.S.C. 222, 248, 282, 286-288, 289, 321, 323, 327-
328, and 466.


0
2. In part 209, remove all references to ``$10,518,000,000'' and add in 
their place ``$10,715,000,000'', wherever they appear.

    By order of the Board of Governors of the Federal Reserve 
System, acting through the Secretary of the Board under delegated 
authority, ecember 11, 2019.
Ann Misback,
Secretary of the Board.
[FR Doc. 2019-27012 Filed 12-13-19; 8:45 am]
 BILLING CODE 6210-01-P