Regulation D: Reserve Requirements of Depository Institutions, 13724-13725 [2020-04826]
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Federal Register / Vol. 85, No. 47 / Tuesday, March 10, 2020 / Rules and Regulations
Paperwork Reduction Act
FEDERAL RESERVE SYSTEM
In accordance with the Paperwork
Reduction Act (‘‘PRA’’) of 1995,6 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.
12 CFR Part 204
Banks, Banking, Federal Reserve
System, Reporting and recordkeeping.
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 1.10 percent and
IOER is 1.10 percent, a 0.50 percentage
point decrease from their prior levels.
The amendments are intended to
enhance the role of such rates of interest
in maintaining the Federal funds rate in
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
March 10, 2020.
Applicability date: The IORR and
IOER rate changes were applicable on
March 4, 2020.
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:
SUMMARY:
Authority and Issuance
For the reasons set forth in the
preamble, the Board is amending 12
CFR chapter II to read 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), 343 et seq.,
347a, 347b, 347c, 348 et seq., 357, 374, 374a,
and 461.
2. In § 201.51, revise paragraphs (a)
and (b) 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 1.75
percent.
(b) Secondary credit. The interest rate
at each Federal Reserve Bank for
secondary credit provided to depository
institutions under § 201.4(b) is 2.25
percent.
*
*
*
*
*
By order of the Board of Governors of the
Federal Reserve System, March 4, 2020.
Michele Taylor Fennell,
Assistant Secretary of the Board.
[FR Doc. 2020–04825 Filed 3–9–20; 8:45 am]
BILLING CODE 6210–01–P
khammond on DSKJM1Z7X2PROD with RULES
Regulation D: Reserve Requirements
of Depository Institutions
Board of Governors of the
Federal Reserve System.
ACTION: Final rule.
List of Subjects in 12 CFR Part 201
I. Statutory and Regulatory Background
6 44 U.S.C. 3506; see 5 CFR part 1320 Appendix
A.1.
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.
16:53 Mar 09, 2020
RIN 7100–AF73
AGENCY:
12 CFR Chapter II
VerDate Sep<11>2014
[Docket No. R–1698]
Jkt 250001
For monetary policy purposes, section
19 of the Federal Reserve Act (‘‘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
1 12
PO 00000
U.S.C. 461(b).
Frm 00002
Fmt 4700
Sfmt 4700
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 1.60 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
1.10 percent and IOER is 1.10 percent.
This 0.50 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 11⁄2 to 13⁄4
percent to a target range of 1 to 11⁄4
percent, announced by the FOMC on
March 3, 2020 with an effective date of
March 4, 2020. The FOMC’s press
release on the same day as the
announcement noted that:
The fundamentals of the U.S. economy
remain strong. However, the coronavirus
poses evolving risks to economic activity. In
light of these risks and in support of
achieving its maximum employment and
price stability goals, the Federal Open Market
Committee decided today to lower the target
range for the federal funds rate by 1⁄2
percentage point, to 1 to 11⁄4 percent. The
Committee is closely monitoring
developments and their implications for the
economic outlook and will use its tools and
act as appropriate to support the economy.
The Federal Reserve Implementation
Note released simultaneously with the
announcement stated:
The Board of Governors of the Federal
Reserve System voted unanimously to
set the interest rate paid on required and
excess reserve balances at 1.10 percent,
effective March 4, 2020.
As a result, the Board is amending
§ 204.10(b)(5) of Regulation D to change
IORR to 1.10 percent and IOER to 1.10
percent.
2 12
CFR 204.5(a)(1).
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).
3 12
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Federal Register / Vol. 85, No. 47 / Tuesday, March 10, 2020 / Rules and Regulations
khammond on DSKJM1Z7X2PROD with RULES
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)
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
75
U.S.C. 551 et seq.
U.S.C. 553(b)(3)(A).
9 5 U.S.C. 553(d).
10 5 U.S.C. 603, 604.
85
VerDate Sep<11>2014
18:24 Mar 09, 2020
Jkt 250001
13725
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.
SMALL BUSINESS ADMINISTRATION
V. Paperwork Reduction Act
AGENCY:
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.
List of Subjects in 12 CFR Part 204
Banks, Banking, Reporting and
recordkeeping requirements.
Authority and Issuance
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)
1. The authority citation for part 204
continues to read as follows:
■
13 CFR Parts 107, 120, 142, and 146
RIN 3245–AH24
Civil Monetary Penalties Inflation
Adjustments
U.S. Small Business
Administration.
ACTION: Final rule.
The Small Business
Administration (SBA) is amending its
regulations to adjust for inflation the
amount of certain civil monetary
penalties that are within the jurisdiction
of the agency. These adjustments
comply with the requirement in the
Federal Civil Penalties Inflation
Adjustment Act of 1990, as amended by
the Federal Civil Penalties Inflation
Adjustment Act Improvements Act of
2015, to make annual adjustments to the
penalties.
DATES: This rule is effective March 10,
2020.
FOR FURTHER INFORMATION CONTACT:
Arlene Embrey, 202–205–6976, or at
arlene.embrey@sba.gov.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Background
On November 2, 2015, the Federal
Civil Penalties Inflation Adjustment Act
Improvements Act of 2015 (the Act),
Public Law 114–74, 129 Stat. 584, was
■ 2. Section 204.10 is amended by
enacted. The Act amended the Federal
revising paragraph (b)(5) to read as
Civil Penalties Inflation Adjustment Act
follows:
of 1990, Public Law 101–410, 104 Stat
890 (the 1990 Inflation Adjustment Act),
§ 204.10 Payment of interest on balances.
to improve the effectiveness of civil
*
*
*
*
*
monetary penalties and to maintain
(b) * * *
their deterrent effect. The Act required
agencies to issue a final rule by August
(5) The rates for IORR and IOER are:
1, 2016, to adjust the level of civil
monetary penalties with an initial
TABLE 1 TO PARAGRAPH (b)(5)
‘‘catch-up’’ adjustment and to annually
adjust these monetary penalties for
Rate
inflation by January 15 of each
(percent)
subsequent year. The Act authorizes
IORR ...........................................
1.10 agencies to implement the annual
IOER ...........................................
1.10 adjustments without regard to the
requirements for public notice and
comment or delayed effective date
By order of the Board of Governors of the
under the Administrative Procedure Act
Federal Reserve System, March 4, 2020.
(APA), 5 U.S.C. 553(b)(3)(B) and (d)(3),
Michele Taylor Fennell,
respectively.
Assistant Secretary of the Board.
In addition, based on the definition of
[FR Doc. 2020–04826 Filed 3–9–20; 8:45 am]
a ‘‘civil monetary penalty’’ in the 1990
BILLING CODE 6210–01–P
Inflation Adjustment Act, agencies are
to make adjustments only to the civil
penalties that (i) are for a specific
monetary amount as provided by
Federal law or have a maximum amount
provided for by Federal law; (ii) are
11 44 U.S.C. 3506; see 5 CFR part 1320 Appendix
assessed or enforced by an agency; and
A.1.
(iii) are enforced or assessed in an
Authority: 12 U.S.C. 248(a), 248(c), 461,
601, 611, and 3105.
PO 00000
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]]>Agencies
[Federal Register Volume 85, Number 47 (Tuesday, March 10, 2020)]
[Rules and Regulations]
[Pages 13724-13725]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-04826]
-----------------------------------------------------------------------
FEDERAL RESERVE SYSTEM
12 CFR Part 204
[Docket No. R-1698]
RIN 7100-AF73
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 1.10 percent and IOER is 1.10
percent, a 0.50 percentage point decrease from their prior levels. The
amendments are intended to enhance the role of such rates of interest
in maintaining the Federal funds rate in 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 March 10, 2020.
Applicability date: The IORR and IOER rate changes were applicable
on March 4, 2020.
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
(``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 1.60 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 1.10 percent and IOER is 1.10 percent. This 0.50
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
1\1/2\ to 1\3/4\ percent to a target range of 1 to 1\1/4\ percent,
announced by the FOMC on March 3, 2020 with an effective date of March
4, 2020. The FOMC's press release on the same day as the announcement
noted that:
The fundamentals of the U.S. economy remain strong. However, the
coronavirus poses evolving risks to economic activity. In light of
these risks and in support of achieving its maximum employment and
price stability goals, the Federal Open Market Committee decided
today to lower the target range for the federal funds rate by \1/2\
percentage point, to 1 to 1\1/4\ percent. The Committee is closely
monitoring developments and their implications for the economic
outlook and will use its tools and act as appropriate to support the
economy.
The Federal Reserve Implementation Note released simultaneously
with the announcement stated:
The Board of Governors of the Federal Reserve System voted
unanimously to set the interest rate paid on required and excess
reserve balances at 1.10 percent, effective March 4, 2020.
As a result, the Board is amending Sec. 204.10(b)(5) of Regulation
D to change IORR to 1.10 percent and IOER to 1.10 percent.
[[Page 13725]]
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) 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.
Authority and Issuance
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........................................................ 1.10
IOER........................................................ 1.10
------------------------------------------------------------------------
By order of the Board of Governors of the Federal Reserve
System, March 4, 2020.
Michele Taylor Fennell,
Assistant Secretary of the Board.
[FR Doc. 2020-04826 Filed 3-9-20; 8:45 am]
BILLING CODE 6210-01-P
