Regulation D: Reserve Requirements of Depository Institutions, 48442-48443 [2022-17019]
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Federal Register / Vol. 87, No. 152 / Tuesday, August 9, 2022 / Rules and Regulations
jspears on DSK121TN23PROD with RULES
approved the renewal of the secondary
credit rate formula, the primary credit
rate plus 50 basis points. Under the
formula, the secondary credit rate in
effect at each of the twelve Federal
Reserve Banks increased by 0.75
percentage points as a result of the
Board’s primary credit rate action,
thereby increasing from 2.25 percent to
3.00 percent the rate that each Reserve
Bank charges for extensions of
secondary credit. The amendments to
Regulation A reflect these rate changes.
The 0.75 percentage point increase in
the primary credit rate was associated
with a 0.75 percentage point increase in
the target range for the federal funds rate
(from a target range of 11⁄2 percent to 13⁄4
percent to a target range of 21⁄4 percent
to 21⁄2 percent) announced by the
Federal Open Market Committee on July
27, 2022, as described in the Board’s
amendment of its Regulation D
published elsewhere in today’s issue of
the Federal Register.
Administrative Procedure Act
In general, the Administrative
Procedure Act (‘‘APA’’) 1 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.’’ 2 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.3 The APA
further provides that the notice, public
comment, and delayed effective date
requirements of 5 U.S.C. 553 do not
apply ‘‘to the extent that there is
involved . . . a matter relating to agency
management or personnel or to public
property, loans, grants, benefits, or
contracts.’’ 4
Regulation A establishes the interest
rates that the twelve Reserve Banks
U.S.C. 551 et seq.
U.S.C. 553(b)(3)(A).
3 5 U.S.C. 553(d).
4 5 U.S.C. 553(a)(2) (emphasis added).
charge for extensions of primary credit
and secondary credit. The Board has
determined that the notice, public
comment, and delayed effective date
requirements of the APA do not apply
to these final amendments to Regulation
A. The amendments involve a matter
relating to loans and are therefore
exempt under the terms of the APA.
Furthermore, because delay would
undermine the Board’s action in
responding to economic data and
conditions, the Board has determined
that ‘‘good cause’’ exists within the
meaning of the APA to dispense with
the notice, public comment, and
delayed effective date procedures of the
APA with respect to the final
amendments to Regulation A.
Regulatory Flexibility Analysis
The Regulatory Flexibility Act
(‘‘RFA’’) does not apply to a rulemaking
where a general notice of proposed
rulemaking is not required.5 As noted
previously, a general notice of proposed
rulemaking is not required if the final
rule involves a matter relating to loans.
Furthermore, 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.
Paperwork Reduction Act
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.
List of Subjects in 12 CFR Part 201
Banks, Banking, Federal Reserve
System, Reporting and recordkeeping.
Authority and Issuance
For the reasons set forth in the
preamble, the Board is amending 12
CFR part 201 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, paragraphs (a) and (b)
are revised to read as follows:
■
15
25
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16:25 Aug 08, 2022
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55
U.S.C. 603, 604.
U.S.C. 3506; see 5 CFR part 1320 Appendix
6 44
A.1.
PO 00000
Frm 00012
Fmt 4700
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§ 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.
Margaret McCloskey Shanks,
Deputy Secretary of the Board.
[FR Doc. 2022–17018 Filed 8–8–22; 8:45 am]
BILLING CODE 6210–02–P
FEDERAL RESERVE SYSTEM
12 CFR Part 204
[Docket No. R–1777; RIN 7100–AG36]
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’’) has
adopted final amendments to its
Regulation D to revise the rate of
interest paid on balances (‘‘IORB’’)
maintained at Federal Reserve Banks by
or on behalf of eligible institutions. The
final amendments specify that IORB is
2.40 percent, a 0.75 percentage point
increase from its prior level. The
amendment is intended to enhance the
role of IORB 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
August 9, 2022.
Applicability date: The IORB rate
change was applicable on July 28, 2022.
FOR FURTHER INFORMATION CONTACT: M.
Benjamin Snodgrass, Senior Counsel
(202–263–4877), Legal Division, or Lyle
Kumasaka, Lead Financial Institution &
Policy Analyst (202–452–2382), or
Margaret DeBoer, Senior Associate
Director (202–452–3139), Division of
Monetary Affairs; for users of telephone
systems via text telephone (TTY) or any
SUMMARY:
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.
E:\FR\FM\09AUR1.SGM
09AUR1
Federal Register / Vol. 87, No. 152 / Tuesday, August 9, 2022 / Rules and Regulations
TTY-based Telecommunications Relay
Services (TRS), please call 711 from any
telephone, anywhere in the United
States; 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
established IORB at 1.65 percent.6
II. Amendment to IORB
The Board is amending § 204.10(b)(1)
of Regulation D to establish IORB at 2.40
percent. The amendment represents a
0.75 percentage point increase in IORB.
This decision was announced on July
27, 2022, with an effective date of July
28, 2022, in the Federal Reserve
Implementation Note that accompanied
the FOMC’s statement on July 27, 2022.
The FOMC statement stated that the
Committee decided to raise the target
range for the Federal funds rate to 21⁄4
to 21⁄2 percent.
The Federal Reserve Implementation
Note stated:
jspears on DSK121TN23PROD with RULES
The Board of Governors of the Federal
Reserve System voted unanimously to raise
the interest rate paid on reserve balances to
2.4 percent, effective July 28, 2022.
1 12 U.S.C. 461(b). In March 2020, the Board set
all reserve requirement ratios to zero percent. See
Interim Final Rule, 85 FR16525 (Mar. 24, 2020);
Final Rule, 86 FR 8853 (Feb. 10, 2021).
2 12 CFR 204.5(a)(1).
3 12 U.S.C. 461(b)(1)(A) and (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)(1).
VerDate Sep<11>2014
16:25 Aug 08, 2022
Jkt 256001
As a result, the Board is amending
§ 204.10(b)(1) of Regulation D to
establish IORB at 2.40 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)
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 change for IORB that is
reflected in the final amendment to
Regulation D was 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
this final amendment 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.
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.
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:
■
Authority: 12 U.S.C. 248(a), 248(c), 461,
601, 611, and 3105.
2. Section 204.10 is amended by
revising paragraph (b)(1) to read as
follows:
■
§ 204.10
*
*
*
*
(b) * * *
(1) For balances maintained in an
eligible institution’s master account,
interest is the amount equal to the
interest on reserve balances rate (‘‘IORB
rate’’) on a day multiplied by the total
balances maintained on that day. The
IORB rate is 2.40 percent.
*
*
*
*
*
By order of the Board of Governors of the
Federal Reserve System.
Margaret McCloskey Shanks,
Deputy Secretary of the Board.
[FR Doc. 2022–17019 Filed 8–8–22; 8:45 am]
BILLING CODE 6210–01–P
10 5
85
11 44
PO 00000
Frm 00013
Fmt 4700
Payment of interest on balances.
*
75
U.S.C. 551 et seq.
U.S.C. 553(b)(3)(A).
9 5 U.S.C. 553(d).
U.S.C. 603, 604.
U.S.C. 3506; see 5 CFR part 1320 Appendix
A.1.
Sfmt 9990
48443
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09AUR1
]]>Agencies
[Federal Register Volume 87, Number 152 (Tuesday, August 9, 2022)]
[Rules and Regulations]
[Pages 48442-48443]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-17019]
-----------------------------------------------------------------------
FEDERAL RESERVE SYSTEM
12 CFR Part 204
[Docket No. R-1777; RIN 7100-AG36]
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'') has adopted final amendments to its Regulation D to revise
the rate of interest paid on balances (``IORB'') maintained at Federal
Reserve Banks by or on behalf of eligible institutions. The final
amendments specify that IORB is 2.40 percent, a 0.75 percentage point
increase from its prior level. The amendment is intended to enhance the
role of IORB 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 August 9, 2022.
Applicability date: The IORB rate change was applicable on July 28,
2022.
FOR FURTHER INFORMATION CONTACT: M. Benjamin Snodgrass, Senior Counsel
(202-263-4877), Legal Division, or Lyle Kumasaka, Lead Financial
Institution & Policy Analyst (202-452-2382), or Margaret DeBoer, Senior
Associate Director (202-452-3139), Division of Monetary Affairs; for
users of telephone systems via text telephone (TTY) or any
[[Page 48443]]
TTY-based Telecommunications Relay Services (TRS), please call 711 from
any telephone, anywhere in the United States; 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 established IORB at 1.65 percent.\6\
---------------------------------------------------------------------------
\1\ 12 U.S.C. 461(b). In March 2020, the Board set all reserve
requirement ratios to zero percent. See Interim Final Rule, 85
FR16525 (Mar. 24, 2020); Final Rule, 86 FR 8853 (Feb. 10, 2021).
\2\ 12 CFR 204.5(a)(1).
\3\ 12 U.S.C. 461(b)(1)(A) and (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)(1).
---------------------------------------------------------------------------
II. Amendment to IORB
The Board is amending Sec. 204.10(b)(1) of Regulation D to
establish IORB at 2.40 percent. The amendment represents a 0.75
percentage point increase in IORB. This decision was announced on July
27, 2022, with an effective date of July 28, 2022, in the Federal
Reserve Implementation Note that accompanied the FOMC's statement on
July 27, 2022. The FOMC statement stated that the Committee decided to
raise the target range for the Federal funds rate to 2\1/4\ to 2\1/2\
percent.
The Federal Reserve Implementation Note stated:
The Board of Governors of the Federal Reserve System voted
unanimously to raise the interest rate paid on reserve balances to
2.4 percent, effective July 28, 2022.
As a result, the Board is amending Sec. 204.10(b)(1) of Regulation
D to establish IORB at 2.40 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) 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 change for IORB that is reflected in the final amendment to
Regulation D was 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 this final amendment 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)(1) to read as
follows:
Sec. 204.10 Payment of interest on balances.
* * * * *
(b) * * *
(1) For balances maintained in an eligible institution's master
account, interest is the amount equal to the interest on reserve
balances rate (``IORB rate'') on a day multiplied by the total balances
maintained on that day. The IORB rate is 2.40 percent.
* * * * *
By order of the Board of Governors of the Federal Reserve
System.
Margaret McCloskey Shanks,
Deputy Secretary of the Board.
[FR Doc. 2022-17019 Filed 8-8-22; 8:45 am]
BILLING CODE 6210-01-P
