Federal Reserve Bank Capital Stock, 73634-73635 [2022-26066]

Download as PDF 73634 Federal Register / Vol. 87, No. 230 / Thursday, December 1, 2022 / Rules and Regulations the Board shall issue a regulation adjusting the low reserve tranche for the next calendar year. The Act requires the adjustment in the low reserve tranche to be 80 percent of the percentage increase or decrease in total transaction accounts of all depository institutions over the one-year period that ends on the June 30 prior to the adjustment. Net transaction accounts of all depository institutions increased 10.0 percent, from $15,813 billion to $17,390 billion, between June 30, 2021, and June 30, 2022.3 Accordingly, the Board is amending Regulation D to set the low reserve tranche for net transaction accounts for 2023 at $691.7 million, an increase of $51.1 million from 2022. The new reserve requirement exemption amount and low reserve tranche will be effective for all depository institutions beginning January 1, 2023. Effective March 26, 2020, the Board reduced reserve requirement ratios on all net transaction accounts to zero percent, eliminating reserve requirements for all depository institutions. The annual indexation of the reserve requirement exemption amount and the low reserve tranche for 2023 is required by statute but will not affect depository institutions’ reserve requirements, which will remain zero. of information pursuant to the Paperwork Reduction Act are contained in the final rule. II. Regulatory Analysis 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 prescribed by statute and by the Board’s policy concerning reporting practices. The adjustments in the reserve requirement exemption amount and the low reserve tranche serve to reduce regulatory burdens on depository institutions. 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.4 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 final regulatory flexibility analysis do not apply. Paperwork Reduction Act In accordance with the Paperwork Reduction Act of 1995,5 the Board reviewed this final rule. No collections 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 is amending 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 204.4 is amended by revising paragraph (f) to read as follows: ■ § 204.4 Computation of required reserves. * * * * * (f) For all depository institutions, Edge and Agreement corporations, and United States branches and agencies of foreign banks, required reserves are computed by applying the reserve requirement ratios in table 1 to this paragraph (f) to net transaction accounts, nonpersonal time deposits, and Eurocurrency liabilities of the institution during the computation period. TABLE 1 TO PARAGRAPH (f) Reservable liability Reserve requirement Net Transaction Accounts: $0 to reserve requirement exemption amount ($36.1 million) ................................................... Over reserve requirement exemption amount ($36.1 million) and up to low reserve tranche ($691.7 million). Over low reserve tranche ($691.7 million) ................................................................................. Nonpersonal time deposits ......................................................................................................... Eurocurrency liabilities ................................................................................................................ By order of the Board of Governors of the Federal Reserve System, acting through the Director of the Division of Monetary Affairs under delegated authority. Ann E. Misback, Secretary of the Board. [FR Doc. 2022–26065 Filed 11–30–22; 8:45 am] BILLING CODE 6210–01–P FEDERAL RESERVE SYSTEM 12 CFR Part 209 [Regulation I; Docket No. R–1792] RIN 7100–AG 48 Federal Reserve Bank Capital Stock Board of Governors of the Federal Reserve System. ACTION: Final rule. khammond on DSKJM1Z7X2PROD with RULES AGENCY: The Board of Governors (Board) is publishing a final rule that applies an inflation adjustment to the SUMMARY: 3 The June 30th value for 2021 may differ from the value used in the previous year’s calculation VerDate Sep<11>2014 15:55 Nov 30, 2022 Jkt 259001 because depository institutions may revise their deposit data to correct for inaccuracies. PO 00000 Frm 00012 Fmt 4700 Sfmt 4700 0 percent of amount. 0 percent of amount. $0 plus 0 percent of amount over $691.7 million. 0 percent. 0 percent. 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 45 U.S.C. 603 and 604. U.S.C. 3506; 5 CFR part 1320. 5 44 E:\FR\FM\01DER1.SGM 01DER1 Federal Register / Vol. 87, No. 230 / Thursday, December 1, 2022 / Rules and Regulations khammond on DSKJM1Z7X2PROD with RULES Domestic Product Price Index as of September 29, 2022, the total consolidated asset threshold will be $12,124,000,000 through December 31, 2023. DATES: Effective date: January 3, 2023. Applicability date: The adjusted threshold for total consolidated assets will apply beginning January 1, 2023. FOR FURTHER INFORMATION CONTACT: Benjamin Snodgrass, Senior Counsel (202–263–4877), Legal Division; or Rebecca Rider, Senior Financial Institutions Policy Analyst (202–736– 1926), Reserve Bank Operations and Payments Systems Division. Board of Governors of the Federal Reserve System, 20th and C Streets NW, Washington, DC 20551. For the hearing impaired and users of TTY–TRS, please call 711 from any telephone, anywhere in the United States. 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 when the Reserve Bank issues the 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 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). 2 12 VerDate Sep<11>2014 15:55 Nov 30, 2022 Jkt 259001 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 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 2022 Gross Domestic Product Price Index estimate published by the BEA in September 2022 (126.914) is 21.24 percent higher than the second quarter 2015 Gross Domestic Product Price Index estimate published by the BEA in September 2022 (104.683). Based on this change in the Gross Domestic Product Price Index, the threshold for total consolidated assets in Regulation I will be $12,124,000,000 as of January 3, 2023. 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 6 12 CFR 209.4(e), (c)(1)(ii), and (d)(1)(ii); 209.2(a); and 209.3(d)(5). 7 12 CFR 209.4(f). 8 81 FR 84415, 84417 (Nov. 23, 2016). 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. 10 See 12 CFR 209.4(f) and n. 8 and accompanying text, supra. PO 00000 Frm 00013 Fmt 4700 Sfmt 4700 73635 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 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: PART 209—FEDERAL RESERVE BANK CAPITAL STOCK (REGULATION I) 1. The authority citation for part 209 continues to read as follows: ■ Authority: 12 U.S.C. 12 U.S.C. 222, 248, 282, 286–288, 289, 321, 323, 327–328, and 466. 2. In part 209, remove all references to ‘‘$11,229,000,000’’ and add in their place ‘‘$12,124,000,000’’ 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. Ann E. Misback, Secretary of the Board. [FR Doc. 2022–26066 Filed 11–30–22; 8:45 am] BILLING CODE P DEPARTMENT OF THE TREASURY Office of Foreign Assets Control 31 CFR Part 587 Publication of Russian Harmful Foreign Activities Sanctions Regulations Web General License 28A Office of Foreign Assets Control, Treasury. ACTION: Publication of a Web General License. AGENCY: The Department of the Treasury’s Office of Foreign Assets SUMMARY: 11 5 U.S.C. 603 and 604. U.S.C. 3506; 5 CFR part 1320. 12 44 E:\FR\FM\01DER1.SGM 01DER1

Agencies

FEDERAL RESERVE SYSTEM

[Federal Register Volume 87, Number 230 (Thursday, December 1, 2022)]
[Rules and Regulations]
[Pages 73634-73635]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-26066]


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

FEDERAL RESERVE SYSTEM

12 CFR Part 209

[Regulation I; Docket No. R-1792]
RIN 7100-AG 48


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

[[Page 73635]]

Domestic Product Price Index as of September 29, 2022, the total 
consolidated asset threshold will be $12,124,000,000 through December 
31, 2023.

DATES: 
    Effective date: January 3, 2023.
    Applicability date: The adjusted threshold for total consolidated 
assets will apply beginning January 1, 2023.

FOR FURTHER INFORMATION CONTACT: Benjamin Snodgrass, Senior Counsel 
(202-263-4877), Legal Division; or Rebecca Rider, Senior Financial 
Institutions Policy Analyst (202-736-1926), Reserve Bank Operations and 
Payments Systems Division. Board of Governors of the Federal Reserve 
System, 20th and C Streets NW, Washington, DC 20551. For the hearing 
impaired and users of TTY-TRS, please call 711 from any telephone, 
anywhere in the United States.

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 when the Reserve Bank issues the capital 
stock, while the remaining half of the subscription shall be subject to 
call by the Board.\3\
---------------------------------------------------------------------------

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

    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).
---------------------------------------------------------------------------

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

    \5\ 12 CFR 209.1(d)(3).
    \6\ 12 CFR 209.4(e), (c)(1)(ii), and (d)(1)(ii); 209.2(a); and 
209.3(d)(5).
    \7\ 12 CFR 209.4(f).
    \8\ 81 FR 84415, 84417 (Nov. 23, 2016).
---------------------------------------------------------------------------

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 2022 Gross Domestic 
Product Price Index estimate published by the BEA in September 2022 
(126.914) is 21.24 percent higher than the second quarter 2015 Gross 
Domestic Product Price Index estimate published by the BEA in September 
2022 (104.683). Based on this change in the Gross Domestic Product 
Price Index, the threshold for total consolidated assets in Regulation 
I will be $12,124,000,000 as of January 3, 2023.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    \10\ See 12 CFR 209.4(f) and n. 8 and accompanying text, supra.
---------------------------------------------------------------------------

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 final 
regulatory flexibility analysis do not apply.
---------------------------------------------------------------------------

    \11\ 5 U.S.C. 603 and 604.
---------------------------------------------------------------------------

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 part 1320.
---------------------------------------------------------------------------

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--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. 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 ``$11,229,000,000'' and add in 
their place ``$12,124,000,000'' 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.
Ann E. Misback,
Secretary of the Board.
[FR Doc. 2022-26066 Filed 11-30-22; 8:45 am]
BILLING CODE P

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