Reserve Requirements of Depository Institutions, 83316-83317 [2023-26212]
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Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Rules and Regulations
applies. See § 1026.35(c)(2) and
(c)(4)(vii).
*
*
*
*
*
Michael J. Hsu,
Acting Comptroller of the Currency.
By order of the Board of Governors of the
Federal Reserve System, acting through the
Secretary of the Board under delegated
authority.
Michele Taylor Fennell,
Deputy Associate Secretary of the Board.
Brian Shearer,
Senior Advisor, Consumer Financial
Protection Bureau.
[FR Doc. 2023–25047 Filed 11–28–23; 8:45 am]
BILLING CODE 4810–33–P; 6210–01–P; 4810–AM–P
I. Reserve Requirements
FEDERAL RESERVE SYSTEM
12 CFR Part 204
[Regulation D; Docket No. R–1823]
RIN 7100–AG71
Reserve Requirements of Depository
Institutions
Board of Governors of the
Federal Reserve System.
ACTION: Final rule.
AGENCY:
The Board is amending
Regulation D, Reserve Requirements of
Depository Institutions, to reflect the
annual indexing of the reserve
requirement exemption amount and the
low reserve tranche for 2024. The
annual indexation of these amounts is
required notwithstanding the Board’s
action in March 2020 of setting all
reserve requirement ratios to zero. The
reserve requirement exemption amount
for 2023 will remain $36.1 million,
unchanged for 2024, consistent with the
Federal Reserve Act (the ‘‘Act’’). The
Board is amending Regulation D to set
the amount of the low reserve tranche
at $644.0 million (decreased from
$691.7 million in 2023). The adjustment
to the low reserve tranche is derived
using a statutory formula specified in
the Act. The annual indexation of the
reserve requirement exemption amount
and low reserve tranche is required by
statute but will not affect depository
institutions’ reserve requirements,
which will remain zero.
DATES:
Effective date: December 29, 2023.
Compliance date: The new low
reserve tranche will apply beginning
January 1, 2024.
FOR FURTHER INFORMATION CONTACT:
Benjamin Snodgrass, Senior Counsel
(202/263–4877), Legal Division; Kristen
Payne, Lead Financial Institution and
ddrumheller on DSK120RN23PROD with RULES1
SUMMARY:
VerDate Sep<11>2014
16:24 Nov 28, 2023
Jkt 262001
Policy Analyst (202/452–2872), Division
of Monetary Affairs; for users of TTY/
TRS, please call 711 from any
telephone, anywhere in the United
States, or (202) 263–4869; Board of
Governors of the Federal Reserve
System, 20th and C Streets NW,
Washington, DC 20551.
SUPPLEMENTARY INFORMATION: Section
19(b)(2) of the Act (12 U.S.C. 461(b)(2))
requires each depository institution to
maintain reserves against its transaction
accounts and nonpersonal time
deposits, as prescribed by Board
regulations, for the purpose of
implementing monetary policy. The
Board’s actions with respect to this
provision are discussed below.
Section 19(b) of the Act authorizes
different ranges of reserve requirement
ratios depending on the amount of
transaction account balances at a
depository institution. Section
19(b)(11)(A) of the Act (12 U.S.C.
461(b)(11)(A)) provides that a zero
percent reserve requirement ratio shall
apply at each depository institution to
total reservable liabilities that do not
exceed a certain amount, known as the
reserve requirement exemption amount.
Section 19(b)(11)(B) provides that,
before December 31 of each year, the
Board shall issue a regulation adjusting
the reserve requirement exemption
amount for the next calendar year if
total reservable liabilities held at all
depository institutions increase from
one year to the next. The Act requires
the percentage increase in the reserve
requirement exemption amount to be 80
percent of the percentage increase in
total reservable liabilities of all
depository institutions over the one-year
period that ends on the June 30 prior to
the adjustment. No adjustment is made
to the reserve requirement exemption
amount if total reservable liabilities held
at all depository institutions should
decrease during the applicable time
period.
Total reservable liabilities of all
depository institutions decreased by 8.6
percent, from $20,841 billion to $19,057
billion, between June 30, 2022, and June
30, 2023.1 Accordingly, the reserve
requirement exemption amount for 2024
will remain at $36.1 million, unchanged
from its level in 2023.2
1 The June 30th value for 2022 may differ from
the value used in the previous year’s calculation
because depository institutions may revise their
deposit data to correct for inaccuracies.
2 Consistent with Board practice, the low reserve
tranche and reserve requirement exemption
amounts have been rounded to the nearest $0.1
million.
PO 00000
Frm 00012
Fmt 4700
Sfmt 4700
Pursuant to Section 19(b)(2) of the Act
(12 U.S.C. 461(b)(2)), transaction
account balances maintained at each
depository institution over the reserve
requirement exemption amount and up
to a certain amount, known as the low
reserve tranche, may be subject to a
reserve requirement ratio of not more
than 3 percent (and which may be zero).
Transaction account balances over the
low reserve tranche may be subject to a
reserve requirement ratio of not more
than 14 percent (and which may be
zero). Section 19(b)(2) also provides
that, before December 31 of each year,
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 decreased 8.6
percent, from $17,549 billion to $16,037
billion, between June 30, 2022, and June
30, 2023.3 Accordingly, the Board is
amending Regulation D to set the low
reserve tranche for net transaction
accounts for 2024 at $644.0 million, a
decrease of $47.7 million from 2023.
The new low reserve tranche will be
effective for all depository institutions
beginning January 1, 2024.
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
2024 is required by statute but will not
affect depository institutions’ reserve
requirements, which will remain zero.
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
3 The June 30th value for 2022 may differ from
the value used in the previous year’s calculation
because depository institutions may revise their
deposit data to correct for inaccuracies.
E:\FR\FM\29NOR1.SGM
29NOR1
Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Rules and Regulations
determines, that notice in accordance
with 5 U.S.C. 553(b) is unnecessary.
reviewed this final rule. No collections
of information pursuant to the
Paperwork Reduction Act are contained
in the final rule.
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
List of Subjects in 12 CFR Part 204
Banks, Banking, Reporting and
recordkeeping requirements.
83317
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.
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:
■
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 ($644.0 million).
Over low reserve tranche ($644.0 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. 2023–26212 Filed 11–28–23; 8:45 am]
BILLING CODE 6210–01–P
FEDERAL RESERVE SYSTEM
12 CFR Part 209
[Regulation I; Docket No. R–1824]
RIN 7100–AG72
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
ddrumheller on DSK120RN23PROD with RULES1
SUMMARY:
45
U.S.C. 603 and 604.
U.S.C. 3506; 5 CFR part 1320.
VerDate Sep<11>2014
16:24 Nov 28, 2023
I. Background
Regulation I governs the issuance and
cancellation of capital stock by the
Reserve Banks. Under section 5 of the
2 12
Jkt 262001
$0 plus 0 percent of amount over $644.0 million.
0 percent.
0 percent.
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 28, 2023, the total
consolidated asset threshold will be
$12,517,000,000 through December 31,
2024.
DATES:
Effective date: December 29, 2023.
Applicability date: The adjusted
threshold for total consolidated assets
will apply beginning on January 1, 2024.
FOR FURTHER INFORMATION CONTACT:
Benjamin Snodgrass, Senior Counsel
(202/263–4877), Legal Division; or
Kelsey Cassidy, Financial Institutions
Policy Analyst (202/465–6817), Reserve
Bank Operations and Payments Systems
Division. For users of TTY–TRS, please
contact 711 from any telephone,
anywhere in the United States or (202)
263–4869.
SUPPLEMENTARY INFORMATION:
1 12
5 44
0 percent of amount.
PO 00000
U.S.C. 287.
CFR 209.4(a).
Frm 00013
Fmt 4700
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
3 12
4 12
Sfmt 4700
U.S.C. 287 and 12 CFR 209.4(c)(2).
U.S.C. 289(a)(1).
E:\FR\FM\29NOR1.SGM
29NOR1
]]>Agencies
[Federal Register Volume 88, Number 228 (Wednesday, November 29, 2023)]
[Rules and Regulations]
[Pages 83316-83317]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-26212]
=======================================================================
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FEDERAL RESERVE SYSTEM
12 CFR Part 204
[Regulation D; Docket No. R-1823]
RIN 7100-AG71
Reserve Requirements of Depository Institutions
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Board is amending Regulation D, Reserve Requirements of
Depository Institutions, to reflect the annual indexing of the reserve
requirement exemption amount and the low reserve tranche for 2024. The
annual indexation of these amounts is required notwithstanding the
Board's action in March 2020 of setting all reserve requirement ratios
to zero. The reserve requirement exemption amount for 2023 will remain
$36.1 million, unchanged for 2024, consistent with the Federal Reserve
Act (the ``Act''). The Board is amending Regulation D to set the amount
of the low reserve tranche at $644.0 million (decreased from $691.7
million in 2023). The adjustment to the low reserve tranche is derived
using a statutory formula specified in the Act. The annual indexation
of the reserve requirement exemption amount and low reserve tranche is
required by statute but will not affect depository institutions'
reserve requirements, which will remain zero.
DATES:
Effective date: December 29, 2023.
Compliance date: The new low reserve tranche will apply beginning
January 1, 2024.
FOR FURTHER INFORMATION CONTACT: Benjamin Snodgrass, Senior Counsel
(202/263-4877), Legal Division; Kristen Payne, Lead Financial
Institution and Policy Analyst (202/452-2872), Division of Monetary
Affairs; for users of TTY/TRS, please call 711 from any telephone,
anywhere in the United States, or (202) 263-4869; Board of Governors of
the Federal Reserve System, 20th and C Streets NW, Washington, DC
20551.
SUPPLEMENTARY INFORMATION: Section 19(b)(2) of the Act (12 U.S.C.
461(b)(2)) requires each depository institution to maintain reserves
against its transaction accounts and nonpersonal time deposits, as
prescribed by Board regulations, for the purpose of implementing
monetary policy. The Board's actions with respect to this provision are
discussed below.
I. Reserve Requirements
Section 19(b) of the Act authorizes different ranges of reserve
requirement ratios depending on the amount of transaction account
balances at a depository institution. Section 19(b)(11)(A) of the Act
(12 U.S.C. 461(b)(11)(A)) provides that a zero percent reserve
requirement ratio shall apply at each depository institution to total
reservable liabilities that do not exceed a certain amount, known as
the reserve requirement exemption amount. Section 19(b)(11)(B) provides
that, before December 31 of each year, the Board shall issue a
regulation adjusting the reserve requirement exemption amount for the
next calendar year if total reservable liabilities held at all
depository institutions increase from one year to the next. The Act
requires the percentage increase in the reserve requirement exemption
amount to be 80 percent of the percentage increase in total reservable
liabilities of all depository institutions over the one-year period
that ends on the June 30 prior to the adjustment. No adjustment is made
to the reserve requirement exemption amount if total reservable
liabilities held at all depository institutions should decrease during
the applicable time period.
Total reservable liabilities of all depository institutions
decreased by 8.6 percent, from $20,841 billion to $19,057 billion,
between June 30, 2022, and June 30, 2023.\1\ Accordingly, the reserve
requirement exemption amount for 2024 will remain at $36.1 million,
unchanged from its level in 2023.\2\
---------------------------------------------------------------------------
\1\ The June 30th value for 2022 may differ from the value used
in the previous year's calculation because depository institutions
may revise their deposit data to correct for inaccuracies.
\2\ Consistent with Board practice, the low reserve tranche and
reserve requirement exemption amounts have been rounded to the
nearest $0.1 million.
---------------------------------------------------------------------------
Pursuant to Section 19(b)(2) of the Act (12 U.S.C. 461(b)(2)),
transaction account balances maintained at each depository institution
over the reserve requirement exemption amount and up to a certain
amount, known as the low reserve tranche, may be subject to a reserve
requirement ratio of not more than 3 percent (and which may be zero).
Transaction account balances over the low reserve tranche may be
subject to a reserve requirement ratio of not more than 14 percent (and
which may be zero). Section 19(b)(2) also provides that, before
December 31 of each year, 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 decreased
8.6 percent, from $17,549 billion to $16,037 billion, between June 30,
2022, and June 30, 2023.\3\ Accordingly, the Board is amending
Regulation D to set the low reserve tranche for net transaction
accounts for 2024 at $644.0 million, a decrease of $47.7 million from
2023. The new low reserve tranche will be effective for all depository
institutions beginning January 1, 2024.
---------------------------------------------------------------------------
\3\ The June 30th value for 2022 may differ from the value used
in the previous year's calculation because depository institutions
may revise their deposit data to correct for inaccuracies.
---------------------------------------------------------------------------
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 2024 is required by statute but will not affect
depository institutions' reserve requirements, which will remain zero.
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
[[Page 83317]]
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.
---------------------------------------------------------------------------
\4\ 5 U.S.C. 603 and 604.
---------------------------------------------------------------------------
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995,\5\ the
Board reviewed this final rule. No collections of information pursuant
to the Paperwork Reduction Act are contained in the final rule.
---------------------------------------------------------------------------
\5\ 44 U.S.C. 3506; 5 CFR part 1320.
---------------------------------------------------------------------------
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)
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 204.4 is amended by revising paragraph (f) to read as
follows:
Sec. 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 0 percent of amount.
amount ($36.1 million) and up to low
reserve tranche ($644.0 million).
Over low reserve tranche ($644.0 $0 plus 0 percent of
million). amount over $644.0
million.
Nonpersonal time deposits............... 0 percent.
Eurocurrency liabilities................ 0 percent.
------------------------------------------------------------------------
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. 2023-26212 Filed 11-28-23; 8:45 am]
BILLING CODE 6210-01-P
