Request for Information and Comment on Operational Aspects of Federal Reserve Bank Extensions of Discount Window and Intraday Credit, 73415-73418 [2024-20418]

Download as PDF Federal Register / Vol. 89, No. 175 / Tuesday, September 10, 2024 / Notices evidence necessary to inform the underlying scientific basis for the review of the primary NAAQS for oxides of nitrogen. EPA is planning to release the external review draft of the ISA for Oxides of Nitrogen—Health Criteria for review by the Clean Air Scientific Advisory Committee (CASAC) and the public in late 2025. II. Workshop Information Members of the public may attend the webinars as observers. Space in the teleconferences may be limited, and reservations will be accepted on a firstcome, first-served basis. Registration for the workshop is available online at https://www.eventbrite.com/o/us-epa81991238023. Wayne Cascio, Director, Center for Public Health and Environmental Assessment. [FR Doc. 2024–20350 Filed 9–9–24; 8:45 am] BILLING CODE 6560–50–P EXPORT-IMPORT BANK [Public Notice: 2024–6095] Agency Information Collection Activities: Submission to the Office of Management and Budget for Review and Approval; EIB 95–09 Comment Request; Export-Import Bank Letter of Interest Application Export-Import Bank of the United States. ACTION: Notice of information collection; request for comment. AGENCY: The Export-Import Bank of the United States (EXIM), pursuant to the Export-Import Bank Act of 1945, as amended, facilitates the finance of the export of U.S. goods and services. As part of its continuing effort to reduce paperwork and respondent burden, EXIM invites the general public and other Federal agencies to comment on the proposed information collection, as required by the paperwork Reduction Act of 1995. DATES: Comments must be received on or before November 12, 2024 to be assured of consideration. ADDRESSES: Comments may be submitted electronically on www.regulations.gov (EIB 95–09) by email to Donna Schneider, donna.schneider@exim.gov, or by mail to Donna Schneider, Export-Import Bank of the United States, 811 Vermont Ave. NW, Washington, DC 20571. The form can be reviewed at https:// img.exim.gov/s3fs-public/pub/pending/ EIB+95-09+Letter+of+Interest+ Application_08_2024.pdf. khammond on DSKJM1Z7X2PROD with NOTICES SUMMARY: VerDate Sep<11>2014 16:45 Sep 09, 2024 Jkt 262001 73415 Board of Governors of the Federal Reserve System. ACTION: Request for information and comment. RFI does not seek comment on discount window or intraday credit policy considerations, such as the eligibility criteria and terms for discount window advances and intraday credit. DATES: Comments must be received by December 9, 2024. ADDRESSES: You may submit comments, identified by Docket No. OP–1838, by any of the following methods: • Agency website: https://www.federal reserve.gov. Follow the instructions for submitting comments at https:// www.federalreserve.gov/generalinfo/ foia/ProposedRegs.cfm. • Email: regs.comments@ federalreserve.gov. Include docket number in the subject line of the message. • FAX: (202) 452–3819. • Mail: Ann E. Misback, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue NW, Washington, DC 20551. All public comments will be made available on the Board’s website at https://www.federalreserve.gov/ generalinfo/foia/ProposedRegs.cfm as submitted, and will not be modified to remove confidential, contact or any identifiable information. Public comments may also be viewed electronically or in paper in Room M– 4365A, 2001 C St. NW, Washington, DC 20051 between 9:00 a.m. and 5:00 p.m. during Federal business weekdays. FOR FURTHER INFORMATION CONTACT: Lyle Kumasaka, Lead Financial Institution Policy Analyst, (202) 452–2382, Division of Monetary Affairs; Brajan Kola, Lead Financial Institution Policy Analyst, (202) 591–6094, Division of Reserve Bank Operations and Payment Systems; Benjamin Snodgrass, Senior Counsel, (202) 263–4877 or Corinne Milliken Van Ness, Senior Counsel, (202) 641–1605, Legal Division, Board of Governors of the Federal Reserve System, 20th and C Streets NW, Washington, DC 20551. For users of text telephone systems (TTY) or any TTYbased Telecommunications Relay Services, please call 711 from any telephone, anywhere in the United States. SUPPLEMENTARY INFORMATION: The Board of Governors of the Federal Reserve System (Board) seeks public input on questions related to the operational aspects of Federal Reserve Bank (Reserve Bank) extensions of discount window and intraday credit. This Request for Information (RFI) offers the opportunity for interested individuals and institutions to identify ways to enhance the efficiency of Reserve Bank credit operations. This I. Background The discount window of the Federal Reserve System (Federal Reserve) plays an important role in the effective implementation of monetary policy and in supporting the liquidity of the banking system and overall financial stability. The discount window allows depository institutions and U.S. branches and agencies of foreign banks (hereinafter, collectively referred to as To request additional information, please contact Donna Schneider, donna.schneider@exim.gov, 202–565– 3612. FOR FURTHER INFORMATION CONTACT: The Letter of Interest (LI) is an indication of Export-Import (EXIM) Bank’s willingness to consider financing a given export transaction. EXIM uses the requested information to determine the applicability of the proposed export transaction and determines whether to consider financing that transaction. Title and Form Number: EIB 95–09, Letter of Interest Application. OMB Number: 3048–0005. Type of Review: Regular. Need and Use: The Letter of Interest (LI) is an indication of Export-Import (EXIM) Bank’s willingness to consider financing a given export transaction. EXIM uses the requested information to determine the applicability of the proposed export transaction system prompts and determines whether to consider financing that transaction. Affected Public: This form affects entities involved in the export of U.S. goods and services. Annual Number of Respondents: 400. Estimated Time per Respondent: 0.75 hours. Annual Burden Hours: 300. Frequency of Reporting of Use: On occasion. SUPPLEMENTARY INFORMATION: Dated: September 5, 2024. Andrew Smith, Records Officer. [FR Doc. 2024–20379 Filed 9–9–24; 8:45 am] BILLING CODE 6690–01–P FEDERAL RESERVE SYSTEM [Docket No. OP–1838] Request for Information and Comment on Operational Aspects of Federal Reserve Bank Extensions of Discount Window and Intraday Credit AGENCY: SUMMARY: PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 E:\FR\FM\10SEN1.SGM 10SEN1 73416 Federal Register / Vol. 89, No. 175 / Tuesday, September 10, 2024 / Notices depository institutions) to borrow from the Reserve Banks after executing legal agreements and pledging collateral.1 By providing ready access to funding, the discount window helps depository institutions manage their liquidity risks efficiently and avoid actions that would have negative consequences for their customers, such as withdrawing credit during times of market stress. Thus, the discount window supports the smooth flow of credit to households and businesses.2 The twelve Reserve Banks operate the discount window and work together to promote consistent and effective discount window operations across the Federal Reserve. The Board oversees Reserve Bank discount window operations and provides guidance to Reserve Banks on discount window policy through the Board’s Regulation A (12 CFR part 201). In addition to the discount window, Reserve Banks provide intraday credit (also known as daylight overdrafts) to depository institutions that are eligible for regular access to the discount window and have accounts at a Reserve Bank.3 Intraday credit supports the safety and efficiency of the payments system. Intraday credit, if collateralized, draws on the same pool of collateral as the discount window, with the same collateral margins and eligibility standards as for the discount window. The Federal Reserve Policy on Payment System Risk (PSR policy) outlines the methods that Reserve Banks use to mitigate credit risk associated with providing intraday credit.4 The Federal Reserve continually assesses and strives to improve the operational aspects of discount window and intraday credit. These assessments have led, for example, to the recent introduction of Discount Window Direct, a secure online portal that can be used to request discount window advances. The Federal Reserve routinely engages with depository institutions regarding operational aspects of the discount window and intraday credit. Formally seeking broad input from the public on these issues should help the Federal Reserve further improve discount window and intraday credit operations. khammond on DSKJM1Z7X2PROD with NOTICES 1 The Board’s Regulation A (12 CFR part 201) sets out which depository institutions and U.S. branches and agencies of foreign banks are eligible to borrow from a Reserve Bank. 2 See, https://www.federalreserve.gov/ monetarypolicy/discountrate.htm. 3 An extension of intraday credit or a ‘‘daylight overdraft’’ occurs when an institution’s Reserve Bank account is in a negative position at any point during the business day. 4 See, https://www.federalreserve.gov/ paymentsystems/psr_about.htm. VerDate Sep<11>2014 16:45 Sep 09, 2024 Jkt 262001 II. Reserve Bank Credit Operations A. Discount Window Operations The Reserve Banks extend discount window credit to depository institutions by making advances secured by acceptable collateral. In order to borrow from the discount window, a depository institution must take several steps. First, it must complete, and submit to its lending Reserve Bank, the necessary lending agreements and corporate resolutions, which are described in the Reserve Banks’ Operating Circular No. 10 (Lending).5 Second, it must pledge collateral that is acceptable to the lending Reserve Bank. Finally, once it has submitted the necessary legal documents and pledged collateral, it must request an advance from its lending Reserve Bank. Depository institutions may request discount window advances over the phone or by using the recently introduced Discount Window Direct secure online portal.6 A request may be made only by an authorized person identified on the depository institution’s current official authorization list.7 A discount window advance is issued with a stated maturity date. The lending Reserve Bank will normally credit the borrowing institution’s (or its correspondent’s) account at 7:00 p.m. ET, the close of the business day. Reserve Banks may approve earlier availability of advance proceeds if requested by the borrowing institution. Multi-day advances may be prepaid in whole or in part at the borrowing depository institution’s option. Repayment of principal and accrued interest is charged to the account to which the advance was posted. B. Intraday Credit Operations The Reserve Banks provide uncollateralized and collateralized intraday credit to eligible depository institutions. The Reserve Banks mitigate their credit risk through several methods, including by offering a financial incentive for institutions to collateralize daylight overdrafts, setting limits on daylight overdrafts in institutions’ Reserve Bank accounts, and requiring collateral in certain situations.8 Under the PSR policy, each depository institution that maintains an account at a Reserve Bank is assigned or may establish a limit on the amount of 5 See, https://www.frbservices.org/resources/ rules-regulations/operating-circulars.html#10. 6 See, https://www.frbdiscountwindow.org/ Articles/2024/06/24/12/05/DWD_20240624. 7 The relevant documentation is appended to the Reserve Banks’ Operating Circular No. 10 (Lending). 8 The Reserve Banks do not charge a fee on collateralized daylight overdrafts. PO 00000 Frm 00067 Fmt 4703 Sfmt 4703 uncollateralized daylight overdrafts that the depository institution may incur in its Reserve Bank account. This limit is commonly referred to as the ‘‘net debit cap.’’ In addition, subject to Reserve Bank approval, certain institutions may pledge collateral to access daylight overdraft capacity above their net debit caps. The combination of the uncollateralized capacity from the institution’s net debit cap plus the additional collateralized capacity is known as the ‘‘maximum daylight overdraft capacity’’ or ‘‘max cap.’’ C. Collateral Reserve Banks accept a wide range of loans and securities as collateral for discount window advances.9 Collateral pledged to a Reserve Bank also secures any other obligations of the pledging depository institution to a Reserve Bank, including intraday credit. Collateral is assigned a lendable value deemed appropriate by the Reserve Bank.10 Lendable value is based on market value (or a market-value estimate) multiplied by a margin. Depository institutions pledge securities to a Reserve Bank by transferring them to restricted securities accounts held at approved securities depositories, including the Fedwire® Securities Service (FSS) and The Depository Trust Company (DTC).11 In the absence of unusual concerns about the eligibility or valuation of the security, the pledge is generally effected and given lendable value the same day, subject to the securities depositories’ operating hours. The Reserve Banks accept multiple loan types as collateral, including consumer loans; residential and commercial real estate loans; and commercial, industrial, or agricultural loans. Loans are generally pledged to Reserve Banks through a ‘‘borrower in custody’’ (BIC) arrangement, in which a depository institution pledges a portfolio of its loans while maintaining possession of the loan documentation on its own premises. Loans may also be pledged under a custodial arrangement 9 Assets accepted as collateral can be found at https://www.frbdiscountwindow.org/Pages/ Collateral/collateral_eligibility. Reserve Banks require a perfected, first-priority security interest in collateral. 10 The current collateral margins tables can be found at https://www.frbdiscountwindow.org/ Pages/Collateral/collateral_valuation. 11 Fedwire is a registered service mark of the Reserve Banks. A list of marks related to financial services products that are offered to financial institutions by the Reserve Banks is available at FRBservices.org®. E:\FR\FM\10SEN1.SGM 10SEN1 Federal Register / Vol. 89, No. 175 / Tuesday, September 10, 2024 / Notices khammond on DSKJM1Z7X2PROD with NOTICES where the loans are maintained on the premises of a custodian.12 Generally, the process for pledging loans takes longer than the process for pledging securities given the additional steps required for the Reserve Banks to obtain information on loan collateral. Pledgors are generally expected to provide data on individual pledged loans so that the Reserve Bank can determine the fair market and lendable value of the collateral—except for credit card receivables, which are reported in pools. Larger depository institutions (generally those with $50 billion or more in total consolidated assets), as well as all U.S. branches and agencies of foreign banks, are generally expected to provide more data on loan collateral than are other depository institutions. For these larger institutions and U.S. branches and agencies of foreign banks, the number of required data elements varies by type of loan. A depository institution works with its lending Reserve Bank to ensure that the Reserve Bank has a perfected, firstpriority security interest in collateral. For example, when a Reserve Bank receives a pledge of loans from a depository institution, the Reserve Bank will file a financing statement on the pledged loans, conduct a lien search, and, if necessary, take steps to protect its security interest against the claims of other creditors. In some cases, a Federal Home Loan Bank (FHLB) may have a ‘‘blanket lien’’ that already encumbers some portion of a depository institution’s assets. The Reserve Banks and FHLBs coordinate to ensure that advances to the same borrower are not secured by the same collateral. III. Public Information on Discount Window and Intraday Credit Operations Depository institutions and other members of the public can obtain guidance on Federal Reserve operational processes from the Reserve Banks’ Discount Window and Payment System Risk website (https://www.frbdiscount window.org). This website provides instructions for accessing discount window and intraday credit, as well as contact information for Reserve Bank discount window offices. In addition, the Board publishes general information about the discount window on its website (https://www.federal reserve.gov/monetarypolicy/discount rate.htm). To assist depository institutions in implementing the PSR policy, the 12 Custodians must be approved by the Reserve Bank and are required to execute an agreement found in Appendix 5 to the Reserve Banks’ Operating Circular No. 10 (Lending). VerDate Sep<11>2014 16:45 Sep 09, 2024 Jkt 262001 Federal Reserve has prepared two guidance documents: the Overview of the Federal Reserve’s Payment System Risk Policy on Intraday Credit (Overview) and the Guide to the Federal Reserve’s Payment System Risk Policy on Intraday Credit (Guide).13 The Guide contains detailed eligibility standards for requesting and maintaining uncollateralized intraday credit capacity. IV. Request for Information The Federal Reserve continually assesses and strives to improve operational aspects of the Reserve Banks’ extensions of discount window and intraday credit. Responses to this RFI will inform the Federal Reserve as it considers further improvements to promote efficiency and reduce burden on depository institutions. In addition to reducing burden on depository institutions, such improvements could encourage institutions to use Federal Reserve credit, increasing the effectiveness of the discount window and intraday credit in meeting the Federal Reserve’s goals. This RFI only solicits views on creditrelated operational practices and not on broader discount window or intraday credit policy considerations, such as the terms of lending for discount window programs or eligibility standards for intraday credit. The Federal Reserve is seeking responses to the following questions: Discount Window Operations 1. For the following discount window operational processes, what operational frictions or inefficiencies exist? Are there any specific actions that could be taken by the Federal Reserve to address those issues? a. Submitting legal documents to a Reserve Bank. b. Pledging or withdrawing securities as collateral. c. Pledging or withdrawing loans as collateral. d. Requesting discount window advances and receiving proceeds. e. Repaying discount window advances before their full maturity. f. Using the Discount Window Direct online portal. 2. Are there operational frictions or inefficiencies in the processes mentioned above that are particularly acute or pressing for FHLB members? What specific improvements could be made with respect to depository institutions that are members of an FHLB? 73417 3. Are there operational frictions or inefficiencies in the processes mentioned above that are particularly acute or pressing for smaller depository institutions or depository institutions that use correspondents to interact with the Federal Reserve? What specific improvements could be made with respect to these institutions? Intraday Credit Operations 4. Are there operational or communications-related frictions associated with accessing intraday credit (i.e., daylight overdrafts)? For example: a. Knowledge about the availability of intraday credit. b. Timing of credits and debits impacting the account balance, including discount window loans and repayments. c. Processes for establishing an uncollateralized intraday credit limit or ‘‘net debit cap.’’ d. Voluntary collateralization of daylight overdrafts. e. Processes for requesting additional collateralized intraday credit capacity or a ‘‘max cap.’’ f. Reporting of intraday credit usage and/or fees. g. Expectation to effectively manage accounts to avoid breaches of intraday credit limits. h. Expectation to avoid overnight overdrafts. 5. Are there intraday credit frictions and issues in the items mentioned above that are particularly acute or pressing for smaller depository institutions? Information on Discount Window and Intraday Credit Operations 6. Are there improvements that could be made to Federal Reserve communications practices about discount window and intraday credit operations? For example: a. Provision of operational information and guidance to depository institutions via the Reserve Banks’ discount window and payment system risk website (https://www.frbdiscount window.org). b. Provision of operational information and guidance to depository institutions on a bilateral basis from an institution’s lending Reserve Bank. c. Provision of information to the general public via the Board’s website (https://www.federalreserve.gov/ monetarypolicy/discountrate.htm; https://www.federalreserve.gov/ paymentsystems/psr_about.htm). Other 13 The Overview and the Guide are available at https://www.federalreserve.gov/paymentsystems/ psr_relpolicies.htm. PO 00000 Frm 00068 Fmt 4703 Sfmt 4703 7. Are there other changes that the Federal Reserve could make to improve E:\FR\FM\10SEN1.SGM 10SEN1 73418 Federal Register / Vol. 89, No. 175 / Tuesday, September 10, 2024 / Notices the operational efficiency of the discount window and intraday credit? 8. What operational aspects of accessing Federal Reserve discount window and intraday credit programs are most costly or burdensome for depository institutions, both in terms of direct expenses and staff hours? By order of the Board of Governors of the Federal Reserve System. Ann E. Misback, Secretary of the Board. [FR Doc. 2024–20418 Filed 9–9–24; 8:45 am] BILLING CODE 6210–01–P FEDERAL RESERVE SYSTEM khammond on DSKJM1Z7X2PROD with NOTICES Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding Company The notificants listed below have applied under the Change in Bank Control Act (Act) (12 U.S.C. 1817(j)) and § 225.41 of the Board’s Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the applications are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)). The public portions of the applications listed below, as well as other related filings required by the Board, if any, are available for immediate inspection at the Federal Reserve Bank(s) indicated below and at the offices of the Board of Governors. This information may also be obtained on an expedited basis, upon request, by contacting the appropriate Federal Reserve Bank and from the Board’s Freedom of Information Office at https://www.federalreserve.gov/foia/ request.htm. Interested persons may express their views in writing on the standards enumerated in paragraph 7 of the Act. Comments received are subject to public disclosure. In general, comments received will be made available without change and will not be modified to remove personal or business information including confidential, contact, or other identifying information. Comments should not include any information such as confidential information that would not be appropriate for public disclosure. Comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors, Ann E. Misback, Secretary of the Board, 20th Street and Constitution Avenue NW, Washington, DC 20551–0001, not later than September 25, 2024. A. Federal Reserve Bank of St. Louis (Holly A. Rieser, Senior Manager) P.O. VerDate Sep<11>2014 16:45 Sep 09, 2024 Jkt 262001 Box 442, St. Louis, Missouri 63166– 2034. Comments can also be sent electronically to Comments.applications@stls.frb.org: 1. Steven Harrell, as trustee of the Steven D. Harrell Revocable Trust, Springdale, Missouri; Jonathan W. Harrell, individually and as trustee of the Carter Dunn Harrell Share Trust, Samantha Ginger Harrell Share Trust, Ryan Elise Harrell Share Trust, Tyler Alan Harrell Share Trust, and JH Revocable Trust, Bennett S. Harrell, as trustee of the Bennett S. Harrell Revocable Trust and custodian of certain minor children, Ginger Fischer, and Julie Harrell, all of Rogers, Arkansas; Shannon Harrell Beard, Paris, Texas; and Maxwell Hunter Harrell, Lowell, Arkansas; to establish the Harrell Family Control Group, a group acting in concert, to retain voting shares of Harrell Bancshares, Inc., Camden, Arkansas, and thereby indirectly retain voting shares of Generations Bank, Rogers, Arkansas. Board of Governors of the Federal Reserve System. Michele Taylor Fennell, Associate Secretary of the Board. [FR Doc. 2024–20395 Filed 9–9–24; 8:45 am] BILLING CODE P GENERAL SERVICES ADMINISTRATION [OMB Control No. 3090–0027; Docket No. 2024–0001; Sequence No. 8] Information Collection; General Services Administration Acquisition Regulation; Contract Administration and Quality Assurance (GSA Forms 1678 and 308) Office of Acquisition Policy, General Services Administration (GSA). ACTION: Notice and request for comments. AGENCY: In accordance with the Paperwork Reduction Act of 1995, and the Office of Management and Budget (OMB) regulations, GSA invites the public to comment on a request to review and approve an extension of a previously approved information collection requirement regarding GSA clauses and Forms that assist with contract administration and quality assurance (i.e., monitoring, delivery, and inspection) of supply orders. DATES: Submit comments on or before: November 12, 2024. ADDRESSES: Submit comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this SUMMARY: PO 00000 Frm 00069 Fmt 4703 Sfmt 4703 burden to https://www.regulations.gov. Submit comments via the Federal eRulemaking portal by searching the OMB Control number 3090–0027. Select the link ‘‘Comment Now’’ that corresponds with ‘‘Information Collection 3090–0027, Contract Administration and Quality Assurance (GSA Forms 1678 and 308)’’. Follow the instructions on the screen. Please include your name, company name (if any), and ‘‘Information Collection 3090– 0027, Contract Administration and Quality Assurance (GSA Forms 1678 and 308)’’, on your attached document. If your comment cannot be submitted using https://www.regulations.gov, call or email the points of contact in the FOR FURTHER INFORMATION CONTACT section of this document for alternate instructions. Instructions: Please submit comments only and cite ‘‘Information Collection 3090–0027, Contract Administration and Quality Assurance (GSA Forms 1678 and 308)’’, in all correspondence related to this collection. Comments received generally will be posted without change to regulations.gov, including any personal and/or business confidential information provided. To confirm receipt of your comment(s), please check regulations.gov, approximately two-to-three business days after submission to verify posting. FOR FURTHER INFORMATION CONTACT: Ms. Vernita Misidor, Procurement Analyst, General Services Acquisition Policy Division, at 202–357–9681 or via email to vernita.misidor@gsa.gov. SUPPLEMENTARY INFORMATION: A. Purpose Under certain contracts the Government must rely on contractor inspection in lieu of Government inspection. Therefore, GSA’s Federal Acquisition Service requires documentation from its contractors to effectively monitor contractor performance and ensure that it will be able to take timely action should that performance be deficient. B. Annual Reporting Burden GSA Form 1678 Annual Responses: 250,0000. Responses per Respondent: 1. Total Annual Responses: 250,0000. Hours per Response: 0.50. Total Burden Hours: 125,000. GSA Form 308 Annual Responses: 2,600. Responses per Respondent: 1. Total Annual Responses: 2,600. Hours per Response: 0.50. Total Burden Hours: 1,300. E:\FR\FM\10SEN1.SGM 10SEN1

Agencies

[Federal Register Volume 89, Number 175 (Tuesday, September 10, 2024)]
[Notices]
[Pages 73415-73418]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-20418]


=======================================================================
-----------------------------------------------------------------------

FEDERAL RESERVE SYSTEM

[Docket No. OP-1838]


Request for Information and Comment on Operational Aspects of 
Federal Reserve Bank Extensions of Discount Window and Intraday Credit

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Request for information and comment.

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

SUMMARY: The Board of Governors of the Federal Reserve System (Board) 
seeks public input on questions related to the operational aspects of 
Federal Reserve Bank (Reserve Bank) extensions of discount window and 
intraday credit. This Request for Information (RFI) offers the 
opportunity for interested individuals and institutions to identify 
ways to enhance the efficiency of Reserve Bank credit operations. This 
RFI does not seek comment on discount window or intraday credit policy 
considerations, such as the eligibility criteria and terms for discount 
window advances and intraday credit.

DATES: Comments must be received by December 9, 2024.

ADDRESSES: You may submit comments, identified by Docket No. OP-1838, 
by any of the following methods:
     Agency website: https://www.federalreserve.gov. Follow the 
instructions for submitting comments at https://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
     Email: [email protected]. Include docket 
number in the subject line of the message.
     FAX: (202) 452-3819.
     Mail: Ann E. Misback, Secretary, Board of Governors of the 
Federal Reserve System, 20th Street and Constitution Avenue NW, 
Washington, DC 20551. All public comments will be made available on the 
Board's website at https://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted, and will not be modified to remove 
confidential, contact or any identifiable information. Public comments 
may also be viewed electronically or in paper in Room M-4365A, 2001 C 
St. NW, Washington, DC 20051 between 9:00 a.m. and 5:00 p.m. during 
Federal business weekdays.

FOR FURTHER INFORMATION CONTACT: Lyle Kumasaka, Lead Financial 
Institution Policy Analyst, (202) 452-2382, Division of Monetary 
Affairs; Brajan Kola, Lead Financial Institution Policy Analyst, (202) 
591-6094, Division of Reserve Bank Operations and Payment Systems; 
Benjamin Snodgrass, Senior Counsel, (202) 263-4877 or Corinne Milliken 
Van Ness, Senior Counsel, (202) 641-1605, Legal Division, Board of 
Governors of the Federal Reserve System, 20th and C Streets NW, 
Washington, DC 20551. For users of text telephone systems (TTY) or any 
TTY-based Telecommunications Relay Services, please call 711 from any 
telephone, anywhere in the United States.

SUPPLEMENTARY INFORMATION:

I. Background

    The discount window of the Federal Reserve System (Federal Reserve) 
plays an important role in the effective implementation of monetary 
policy and in supporting the liquidity of the banking system and 
overall financial stability. The discount window allows depository 
institutions and U.S. branches and agencies of foreign banks 
(hereinafter, collectively referred to as

[[Page 73416]]

depository institutions) to borrow from the Reserve Banks after 
executing legal agreements and pledging collateral.\1\ By providing 
ready access to funding, the discount window helps depository 
institutions manage their liquidity risks efficiently and avoid actions 
that would have negative consequences for their customers, such as 
withdrawing credit during times of market stress. Thus, the discount 
window supports the smooth flow of credit to households and 
businesses.\2\
---------------------------------------------------------------------------

    \1\ The Board's Regulation A (12 CFR part 201) sets out which 
depository institutions and U.S. branches and agencies of foreign 
banks are eligible to borrow from a Reserve Bank.
    \2\ See, https://www.federalreserve.gov/monetarypolicy/discountrate.htm.
---------------------------------------------------------------------------

    The twelve Reserve Banks operate the discount window and work 
together to promote consistent and effective discount window operations 
across the Federal Reserve. The Board oversees Reserve Bank discount 
window operations and provides guidance to Reserve Banks on discount 
window policy through the Board's Regulation A (12 CFR part 201).
    In addition to the discount window, Reserve Banks provide intraday 
credit (also known as daylight overdrafts) to depository institutions 
that are eligible for regular access to the discount window and have 
accounts at a Reserve Bank.\3\ Intraday credit supports the safety and 
efficiency of the payments system. Intraday credit, if collateralized, 
draws on the same pool of collateral as the discount window, with the 
same collateral margins and eligibility standards as for the discount 
window. The Federal Reserve Policy on Payment System Risk (PSR policy) 
outlines the methods that Reserve Banks use to mitigate credit risk 
associated with providing intraday credit.\4\
---------------------------------------------------------------------------

    \3\ An extension of intraday credit or a ``daylight overdraft'' 
occurs when an institution's Reserve Bank account is in a negative 
position at any point during the business day.
    \4\ See, https://www.federalreserve.gov/paymentsystems/psr_about.htm.
---------------------------------------------------------------------------

    The Federal Reserve continually assesses and strives to improve the 
operational aspects of discount window and intraday credit. These 
assessments have led, for example, to the recent introduction of 
Discount Window Direct, a secure online portal that can be used to 
request discount window advances. The Federal Reserve routinely engages 
with depository institutions regarding operational aspects of the 
discount window and intraday credit. Formally seeking broad input from 
the public on these issues should help the Federal Reserve further 
improve discount window and intraday credit operations.

II. Reserve Bank Credit Operations

A. Discount Window Operations

    The Reserve Banks extend discount window credit to depository 
institutions by making advances secured by acceptable collateral. In 
order to borrow from the discount window, a depository institution must 
take several steps. First, it must complete, and submit to its lending 
Reserve Bank, the necessary lending agreements and corporate 
resolutions, which are described in the Reserve Banks' Operating 
Circular No. 10 (Lending).\5\ Second, it must pledge collateral that is 
acceptable to the lending Reserve Bank. Finally, once it has submitted 
the necessary legal documents and pledged collateral, it must request 
an advance from its lending Reserve Bank.
---------------------------------------------------------------------------

    \5\ See, https://www.frbservices.org/resources/rules-regulations/operating-circulars.html#10.
---------------------------------------------------------------------------

    Depository institutions may request discount window advances over 
the phone or by using the recently introduced Discount Window Direct 
secure online portal.\6\ A request may be made only by an authorized 
person identified on the depository institution's current official 
authorization list.\7\ A discount window advance is issued with a 
stated maturity date. The lending Reserve Bank will normally credit the 
borrowing institution's (or its correspondent's) account at 7:00 p.m. 
ET, the close of the business day. Reserve Banks may approve earlier 
availability of advance proceeds if requested by the borrowing 
institution. Multi-day advances may be prepaid in whole or in part at 
the borrowing depository institution's option. Repayment of principal 
and accrued interest is charged to the account to which the advance was 
posted.
---------------------------------------------------------------------------

    \6\ See, https://www.frbdiscountwindow.org/Articles/2024/06/24/12/05/DWD_20240624.
    \7\ The relevant documentation is appended to the Reserve Banks' 
Operating Circular No. 10 (Lending).
---------------------------------------------------------------------------

B. Intraday Credit Operations

    The Reserve Banks provide uncollateralized and collateralized 
intraday credit to eligible depository institutions. The Reserve Banks 
mitigate their credit risk through several methods, including by 
offering a financial incentive for institutions to collateralize 
daylight overdrafts, setting limits on daylight overdrafts in 
institutions' Reserve Bank accounts, and requiring collateral in 
certain situations.\8\ Under the PSR policy, each depository 
institution that maintains an account at a Reserve Bank is assigned or 
may establish a limit on the amount of uncollateralized daylight 
overdrafts that the depository institution may incur in its Reserve 
Bank account. This limit is commonly referred to as the ``net debit 
cap.'' In addition, subject to Reserve Bank approval, certain 
institutions may pledge collateral to access daylight overdraft 
capacity above their net debit caps. The combination of the 
uncollateralized capacity from the institution's net debit cap plus the 
additional collateralized capacity is known as the ``maximum daylight 
overdraft capacity'' or ``max cap.''
---------------------------------------------------------------------------

    \8\ The Reserve Banks do not charge a fee on collateralized 
daylight overdrafts.
---------------------------------------------------------------------------

C. Collateral

    Reserve Banks accept a wide range of loans and securities as 
collateral for discount window advances.\9\ Collateral pledged to a 
Reserve Bank also secures any other obligations of the pledging 
depository institution to a Reserve Bank, including intraday credit. 
Collateral is assigned a lendable value deemed appropriate by the 
Reserve Bank.\10\ Lendable value is based on market value (or a market-
value estimate) multiplied by a margin.
---------------------------------------------------------------------------

    \9\ Assets accepted as collateral can be found at https://www.frbdiscountwindow.org/Pages/Collateral/collateral_eligibility. 
Reserve Banks require a perfected, first-priority security interest 
in collateral.
    \10\ The current collateral margins tables can be found at 
https://www.frbdiscountwindow.org/Pages/Collateral/collateral_valuation.
---------------------------------------------------------------------------

    Depository institutions pledge securities to a Reserve Bank by 
transferring them to restricted securities accounts held at approved 
securities depositories, including the Fedwire[supreg] Securities 
Service (FSS) and The Depository Trust Company (DTC).\11\ In the 
absence of unusual concerns about the eligibility or valuation of the 
security, the pledge is generally effected and given lendable value the 
same day, subject to the securities depositories' operating hours.
---------------------------------------------------------------------------

    \11\ Fedwire is a registered service mark of the Reserve Banks. 
A list of marks related to financial services products that are 
offered to financial institutions by the Reserve Banks is available 
at FRBservices.org[supreg].
---------------------------------------------------------------------------

    The Reserve Banks accept multiple loan types as collateral, 
including consumer loans; residential and commercial real estate loans; 
and commercial, industrial, or agricultural loans. Loans are generally 
pledged to Reserve Banks through a ``borrower in custody'' (BIC) 
arrangement, in which a depository institution pledges a portfolio of 
its loans while maintaining possession of the loan documentation on its 
own premises. Loans may also be pledged under a custodial arrangement

[[Page 73417]]

where the loans are maintained on the premises of a custodian.\12\
---------------------------------------------------------------------------

    \12\ Custodians must be approved by the Reserve Bank and are 
required to execute an agreement found in Appendix 5 to the Reserve 
Banks' Operating Circular No. 10 (Lending).
---------------------------------------------------------------------------

    Generally, the process for pledging loans takes longer than the 
process for pledging securities given the additional steps required for 
the Reserve Banks to obtain information on loan collateral. Pledgors 
are generally expected to provide data on individual pledged loans so 
that the Reserve Bank can determine the fair market and lendable value 
of the collateral--except for credit card receivables, which are 
reported in pools. Larger depository institutions (generally those with 
$50 billion or more in total consolidated assets), as well as all U.S. 
branches and agencies of foreign banks, are generally expected to 
provide more data on loan collateral than are other depository 
institutions. For these larger institutions and U.S. branches and 
agencies of foreign banks, the number of required data elements varies 
by type of loan.
    A depository institution works with its lending Reserve Bank to 
ensure that the Reserve Bank has a perfected, first-priority security 
interest in collateral. For example, when a Reserve Bank receives a 
pledge of loans from a depository institution, the Reserve Bank will 
file a financing statement on the pledged loans, conduct a lien search, 
and, if necessary, take steps to protect its security interest against 
the claims of other creditors. In some cases, a Federal Home Loan Bank 
(FHLB) may have a ``blanket lien'' that already encumbers some portion 
of a depository institution's assets. The Reserve Banks and FHLBs 
coordinate to ensure that advances to the same borrower are not secured 
by the same collateral.

III. Public Information on Discount Window and Intraday Credit 
Operations

    Depository institutions and other members of the public can obtain 
guidance on Federal Reserve operational processes from the Reserve 
Banks' Discount Window and Payment System Risk website (https://www.frbdiscountwindow.org). This website provides instructions for 
accessing discount window and intraday credit, as well as contact 
information for Reserve Bank discount window offices. In addition, the 
Board publishes general information about the discount window on its 
website (https://www.federalreserve.gov/monetarypolicy/discountrate.htm).
    To assist depository institutions in implementing the PSR policy, 
the Federal Reserve has prepared two guidance documents: the Overview 
of the Federal Reserve's Payment System Risk Policy on Intraday Credit 
(Overview) and the Guide to the Federal Reserve's Payment System Risk 
Policy on Intraday Credit (Guide).\13\ The Guide contains detailed 
eligibility standards for requesting and maintaining uncollateralized 
intraday credit capacity.
---------------------------------------------------------------------------

    \13\ The Overview and the Guide are available at https://www.federalreserve.gov/paymentsystems/psr_relpolicies.htm.
---------------------------------------------------------------------------

IV. Request for Information

    The Federal Reserve continually assesses and strives to improve 
operational aspects of the Reserve Banks' extensions of discount window 
and intraday credit. Responses to this RFI will inform the Federal 
Reserve as it considers further improvements to promote efficiency and 
reduce burden on depository institutions. In addition to reducing 
burden on depository institutions, such improvements could encourage 
institutions to use Federal Reserve credit, increasing the 
effectiveness of the discount window and intraday credit in meeting the 
Federal Reserve's goals.
    This RFI only solicits views on credit-related operational 
practices and not on broader discount window or intraday credit policy 
considerations, such as the terms of lending for discount window 
programs or eligibility standards for intraday credit.
    The Federal Reserve is seeking responses to the following 
questions:
Discount Window Operations
    1. For the following discount window operational processes, what 
operational frictions or inefficiencies exist? Are there any specific 
actions that could be taken by the Federal Reserve to address those 
issues?
    a. Submitting legal documents to a Reserve Bank.
    b. Pledging or withdrawing securities as collateral.
    c. Pledging or withdrawing loans as collateral.
    d. Requesting discount window advances and receiving proceeds.
    e. Repaying discount window advances before their full maturity.
    f. Using the Discount Window Direct online portal.
    2. Are there operational frictions or inefficiencies in the 
processes mentioned above that are particularly acute or pressing for 
FHLB members? What specific improvements could be made with respect to 
depository institutions that are members of an FHLB?
    3. Are there operational frictions or inefficiencies in the 
processes mentioned above that are particularly acute or pressing for 
smaller depository institutions or depository institutions that use 
correspondents to interact with the Federal Reserve? What specific 
improvements could be made with respect to these institutions?
Intraday Credit Operations
    4. Are there operational or communications-related frictions 
associated with accessing intraday credit (i.e., daylight overdrafts)? 
For example:
    a. Knowledge about the availability of intraday credit.
    b. Timing of credits and debits impacting the account balance, 
including discount window loans and repayments.
    c. Processes for establishing an uncollateralized intraday credit 
limit or ``net debit cap.''
    d. Voluntary collateralization of daylight overdrafts.
    e. Processes for requesting additional collateralized intraday 
credit capacity or a ``max cap.''
    f. Reporting of intraday credit usage and/or fees.
    g. Expectation to effectively manage accounts to avoid breaches of 
intraday credit limits.
    h. Expectation to avoid overnight overdrafts.
    5. Are there intraday credit frictions and issues in the items 
mentioned above that are particularly acute or pressing for smaller 
depository institutions?

Information on Discount Window and Intraday Credit Operations

    6. Are there improvements that could be made to Federal Reserve 
communications practices about discount window and intraday credit 
operations? For example:
    a. Provision of operational information and guidance to depository 
institutions via the Reserve Banks' discount window and payment system 
risk website (https://www.frbdiscountwindow.org).
    b. Provision of operational information and guidance to depository 
institutions on a bilateral basis from an institution's lending Reserve 
Bank.
    c. Provision of information to the general public via the Board's 
website (https://www.federalreserve.gov/monetarypolicy/discountrate.htm; https://www.federalreserve.gov/paymentsystems/psr_about.htm).

Other

    7. Are there other changes that the Federal Reserve could make to 
improve

[[Page 73418]]

the operational efficiency of the discount window and intraday credit?
    8. What operational aspects of accessing Federal Reserve discount 
window and intraday credit programs are most costly or burdensome for 
depository institutions, both in terms of direct expenses and staff 
hours?

    By order of the Board of Governors of the Federal Reserve 
System.
Ann E. Misback,
Secretary of the Board.
[FR Doc. 2024-20418 Filed 9-9-24; 8:45 am]
BILLING CODE 6210-01-P
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.