82 FR 57886 - Regulation A: Extensions of Credit by Federal Reserve Banks

FEDERAL RESERVE SYSTEM

Federal Register Volume 82, Issue 235 (December 8, 2017)

Page Range		57886-57888
FR Document		2017-26465
The Board of Governors of the Federal Reserve System (``Board'') is proposing to amend its Regulation A to; revise the provisions regarding the establishment of the primary credit rate in a financial emergency, and to delete the provisions relating to the use of credit ratings for collateral for extensions of credit under the former Term Asset-Backed Securities Loan Facility (TALF). The proposed amendments are intended to allow the regulation to address circumstances in which the Federal Open Market Committee has established a target range for the federal funds rate rather than a single target rate, and to reflect the expiration of the TALF program.
Federal Register, Volume 82 Issue 235 (Friday, December 8, 2017)
[Federal Register Volume 82, Number 235 (Friday, December 8, 2017)]
[Proposed Rules]
[Pages 57886-57888]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-26465]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / 
Proposed Rules

[[Page 57886]]



FEDERAL RESERVE SYSTEM

12 CFR Part 201

[Docket No. R-1585; RIN 7100-AE 90]


Regulation A: Extensions of Credit by Federal Reserve Banks

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Board of Governors of the Federal Reserve System 
(``Board'') is proposing to amend its Regulation A to; revise the 
provisions regarding the establishment of the primary credit rate in a 
financial emergency, and to delete the provisions relating to the use 
of credit ratings for collateral for extensions of credit under the 
former Term Asset-Backed Securities Loan Facility (TALF). The proposed 
amendments are intended to allow the regulation to address 
circumstances in which the Federal Open Market Committee has 
established a target range for the federal funds rate rather than a 
single target rate, and to reflect the expiration of the TALF program.

DATES: Comments must be received no later than January 8, 2018.

ADDRESSES: You may submit comments, identified by Docket Number R-1585; 
RIN 7100 AE-90, by any of the following methods:
     Agency Web site: http://www.federalreserve.gov. Follow the 
instructions for submitting comments at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Email: [email protected]. Include docket 
number in the subject line of the message.
     Fax: (202) 452-3819 or (202) 452-3102.
     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 are available from the Board's Web site at 
http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm, as 
submitted, unless modified for technical reasons. Accordingly, your 
comments will not be edited to remove any identifying or contact 
information. Public comments may also be viewed electronically or in 
paper form in Room 3515, 1801 K Street NW. (between 18th and 19th 
Street NW.), between 9:00 a.m. and 5:00 p.m. on weekdays.

FOR FURTHER INFORMATION CONTACT: Sophia H. Allison, Special Counsel, 
(202-452-3565), Legal Division, or Lyle Kumasaka, Senior Financial 
Analyst, 202-452-2382), Division of Monetary Affairs; for users of 
Telecommunications Device for the Deaf (TDD) only, contact 202/263-
4869; Board of Governors of the Federal Reserve System, 20th and C 
Streets, NW., Washington, DC 20551.

SUPPLEMENTARY INFORMATION: The Federal Reserve Banks make primary, 
secondary, and seasonal credit available to depository institutions 
subject to rules and regulations prescribed by the Board. The primary, 
secondary, and seasonal credit rates are the interest rates that the 
twelve Federal Reserve Banks charge for extensions of credit under 
these programs. Under the primary credit program, Federal Reserve Banks 
may extend credit on a very short-term basis, typically overnight, to 
depository institutions that are in generally sound condition in the 
judgment of the Federal Reserve Bank. In accordance with the Federal 
Reserve Act, the primary credit rate is established by the boards of 
directors of the Federal Reserve Banks, subject to the review and 
determination of the Board. The primary credit rate is set forth in 
section 201.51 of Regulation A.

I. Primary Credit Rate in a Financial Emergency

    Regulation A currently provides a procedure for establishing the 
primary credit rate in a financial emergency. Section 201.51(d) of 
Regulation A currently provides that the primary credit rate at a 
Federal Reserve Bank is ``the target federal funds rate of the Federal 
Open Market Committee'' if two conditions are met.\1\ First, in a 
financial emergency the Reserve Bank must have established the primary 
credit rate at that rate.\2\ Second, the chairman of the Board of 
Governors (or, in the chairman's absence, the chairman's designee) must 
certify that a quorum of the Board is not available to act on the 
Reserve Bank's rate establishment.\3\ Finally, Regulation A defines a 
``financial emergency'' as ``a significant disruption to the U.S. money 
markets resulting from an act of war, military or terrorist attack, 
natural disaster, or other catastrophic event.'' \4\
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    \1\ Section 201.51(d)(1) of Regulation A, 12 CFR 201.51(d)(1).
    \2\ Section 201.51(d)(1)(i) of Regulation A, 12 CFR 
201.51(d)(1)(i).
    \3\ Section 201.51(d)(1)(ii) of Regulation A, 12 CFR 
201.51(d)(1)(ii).
    \4\ Section 201.51(d)(2) of Regulation A, 12 CFR 201.51(d)(2).
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    The Federal Open Market Committee (FOMC) currently establishes a 
target range for the federal funds rate. Accordingly, the Board 
proposes to amend section 201.51(d)(1) of Regulation A to provide that, 
in a financial emergency, the primary credit rate is the target federal 
funds rate or, if the FOMC has established a target range for the 
federal funds rate, a rate corresponding to the top of the target 
range.

II. Credit Ratings for TALF

    On November 25, 2008, the Board and Treasury announced the 
establishment of the TALF. The TALF was intended to assist financial 
markets in accommodating the credit needs of consumers and businesses 
of all sizes during the financial crisis by facilitating the issuance 
of asset-backed securities (``ABS'') collateralized by a variety of 
consumer and business loans; it was also intended to improve market 
conditions for ABS more generally. The Board authorized the TALF 
pursuant to the then-current provisions of section 13(3) of the Federal 
Reserve Act.\5\ All TALF loans were extended by the Federal Reserve 
Bank of New York (``FRBNY'').\6\
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    \5\ Former 12 U.S.C. 343.
    \6\ The U.S. Treasury Department--under the Troubled Assets 
Relief Program (TARP) of the Emergency Economic Stabilization Act of 
2008--provided $20 billion of credit protection to the FRBNY in 
connection with the TALF. See https://www.federalreserve.gov/monetarypolicy/talf.htm.
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    On December 9, 2009, the Board adopted an amendment to Regulation A 
to provide a process by which the FRBNY could determine the eligibility 
of credit rating agencies and the ratings

[[Page 57887]]

they issue for use in the TALF, for which the Board had expressly set a 
particular credit rating requirement for collateral offered by the 
borrower.\7\ The purpose of the amendment was to provide the FRBNY with 
a consistent framework for determining the eligibility of ratings 
issued by individual credit rating agencies when used in conjunction 
with a separate asset-level risk assessment process. Pursuant to this 
process, FRBNY determined that ratings from five credit ratings 
agencies became eligible for use in TALF.
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    \7\ 74 FR 65014 (December 9, 2009).
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    On June 30, 2010, the TALF was closed for new loan extensions, and 
the final outstanding TALF loan was repaid in full in October 2014.\8\ 
Accordingly, the Board proposes to delete current section 201.3(d) of 
Regulation A as its provisions are no longer necessary.
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    \8\ https://www.federalreserve.gov/monetarypolicy/talf.htm.
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III. Administrative Law Matters

A. Regulatory Flexibility Act

    Congress enacted the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 
et seq.) to address concerns related to the effects of agency rules on 
small entities and the Board is sensitive to the impact its rules may 
impose on small entities. The RFA requires agencies either to provide 
an initial regulatory flexibility analysis with a proposed rule or to 
certify that the proposed rule will not have a significant economic 
impact on a substantial number of small entities. Under regulations 
issued by the Small Business Administration (SBA), a depository 
institution is a ``small entity'' if it is an institution with assets 
of $550 million or less, determined by averaging the assets reported on 
its four quarterly financial statements for the preceding year. A 
credit rating agency is a ``small entity'' if it is a credit rating 
agency with $15 million or less in assets.
1. Description of Small Entities Affected
    Section 201.51(d) of Regulation A. The proposed amendment to 
section 201.51(d) of Regulation A would affect depository institutions 
that are able to request primary credit from a Federal Reserve Bank and 
that have $550 million or less in assets, determined by averaging the 
assets reported on its four quarterly financial statements for the 
preceding year.\9\ Currently, there are 1,567 depository institutions 
that are able to request primary credit that meet the definition of 
``small'' business entity, out of a total of 2,808 institutions that 
are able to request primary credit.
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    \9\ U.S. Small Business Administration, Table of Small Business 
Size Standards (eff. Oct. 1, 2017) at 28 (NAICS Codes 52110 
(Commercial Banking), 52120 (Savings Institutions), 52130 (Credit 
Unions), and 52190) (Other Depository Credit Intermediation); see 
id. at 41 n. 8 (calculation of asset size).
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    Section 201.3(d) of Regulation A. The proposed amendment to section 
201.3(d) of Regulation A, relates to use of credit ratings for 
borrowers under the TALF program. A small credit rating agency is one 
with $15.0 million or less in assets.\10\
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    \10\ U.S. Small Business Administration, Table of Small Business 
Size Standards (eff. Oct. 1, 2017) at 33 (NAICS Code 561450 (Credit 
Bureaus)).
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2. Economic Impacts on Small Entities
    The Board certifies that the proposed amendments will have no 
economic impacts on any small entities.
    Section 201.51(d) of Regulation A. The proposed amendments to 
section 201.51(d) of Regulation A relate to the establishment of a rate 
for primary credit in a financial emergency. The proposed amendments 
make a ministerial amendment to conform the provision to the current 
operating framework of the FOMC in establishing a target range for the 
federal funds rate. The provision subject to the proposed amendments 
affects the actions of the Federal Reserve Banks and the Board, and 
requires no action or changes in procedures for any depository 
institution, large or small, and so there are no costs associated with 
the proposed amendments. In addition, the proposed amendments clarify 
the operation of the provision for reducing the primary credit rate in 
a financial emergency from its current level to a lower level based on 
the target federal funds rate or the target range for the federal funds 
rate. Any economic impact of the proposed amendment on small entities 
would be beneficial because, if the emergency provision took effect, 
they would be able to obtain primary credit at an interest rate that 
would be lower than the existing primary credit rate. Accordingly, the 
Board believes that a reasonable basis exists for assuming costs would 
be de minimis or insignificant for small entities affected by the 
proposed amendment.
    Section 201.3(d) of Regulation A. The proposed amendments to 
section 201.3(d) of Regulation A relate to deleting obsolete provisions 
applicable to credit extended under the TALF program. Since the TALF 
program no longer exists, the deletion of regulatory provisions 
governing the use of credit ratings in it will have no impact, economic 
or otherwise, on any credit ratings agency. Accordingly, the Board 
believes that a reasonable basis exists for assuming costs would be de 
minimis or insignificant for small entities affected by the proposed 
amendment.

B. Paperwork Reduction Act Analysis

    Office of Management and Budget (OMB) regulations implementing the 
Paperwork Reduction Act (PRA) state that agencies must submit 
``collections of information'' contained in proposed rules published 
for public comment in the Federal Register in accordance with OMB 
regulations. OMB regulations define a ``collection of information'' as 
obtaining, causing to be obtained, soliciting, or requiring the 
disclosure to an agency, third parties or the public of information by 
or for an agency ``by means of identical questions posed to, or 
identical reporting, recordkeeping, or disclosure requirements imposed 
on, ten or more persons, whether such collection of information is 
mandatory, voluntary, or required to obtain or retain a benefit.''
    In accordance with the PRA, the Board reviewed the proposed rule 
under the authority delegated to the Board by OMB.
    Section 201.51(d) of Regulation A. The proposed amendments to 
section 201.51(d) contain no requirements subject to the PRA. 
Specifically, the proposed amendments do not require any change to any 
collection of information related to the primary credit program under 
Regulation A, but apply only to the process by which the Federal 
Reserve Banks and the Board establish the primary credit rate in a 
financial emergency.
    Section 201.3(d) of Regulation A. The proposed amendments to 
section 201.3(d) of Regulation A contain no requirements subject to the 
PRA.

C. Plain Language

    Each Federal banking agency, including the Board, is required to 
use plain language in all proposed and final rulemakings published 
after January 1, 2000. 12 U.S.C. 4809. The Board has sought to present 
the proposed amendments, to the extent possible, in a simple and 
straightforward manner. The Board invites comment on whether there are 
additional steps that could be taken to make the proposed amendments 
easier to understand, such as with respect to the organization of the 
materials or the clarity of the presentation.

List of Subjects in 12 CFR Part 201

    Banks, Banking, Federal Reserve System, Reporting and 
recordkeeping.

[[Page 57888]]

Authority and Issuance

    For the reasons set forth in the preamble, the Board proposes to 
amend 12 CFR Chapter II as follows:

PART 201--EXTENSIONS OF CREDIT BY FEDERAL RESERVE BANKS (REGULATION 
A)

0
1. The authority citation for part 201 continues to read as follows:

    Authority: 12 U.S.C. 248(i)-(j) and (s), 343 et seq., 347a, 
347b, 347c, 348 et seq., 357, 374, 374a, and 461.


Sec.  201.3   [Amended]

0
2. Section 201.3 is amended by removing paragraph (e).

0
3. Section 201.51 is amended by revising paragraph (d)(1) introductory 
text to read as follows:


Sec.  201.51   Interest rates applicable to credit extended by a 
Federal Reserve Bank.

* * * * *
    (d) * * *
    (1) The primary credit rate at a Federal Reserve Bank is the target 
federal funds rate of the Federal Open Market Committee or, if the 
Federal Open Market Committee has set a target range for the federal 
funds rate, the rate corresponding to the top of the target range, if:
* * * * *

    By the Board of Governors of the Federal Reserve System, 
December 1, 2017.
Ann E. Misback,
Secretary of the Board.
[FR Doc. 2017-26465 Filed 12-7-17; 8:45 am]
 BILLING CODE 6210-01-P
57888 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Proposed Rules

Authority and Issuance International-Richards Field Airport. authority described in Subtitle VII, Part
For the reasons set forth in the Controlled airspace is necessary for the A, Subpart I, Section 40103. Under that
preamble, the Board proposes to amend safety and management of instrument section, the FAA is charged with
12 CFR Chapter II as follows: flight rules (IFR) operations at the prescribing regulations to assign the use
airport. This action also would update of airspace necessary to ensure the
PART 201—EXTENSIONS OF CREDIT the geographic coordinates of the safety of aircraft and the efficient use of
BY FEDERAL RESERVE BANKS airport. airspace. This regulation is within the
(REGULATION A) DATES: Comments must be received on scope of that authority as it would
or before January 22, 2018. amend Class E surface airspace and
■ 1. The authority citation for part 201 ADDRESSES: Send comments on this rule Class E airspace extending upward from
continues to read as follows: to: U. S. Department of Transportation, 700 feet above the surface at Massena
Authority: 12 U.S.C. 248(i)–(j) and (s), 343 Docket Operations, 1200 New Jersey International-Richards Field Airport,
et seq., 347a, 347b, 347c, 348 et seq., 357, Avenue SE., West Bldg Ground Floor Massena, NY, to support IFR operations
374, 374a, and 461. Rm W12–140, Washington, DC, 20590; at the airport.
Telephone: 1(800) 647–5527, or (202) SUPPLEMENTARY INFORMATION:
§ 201.3 [Amended]
366–9826.You must identify the Docket Comments Invited
■ 2. Section 201.3 is amended by No. FAA–2017–0953; Airspace Docket
removing paragraph (e). No. 17–AEA–15, at the beginning of Interested persons are invited to
■ 3. Section 201.51 is amended by your comments. You may also submit comment on this rule by submitting
revising paragraph (d)(1) introductory and review received comments through such written data, views, or arguments,
text to read as follows: the Internet at http:// as they may desire. Comments that
www.regulations.gov. You may review provide the factual basis supporting the
§ 201.51 Interest rates applicable to credit views and suggestions presented are
extended by a Federal Reserve Bank.
the public docket containing the
proposal, any comments received, and particularly helpful in developing
* * * * * any final disposition in person in the reasoned regulatory decisions on the
(d) * * * Dockets Office between 9:00 a.m. and proposal. Comments are specifically
(1) The primary credit rate at a 5:00 p.m., Monday through Friday, invited on the overall regulatory,
Federal Reserve Bank is the target except federal holidays. aeronautical, economic, environmental,
federal funds rate of the Federal Open FAA Order 7400.11B, Airspace and energy-related aspects of the
Market Committee or, if the Federal Designations and Reporting Points, and proposal.
Open Market Committee has set a target subsequent amendments can be viewed Communications should identify both
range for the federal funds rate, the rate on line at http://www.faa.gov/air_ docket numbers (FAA Docket No. FAA–
corresponding to the top of the target traffic/publications/. For further 2017–0953; Airspace Docket No. 17–
range, if: information, you can contact the AEA–15) and be submitted in triplicate
* * * * * Airspace Policy Group, Federal Aviation to the Docket Management System (see
By the Board of Governors of the Federal Administration, 800 Independence ADDRESSES section for address and
Reserve System, December 1, 2017. Avenue SW., Washington, DC, 20591; phone number). You may also submit
Ann E. Misback, telephone: (202) 267–8783. The Order is comments through the Internet at http://
Secretary of the Board. also available for inspection at the www.regulations.gov.
[FR Doc. 2017–26465 Filed 12–7–17; 8:45 am] National Archives and Records Persons wishing the FAA to
BILLING CODE 6210–01–P
Administration (NARA). For acknowledge receipt of their comments
information on the availability of FAA on this action must submit with those
Order 7400.11B at NARA, call (202) comments a self-addressed stamped
741–6030, or go to https:// postcard on which the following
DEPARTMENT OF TRANSPORTATION
www.archives.gov/federal-register/cfr/ statement is made: ‘‘Comments to
Federal Aviation Administration ibr-locations.html. Docket No. FAA–2014–0953; Airspace
FAA Order 7400.11, Airspace Docket No. 17–AEA–15.’’ The postcard
14 CFR Part 71 Designations and Reporting Points, is will be date/time stamped and returned
published yearly and effective on to the commenter.
[Docket No. FAA–2017–0953; Airspace September 15. All communications received before
Docket No. 17–AEA–15] FOR FURTHER INFORMATION CONTACT: John the specified closing date for comments
Proposed Amendment of Class E Fornito, Operations Support Group, will be considered before taking action
Airspace; Massena, NY Eastern Service Center, Federal Aviation on the proposed rule. The proposal
Administration, P.O. Box 20636, contained in this notice may be changed
AGENCY: Federal Aviation Atlanta, Georgia 30320; telephone (404) in light of the comments received. A
Administration (FAA), DOT. 305–6364. report summarizing each substantive
ACTION: Notice of proposed rulemaking SUPPLEMENTARY INFORMATION: public contact with FAA personnel
(NPRM). concerned with this rulemaking will be
Authority for This Rulemaking filed in the docket.
SUMMARY: This action proposes to The FAA’s authority to issue rules
sradovich on DSK3GMQ082PROD with PROPOSALS

amend Class E surface airspace and regarding aviation safety is found in Availability of NPRMs
Class E airspace extending upward from Title 49 of the United States Code. An electronic copy of this document
700 feet above the surface at Massena, Subtitle I, Section 106 describes the may be downloaded from and
NY, as the Massena collocated VHF authority of the FAA Administrator. comments submitted through http://
omnidirectional range tactical air Subtitle VII, Aviation Programs, www.regulations.gov. Recently
navigation system (VORTAC) has been describes in more detail the scope of the published rulemaking documents can
decommissioned, requiring airspace agency’s authority. This proposed also be accessed through the FAA’s Web
reconfiguration at Massena rulemaking is promulgated under the page at http://www.faa.gov/

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Document Created: 2017-12-08 01:43:46
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Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Proposed Rules
Action		Notice of proposed rulemaking.
Dates		Comments must be received no later than January 8, 2018.
Contact		Sophia H. Allison, Special Counsel, (202-452-3565), Legal Division, or Lyle Kumasaka, Senior Financial Analyst, 202-452-2382), Division of Monetary Affairs; for users of Telecommunications Device for the Deaf (TDD) only, contact 202/263- 4869; Board of Governors of the Federal Reserve System, 20th and C Streets, NW., Washington, DC 20551.
FR Citation		82 FR 57886
CFR Associated		Banks; Banking; Federal Reserve System and Reporting and Recordkeeping