82 FR 7635 - Regulation A: Extensions of Credit by Federal Reserve Banks

FEDERAL RESERVE SYSTEM

Federal Register Volume 82, Issue 13 (January 23, 2017)

Page Range		7635-7636
FR Document		2017-00612

The Board of Governors of the Federal Reserve System (``Board'') has adopted final amendments to its Regulation A to reflect the Board's approval of an increase in the rate for primary credit at each Federal Reserve Bank. The secondary credit rate at each Reserve Bank automatically increased by formula as a result of the Board's primary credit rate action.

Federal Register, Volume 82 Issue 13 (Monday, January 23, 2017)

[Federal Register Volume 82, Number 13 (Monday, January 23, 2017)]
[Rules and Regulations]
[Pages 7635-7636]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-00612]


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FEDERAL RESERVE SYSTEM

12 CFR Part 201

[Docket No. R-1558]
RIN 7100 AE-66


Regulation A: Extensions of Credit by Federal Reserve Banks

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Final rule.

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SUMMARY: The Board of Governors of the Federal Reserve System 
(``Board'') has adopted final amendments to its Regulation A to reflect 
the Board's approval of an increase in the rate for primary credit at 
each Federal Reserve Bank. The secondary credit rate at each Reserve 
Bank automatically increased by formula as a result of the Board's 
primary credit rate action.

DATES: The amendments to part 201 (Regulation A) are effective January 
23, 2017. The rate changes for primary and secondary credit were 
effective as determined by the Board in its December 14, 2016 
announcement.

FOR FURTHER INFORMATION CONTACT: Clinton Chen, Attorney (202-452-3952), 
or Sophia Allison, Special Counsel, (202-452-3565), Legal Division, or 
Lyle Kumasaka, Senior Financial Analyst (202-452-2382); 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 and 
secondary credit available to depository institutions as a backup 
source of funding on a short-term basis, usually overnight. The primary 
and secondary credit rates are the interest rates that the twelve 
Federal Reserve Banks charge for extensions of credit under these 
programs. In accordance with the Federal Reserve Act, the primary and 
secondary credit rates are established by the boards of directors of 
the Federal Reserve Banks, subject to the review and determination of 
the Board.
    The Board voted to approve a \1/4\ percentage point increase in the 
primary credit rate in effect at each of the twelve Federal Reserve 
Banks, thereby increasing from 1.00 percent to 1.25 percent the rate 
that each Reserve Bank charges for extensions of primary credit. In 
addition, the Board had previously approved to renew the formula for 
the secondary credit rate, the primary credit rate plus 50 basis 
points. Under the formula, the secondary credit rate in effect at each 
of the twelve Federal Reserve Banks increased by \1/4\ percentage point 
as a result of the Board's primary credit rate action, thereby 
increasing from 1.50 percent to 1.75 percent the rate that each Reserve 
Bank charges for extensions of secondary credit. The amendments to 
Regulation A reflect these rate changes.
    The rate changes for primary and secondary credit were effective as 
determined by the Board in its December 14, 2016 announcement.\1\
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    \1\ Federal Reserve Implementation Note, ``Decisions Regarding 
Monetary Policy Implementation'' (Dec. 14, 2016), https://www.federalreserve.gov/newsevents/press/monetary/20161214a1.htm.
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    The \1/4\ percentage point increase in the primary credit rate was 
associated with an increase in the target range for the federal funds 
rate (from a target range of \1/4\ to \1/2\ percent to a target range 
of \1/2\ to \3/4\ percent) announced by the Federal Open Market 
Committee (``Committee'') on December 14, 2016, as described in the 
Board's amendment of its Regulation D published elsewhere in today's 
Federal Register.
    The presentation of the interest rates for primary and secondary 
credit has been changed in the Code of Federal Regulations to improve 
clarity.

Administrative Procedure Act

    In general, the Administrative Procedure Act (12 U.S.C. 551 et 
seq.) (``APA'') imposes three principal requirements when an agency 
promulgates legislative rules (rules made pursuant to congressionally 
delegated authority): (1) Publication with adequate notice of a 
proposed rule; (2) followed by a meaningful opportunity for the public 
to comment on the rule's content; and (3) publication of the final rule 
not less than 30 days before its effective date. The APA provides that 
notice and comment procedures do not apply if the agency for good cause 
finds them to be ``unnecessary, impracticable, or contrary to the 
public interest.'' 12 U.S.C. 553(b)(3)(A). Section 553(d) of the APA 
also provides that publication not less than 30 days prior to a rule's 
effective date is not required for (1) a substantive rule which grants 
or recognizes an exemption or relieves a restriction; (2) interpretive 
rules and statements of policy; or (3) an agency finding good cause for 
shortened notice and publishing its reasoning with the rule. 12 U.S.C. 
553(d). The APA further provides that the notice, public comment, and 
delayed effective date requirements of 5 U.S.C. 553 do not apply ``to 
the extent that there is involved . . . a matter relating to agency 
management or personnel or to public property, loans, grants, benefits, 
or contracts.'' 5 U.S.C. 553(a)(2) (emphasis added).
    Regulation A establishes the interest rates that the twelve Reserve 
Banks charge for extensions of primary credit and secondary credit. 
Accordingly, the Board has determined that the notice, public comment, 
and delayed effective date requirements of 5 U.S.C. 553 do not apply to 
the final amendments to Regulation A because the amendments involve a 
matter relating to loans. In addition, the Board has determined that, 
were the APA's requirements for notice, public comment, and delayed 
effective date to apply to the final amendments to Regulation A, those 
requirements would be unnecessary and contrary to the public interest. 
Delay in implementation of changes to the rates charged on primary 
credit and secondary credit would permit insured depository 
institutions to profit improperly from the difference in the current 
rate and the announced increased rate. Delay would also undermine the 
Board's action in

[[Page 7636]]

responding to economic data and conditions. For these reasons, the 
Board has determined that ``good cause'' within the meaning of the APA 
exists to dispense with the notice, public comment, and delayed 
effective date procedures of the APA with respect to the final 
amendments to Regulation A.

Regulatory Flexibility Analysis

    The Regulatory Flexibility Act (``RFA'') does not apply to a 
rulemaking where a general notice of proposed rulemaking is not 
required.\2\ As noted previously, a general notice of proposed 
rulemaking is not required if the final rule involves a matter relating 
to loans. Furthermore, the Board has determined that it is unnecessary 
and contrary to the public interest to publish a general notice of 
proposed rulemaking for this final rule. Accordingly, the RFA's 
requirements relating to an initial and final regulatory flexibility 
analysis do not apply.
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    \2\ 5 U.S.C. 603 and 604.
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Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act (``PRA'') of 1995 
(44 U.S.C. 3506; 5 CFR part 1320 Appendix A.1), the Board reviewed the 
final rule under the authority delegated to the Board by the Office of 
Management and Budget. The final rule contains no requirements subject 
to the PRA.

List of Subjects in 12 CFR Part 201

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

Authority and Issuance

    For the reasons set forth in the preamble, the Board is amending 12 
CFR Chapter II to read as follows:

12 CFR CHAPTER II

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), 343 et seq., 347a, 347b, 347c, 
348 et seq., 357, 374, 374a, and 461.


0
2. In Sec.  201.51, paragraphs (a) and (b) are revised to read as 
follows:


Sec.  201.51  Interest rates applicable to credit extended by a Federal 
Reserve Bank.\3\
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    \3\ The primary, secondary, and seasonal credit rates described 
in this section apply to both advances and discounts made under the 
primary, secondary, and seasonal credit programs, respectively.
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    (a) Primary credit. The interest rate at each Federal Reserve Bank 
for primary credit provided to depository institutions under Sec.  
201.4(a) is 1.25 percent.
    (b) Secondary credit. The interest rate at each Federal Reserve 
Bank for secondary credit provided to depository institutions under 
Sec.  201.4(b) is 1.75 percent.
* * * * *

    By order of the Board of Governors of the Federal Reserve 
System, January 9, 2017.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2017-00612 Filed 1-19-17; 8:45 am]
 BILLING CODE 6210-01-P

Federal Register / Vol. 82, No. 13 / Monday, January 23, 2017 / Rules and Regulations 7635

(4) Requests for a waiver or reduction FOR FURTHER INFORMATION CONTACT: The presentation of the interest rates
of fees should ordinarily be made when Clinton Chen, Attorney (202–452–3952), for primary and secondary credit has
the request is first submitted to the or Sophia Allison, Special Counsel, been changed in the Code of Federal
agency and should address the criteria (202–452–3565), Legal Division, or Lyle Regulations to improve clarity.
referenced above. A requester may Kumasaka, Senior Financial Analyst
Administrative Procedure Act
submit a fee waiver request at a later (202–452–2382); for users of
time so long as the underlying record Telecommunications Device for the Deaf In general, the Administrative
request is pending or on administrative (TDD) only, contact 202–263–4869; Procedure Act (12 U.S.C. 551 et seq.)
appeal. When a requester who has Board of Governors of the Federal (‘‘APA’’) imposes three principal
committed to pay fees subsequently asks Reserve System, 20th and C Streets requirements when an agency
for a waiver of those fees and that NW., Washington, DC 20551. promulgates legislative rules (rules
waiver is denied, the requester must pay SUPPLEMENTARY INFORMATION: The
made pursuant to congressionally
any costs incurred up to the date the fee Federal Reserve Banks make primary delegated authority): (1) Publication
waiver request was received. with adequate notice of a proposed rule;
and secondary credit available to
(2) followed by a meaningful
■ 9. Amend § 304.10 by revising depository institutions as a backup
opportunity for the public to comment
paragraph (a) to read as follows: source of funding on a short-term basis,
on the rule’s content; and (3)
usually overnight. The primary and
§ 304.10 Preservation of records. publication of the final rule not less
secondary credit rates are the interest
(a) The agency will preserve all than 30 days before its effective date.
rates that the twelve Federal Reserve
correspondence pertaining to the The APA provides that notice and
Banks charge for extensions of credit
requests that it receives under this comment procedures do not apply if the
under these programs. In accordance
subpart, as well as copies of all agency for good cause finds them to be
with the Federal Reserve Act, the
requested records, until disposition or ‘‘unnecessary, impracticable, or contrary
primary and secondary credit rates are to the public interest.’’ 12 U.S.C.
destruction is authorized by title 44 of established by the boards of directors of
the United States Code or the National 553(b)(3)(A). Section 553(d) of the APA
the Federal Reserve Banks, subject to also provides that publication not less
Archives and Records Administration’s the review and determination of the
General Records Schedule 4.2. Records than 30 days prior to a rule’s effective
Board. date is not required for (1) a substantive
will not be disposed of while they are The Board voted to approve a 1⁄4
the subject of a pending request, appeal, rule which grants or recognizes an
percentage point increase in the primary exemption or relieves a restriction; (2)
or lawsuit under the FOIA. credit rate in effect at each of the twelve interpretive rules and statements of
* * * * * Federal Reserve Banks, thereby policy; or (3) an agency finding good
Dated: January 11, 2017. increasing from 1.00 percent to 1.25 cause for shortened notice and
percent the rate that each Reserve Bank publishing its reasoning with the rule.
David M. Pritzker,
charges for extensions of primary credit. 12 U.S.C. 553(d). The APA further
Deputy General Counsel.
In addition, the Board had previously provides that the notice, public
[FR Doc. 2017–00891 Filed 1–19–17; 8:45 am] approved to renew the formula for the comment, and delayed effective date
BILLING CODE 6110–01–P secondary credit rate, the primary credit requirements of 5 U.S.C. 553 do not
rate plus 50 basis points. Under the apply ‘‘to the extent that there is
formula, the secondary credit rate in involved . . . a matter relating to agency
FEDERAL RESERVE SYSTEM effect at each of the twelve Federal management or personnel or to public
Reserve Banks increased by 1⁄4 property, loans, grants, benefits, or
12 CFR Part 201 percentage point as a result of the contracts.’’ 5 U.S.C. 553(a)(2) (emphasis
[Docket No. R–1558] Board’s primary credit rate action, added).
thereby increasing from 1.50 percent to Regulation A establishes the interest
RIN 7100 AE–66
1.75 percent the rate that each Reserve rates that the twelve Reserve Banks
Regulation A: Extensions of Credit by Bank charges for extensions of charge for extensions of primary credit
Federal Reserve Banks secondary credit. The amendments to and secondary credit. Accordingly, the
Regulation A reflect these rate changes. Board has determined that the notice,
AGENCY: Board of Governors of the The rate changes for primary and public comment, and delayed effective
Federal Reserve System. secondary credit were effective as date requirements of 5 U.S.C. 553 do not
ACTION: Final rule. determined by the Board in its apply to the final amendments to
December 14, 2016 announcement.1 Regulation A because the amendments
SUMMARY: The Board of Governors of the The 1⁄4 percentage point increase in involve a matter relating to loans. In
Federal Reserve System (‘‘Board’’) has the primary credit rate was associated addition, the Board has determined that,
adopted final amendments to its with an increase in the target range for were the APA’s requirements for notice,
Regulation A to reflect the Board’s the federal funds rate (from a target public comment, and delayed effective
approval of an increase in the rate for range of 1⁄4 to 1⁄2 percent to a target date to apply to the final amendments
primary credit at each Federal Reserve range of 1⁄2 to 3⁄4 percent) announced by to Regulation A, those requirements
Bank. The secondary credit rate at each the Federal Open Market Committee would be unnecessary and contrary to
Reserve Bank automatically increased (‘‘Committee’’) on December 14, 2016, the public interest. Delay in
by formula as a result of the Board’s as described in the Board’s amendment implementation of changes to the rates
mstockstill on DSK3G9T082PROD with RULES

primary credit rate action. of its Regulation D published elsewhere charged on primary credit and
DATES: The amendments to part 201 in today’s Federal Register. secondary credit would permit insured
(Regulation A) are effective January 23, depository institutions to profit
1 Federal Reserve Implementation Note,
2017. The rate changes for primary and improperly from the difference in the
‘‘Decisions Regarding Monetary Policy
secondary credit were effective as Implementation’’ (Dec. 14, 2016), https://
current rate and the announced
determined by the Board in its www.federalreserve.gov/newsevents/press/ increased rate. Delay would also
December 14, 2016 announcement. monetary/20161214a1.htm. undermine the Board’s action in

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7636 Federal Register / Vol. 82, No. 13 / Monday, January 23, 2017 / Rules and Regulations

responding to economic data and institutions under § 201.4(a) is 1.25 SUPPLEMENTARY INFORMATION:
conditions. For these reasons, the Board percent.
(b) Secondary credit. The interest rate I. Statutory and Regulatory Background
has determined that ‘‘good cause’’
within the meaning of the APA exists to at each Federal Reserve Bank for For monetary policy purposes, section
dispense with the notice, public secondary credit provided to depository 19 of the Federal Reserve Act (‘‘the
comment, and delayed effective date institutions under § 201.4(b) is 1.75 Act’’) imposes reserve requirements on
procedures of the APA with respect to percent. certain types of deposits and other
the final amendments to Regulation A. * * * * * liabilities of depository institutions.
By order of the Board of Governors of the
Regulation D, which implements section
Regulatory Flexibility Analysis 19 of the Act, requires that a depository
Federal Reserve System, January 9, 2017.
The Regulatory Flexibility Act institution meet reserve requirements by
Robert deV. Frierson,
(‘‘RFA’’) does not apply to a rulemaking holding cash in its vault, or if vault cash
Secretary of the Board.
where a general notice of proposed is insufficient, by maintaining a balance
rulemaking is not required.2 As noted [FR Doc. 2017–00612 Filed 1–19–17; 8:45 am]
in an account at a Federal Reserve Bank
previously, a general notice of proposed BILLING CODE 6210–01–P
(‘‘Reserve Bank’’).1 Section 19 also
rulemaking is not required if the final provides that balances maintained by or
rule involves a matter relating to loans. on behalf of certain institutions in an
Furthermore, the Board has determined FEDERAL RESERVE SYSTEM
account at a Reserve Bank may receive
that it is unnecessary and contrary to 12 CFR Part 204 earnings to be paid by the Reserve Bank
the public interest to publish a general at least once each quarter, at a rate or
notice of proposed rulemaking for this [Docket No. R–1559] rates not to exceed the general level of
final rule. Accordingly, the RFA’s RIN 7100 AE–67 short-term interest rates. Institutions
requirements relating to an initial and that are eligible to receive earnings on
final regulatory flexibility analysis do Regulation D: Reserve Requirements their balances held at Reserve Banks
not apply. of Depository Institutions (‘‘eligible institutions’’) include
Paperwork Reduction Act AGENCY: Board of Governors of the depository institutions and certain other
Federal Reserve System. institutions.2 Section 19 also provides
In accordance with the Paperwork that the Board may prescribe regulations
Reduction Act (‘‘PRA’’) of 1995 (44 ACTION: Final rule.
concerning the payment of earnings on
U.S.C. 3506; 5 CFR part 1320 Appendix SUMMARY: The Board of Governors of the balances at a Reserve Bank.3 Prior to
A.1), the Board reviewed the final rule Federal Reserve System (‘‘Board’’) is these amendments, Regulation D
under the authority delegated to the amending Regulation D (Reserve specified a rate of 0.50 percent for both
Board by the Office of Management and Requirements of Depository Institutions) IORR and IOER.4
Budget. The final rule contains no to revise the rate of interest paid on
requirements subject to the PRA. II. Amendments to IORR and IOER
balances maintained to satisfy reserve
List of Subjects in 12 CFR Part 201 balance requirements (‘‘IORR’’) and the The Board is amending § 204.10(b)(5)
rate of interest paid on excess balances of Regulation D to specify that IORR is
Banks, banking, Federal Reserve 0.75 percent and IOER is 0.75 percent.
(‘‘IOER’’) maintained at Federal Reserve
System, Reporting and recordkeeping. This 0.25 percentage point increase in
Banks by or on behalf of eligible
Authority and Issuance institutions. The final amendments
1 12 CFR 204.5(a)(1).
For the reasons set forth in the specify that IORR is 0.75 percent and 2 Section 19(b)(1)(A) defines ‘‘depository
preamble, the Board is amending 12 IOER is 0.75 percent, a 0.25 percentage institution’’ as any insured bank as defined in
CFR Chapter II to read as follows: point increase from their prior levels. section 3 of the Federal Deposit Insurance Act or
The amendments are intended to any bank which is eligible to make application to
12 CFR CHAPTER II enhance the role of such rates of interest become an insured bank under section 5 of such
Act; any mutual savings bank as defined in section
in moving the Federal funds rate into
PART 201—EXTENSIONS OF CREDIT 3 of the Federal Deposit Insurance Act or any bank
the target range established by the which is eligible to make application to become an
BY FEDERAL RESERVE BANKS
Federal Open Market Committee insured bank under section 5 of such Act; any
(REGULATION A) savings bank as defined in section 3 of the Federal
(‘‘FOMC’’ or ‘‘Committee’’).
Deposit Insurance Act or any bank which is eligible
■ 1. The authority citation for part 201 DATES: The amendments to part 204 to make application to become an insured bank
continues to read as follows: (Regulation D) are effective January 23, under section 5 of such Act; any insured credit
Authority: 12 U.S.C. 248(i)–(j), 343 et seq., 2017. The IORR and IOER rate changes union as defined in section 101 of the Federal
were applicable on December 15, 2016, Credit Union Act or any credit union which is
347a, 347b, 347c, 348 et seq., 357, 374, 374a, eligible to make application to become an insured
and 461. as specified in 12 CFR 204.10(b)(5), as credit union pursuant to section 201 of such Act;
amended. any member as defined in section 2 of the Federal
■ 2. In § 201.51, paragraphs (a) and (b)
FOR FURTHER INFORMATION CONTACT: Home Loan Bank Act; [and] any savings association
are revised to read as follows: (as defined in section 3 of the Federal Deposit
Clinton Chen, Attorney (202–452–3952), Insurance Act) which is an insured depository
§ 201.51 Interest rates applicable to credit or Sophia Allison, Special Counsel institution (as defined in such Act) or is eligible to
extended by a Federal Reserve Bank.3 (202–452–3198), Legal Division, or apply to become an insured depository institution
(a) Primary credit. The interest rate at Thomas Keating, Financial Analyst under the Federal Deposit Insurance Act. See 12
U.S.C. 461(b)(1)(A). Eligible institution also
each Federal Reserve Bank for primary (202–973–7401), or Laura Lipscomb, includes any trust company, corporation organized
mstockstill on DSK3G9T082PROD with RULES

credit provided to depository Section Chief (202–973–7964), Division under section 25A or having an agreement with the
of Monetary Affairs; for users of Board under section 25, or any branch or agency of
25U.S.C. 603 and 604. Telecommunications Device for the Deaf a foreign bank (as defined in section 1(b) of the
3 The
primary, secondary, and seasonal credit International Banking Act of 1978). 12 U.S.C.
(TDD) only, contact 202–263–4869; 461(b)(12)(C); see 12 CFR 204.2(y) (definition of
rates described in this section apply to both
advances and discounts made under the primary,
Board of Governors of the Federal ‘‘eligible institution’’).
secondary, and seasonal credit programs, Reserve System, 20th and C Streets 3 See 12 U.S.C. 461(b)(12).

respectively. NW., Washington, DC 20551. 4 See 12 CFR 204.10(b)(5).

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Document Created: 2017-01-20 01:29:47
Document Modified: 2017-01-20 01:29:47

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		Rules and Regulations
Action		Final rule.
Dates		The amendments to part 201 (Regulation A) are effective January 23, 2017. The rate changes for primary and secondary credit were effective as determined by the Board in its December 14, 2016 announcement.
Contact		Clinton Chen, Attorney (202-452-3952), or Sophia Allison, Special Counsel, (202-452-3565), Legal Division, or Lyle Kumasaka, Senior Financial Analyst (202-452-2382); 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 7635
RIN Number		7100 AE66
CFR Associated		Banks; Banking; Federal Reserve System and Reporting and Recordkeeping