83 FR 28526 - Regulation A: Extensions of Credit by Federal Reserve Banks

FEDERAL RESERVE SYSTEM

Federal Register Volume 83, Issue 119 (June 20, 2018)

Page Range		28526-28527
FR Document		2018-13270

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 83 Issue 119 (Wednesday, June 20, 2018)

[Federal Register Volume 83, Number 119 (Wednesday, June 20, 2018)]
[Rules and Regulations]
[Pages 28526-28527]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-13270]


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FEDERAL RESERVE SYSTEM

12 CFR Part 201

[Docket No. R-1611]
RIN 7100-AF 07


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: 
    Effective date: The amendments to part 201 (Regulation A) are 
effective June 20, 2018.
    Applicability date: The rate changes for primary and secondary 
credit were applicable on June 14, 2018.

FOR FURTHER INFORMATION CONTACT: Sophia Allison, Special Counsel (202-
452-3565), or Clinton Chen, Senior Attorney (202-452-3952), Legal 
Division, or Lyle Kumasaka, Senior Financial Analyst (202-452-2382), or 
Thomas Keating, Financial Analyst (202-973-7401), Division of Monetary 
Affairs; for the hearing impaired, Telecommunications Device for the 
Deaf (TDD) 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.
    On June 13, 2018, 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 2.25 percent to 
2.50 percent the rate that each Reserve Bank charges for extensions of 
primary credit. In addition, the Board had previously approved the 
renewal of the secondary credit rate formula, 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 2.75 percent to 3.00 percent the rate that each 
Reserve Bank charges for extensions of secondary credit. The amendments 
to Regulation A reflect these rate changes.
    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\1/2\ to 1\3/4\ percent to a target range 
of 1\3/4\ to 2 percent) announced by the Federal Open Market Committee 
on June 13, 2018, as described in the Board's amendment of its 
Regulation D published elsewhere in today's Federal Register.

Administrative Procedure Act

    In general, the Administrative Procedure Act (``APA'') \1\ 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.'' \2\ Section 553(d) 
of the APA also provides that publication at least 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) a rule for which 
the agency finds good cause for shortened notice and publishes its 
reasoning with the rule.\3\ 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.'' \4\
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    \1\ 5 U.S.C. 551 et seq.
    \2\ 5 U.S.C. 553(b)(3)(A).
    \3\ 5 U.S.C. 553(d).
    \4\ 5 U.S.C. 553(a)(2) (emphasis added).
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    Regulation A establishes the interest rates that the twelve Reserve 
Banks charge for extensions of primary credit and secondary credit. The 
Board has determined that the notice, public comment, and delayed 
effective date requirements of the APA do not apply to these final 
amendments to Regulation A for several reasons. The amendments involve 
a matter relating to loans and are therefore exempt under the terms of 
the APA. In addition, the Board has determined that notice, public 
comment, and delayed effective date would be unnecessary and contrary 
to the public interest because delay in implementation of changes to 
the rates

[[Page 28527]]

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. Finally, because delay 
would undermine the Board's action in responding to economic data and 
conditions, the Board has determined that ``good cause'' exists within 
the meaning of the APA 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.\5\ 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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    \5\ 5 U.S.C. 603 and 604.
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Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act (``PRA'') of 
1995,\6\ 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.
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    \6\ 44 U.S.C. 3506; see 5 CFR part 1320 Appendix A.1.
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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 part 201 to read 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.


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.\7\
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    \7\ 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 2.50 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 3.00 percent.
* * * * *

    By order of the Board of Governors of the Federal Reserve 
System, June 15, 2018.
Ann Misback,
Secretary of the Board.
[FR Doc. 2018-13270 Filed 6-19-18; 8:45 am]
BILLING CODE P

28526 Federal Register / Vol. 83, No. 119 / Wednesday, June 20, 2018 / Rules and Regulations

Computation number 1 Computation number 2

Deliveries with less than Deliveries with 95 percent
95 percent kernels or more kernels

Percent of Weight Percent of Weight
sample (pounds) sample (pounds)

11. Adjusted kernel weight (line 6 + line 10) ................................................... ........................ 6,270 ........................ 9,408
1 Only applies to deliveries with less than 95 percent kernels.

(c) Computation adjustments. If Thomas Keating, Financial Analyst Administrative Procedure Act
applicable, adjustments shall be made (202–973–7401), Division of Monetary In general, the Administrative
by rounding such that the sample Affairs; for the hearing impaired, Procedure Act (‘‘APA’’) 1 imposes three
computation percentages total equals Telecommunications Device for the Deaf principal requirements when an agency
100 percent. Rounding adjustments (TDD) 202–263–4869; Board of promulgates legislative rules (rules
shall be made as follows: First adjust the Governors of the Federal Reserve made pursuant to congressionally
foreign material percentage; if there is System, 20th and C Streets NW, delegated authority): (1) Publication
no foreign material in the sample, then Washington, DC 20551. with adequate notice of a proposed rule;
adjust the excess moisture percentage; SUPPLEMENTARY INFORMATION: The (2) followed by a meaningful
or if there is no foreign material or Federal Reserve Banks make primary opportunity for the public to comment
excess moisture in the sample, adjust and secondary credit available to on the rule’s content; and (3)
the inedible kernels percentage. depository institutions as a backup publication of the final rule not less
Dated: June 15, 2018. source of funding on a short-term basis, than 30 days before its effective date.
Bruce Summers, usually overnight. The primary and The APA provides that notice and
Administrator, Agricultural Marketing secondary credit rates are the interest comment procedures do not apply if the
Service. rates that the twelve Federal Reserve agency for good cause finds them to be
[FR Doc. 2018–13272 Filed 6–19–18; 8:45 am] Banks charge for extensions of credit ‘‘unnecessary, impracticable, or contrary
BILLING CODE 3410–02–P
under these programs. In accordance to the public interest.’’ 2 Section 553(d)
with the Federal Reserve Act, the of the APA also provides that
primary and secondary credit rates are publication at least 30 days prior to a
established by the boards of directors of rule’s effective date is not required for
FEDERAL RESERVE SYSTEM (1) a substantive rule which grants or
the Federal Reserve Banks, subject to
12 CFR Part 201 the review and determination of the recognizes an exemption or relieves a
Board. restriction; (2) interpretive rules and
[Docket No. R–1611] On June 13, 2018, the Board voted to statements of policy; or (3) a rule for
approve a 1⁄4 percentage point increase which the agency finds good cause for
RIN 7100–AF 07
in the primary credit rate in effect at shortened notice and publishes its
Regulation A: Extensions of Credit by each of the twelve Federal Reserve reasoning with the rule.3 The APA
Federal Reserve Banks Banks, thereby increasing from 2.25 further provides that the notice, public
percent to 2.50 percent the rate that comment, and delayed effective date
AGENCY: Board of Governors of the each Reserve Bank charges for requirements of 5 U.S.C. 553 do not
Federal Reserve System. extensions of primary credit. In apply ‘‘to the extent that there is
ACTION: Final rule. addition, the Board had previously involved . . . a matter relating to agency
approved the renewal of the secondary management or personnel or to public
SUMMARY: The Board of Governors of the credit rate formula, the primary credit property, loans, grants, benefits, or
Federal Reserve System (‘‘Board’’) has rate plus 50 basis points. Under the contracts.’’ 4
adopted final amendments to its formula, the secondary credit rate in Regulation A establishes the interest
Regulation A to reflect the Board’s effect at each of the twelve Federal rates that the twelve Reserve Banks
approval of an increase in the rate for Reserve Banks increased by 1⁄4 charge for extensions of primary credit
primary credit at each Federal Reserve percentage point as a result of the and secondary credit. The Board has
Bank. The secondary credit rate at each Board’s primary credit rate action, determined that the notice, public
Reserve Bank automatically increased thereby increasing from 2.75 percent to comment, and delayed effective date
by formula as a result of the Board’s 3.00 percent the rate that each Reserve requirements of the APA do not apply
primary credit rate action. Bank charges for extensions of to these final amendments to Regulation
DATES: secondary credit. The amendments to A for several reasons. The amendments
Effective date: The amendments to Regulation A reflect these rate changes. involve a matter relating to loans and
part 201 (Regulation A) are effective The 1⁄4 percentage point increase in are therefore exempt under the terms of
June 20, 2018. the primary credit rate was associated the APA. In addition, the Board has
Applicability date: The rate changes with an increase in the target range for determined that notice, public
for primary and secondary credit were the federal funds rate (from a target comment, and delayed effective date
would be unnecessary and contrary to
sradovich on DSK3GMQ082PROD with RULES

applicable on June 14, 2018. range of 11⁄2 to 13⁄4 percent to a target
the public interest because delay in
FOR FURTHER INFORMATION CONTACT: range of 13⁄4 to 2 percent) announced by
implementation of changes to the rates
Sophia Allison, Special Counsel (202– the Federal Open Market Committee on
452–3565), or Clinton Chen, Senior June 13, 2018, as described in the 15 U.S.C. 551 et seq.
Attorney (202–452–3952), Legal Board’s amendment of its Regulation D 25 U.S.C. 553(b)(3)(A).
Division, or Lyle Kumasaka, Senior published elsewhere in today’s Federal 3 5 U.S.C. 553(d).

Financial Analyst (202–452–2382), or Register. 4 5 U.S.C. 553(a)(2) (emphasis added).

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Federal Register / Vol. 83, No. 119 / Wednesday, June 20, 2018 / Rules and Regulations 28527

charged on primary credit and § 201.51 Interest rates applicable to credit 452–3565), or Clinton Chen, Senior
secondary credit would permit insured extended by a Federal Reserve Bank.7 Attorney (202–452–3952), Legal
depository institutions to profit (a) Primary credit. The interest rate at Division, or Thomas Keating, Financial
improperly from the difference in the each Federal Reserve Bank for primary Analyst (202–973–7401), or Heather
current rate and the announced credit provided to depository Wiggins, Section Chief (202–452–3674),
increased rate. Finally, because delay institutions under § 201.4(a) is 2.50 Division of Monetary Affairs; for the
would undermine the Board’s action in percent. hearing impaired, Telecommunications
responding to economic data and (b) Secondary credit. The interest rate Device for the Deaf (TDD) 202–263–
conditions, the Board has determined at each Federal Reserve Bank for 4869; Board of Governors of the Federal
that ‘‘good cause’’ exists within the secondary credit provided to depository Reserve System, 20th and C Streets NW,
meaning of the APA to dispense with institutions under § 201.4(b) is 3.00 Washington, DC 20551.
the notice, public comment, and percent. SUPPLEMENTARY INFORMATION:
delayed effective date procedures of the * * * * *
I. Statutory and Regulatory Background
APA with respect to the final By order of the Board of Governors of the
amendments to Regulation A. Federal Reserve System, June 15, 2018. For monetary policy purposes, section
Ann Misback, 19 of the Federal Reserve Act (‘‘the
Regulatory Flexibility Analysis Act’’) imposes reserve requirements on
Secretary of the Board.
certain types of deposits and other
The Regulatory Flexibility Act [FR Doc. 2018–13270 Filed 6–19–18; 8:45 am]
liabilities of depository institutions.1
(‘‘RFA’’) does not apply to a rulemaking BILLING CODE P
Regulation D, which implements section
where a general notice of proposed
19 of the Act, requires that a depository
rulemaking is not required.5 As noted
FEDERAL RESERVE SYSTEM institution meet reserve requirements by
previously, a general notice of proposed
holding cash in its vault, or if vault cash
rulemaking is not required if the final
12 CFR Part 204 is insufficient, by maintaining a balance
rule involves a matter relating to loans.
in an account at a Federal Reserve Bank
Furthermore, the Board has determined [Docket No. R–1610]
(‘‘Reserve Bank’’).2 Section 19 also
that it is unnecessary and contrary to
RIN 7100–AF08 provides that balances maintained by or
the public interest to publish a general
on behalf of certain institutions in an
notice of proposed rulemaking for this Regulation D: Reserve Requirements account at a Reserve Bank may receive
final rule. Accordingly, the RFA’s of Depository Institutions earnings to be paid by the Reserve Bank
requirements relating to an initial and
AGENCY: Board of Governors of the at least once each quarter, at a rate or
final regulatory flexibility analysis do
Federal Reserve System. rates not to exceed the general level of
not apply.
ACTION: Final rule.
short-term interest rates.3 Institutions
Paperwork Reduction Act that are eligible to receive earnings on
SUMMARY: The Board of Governors of the their balances held at Reserve Banks
In accordance with the Paperwork Federal Reserve System (‘‘Board’’) is (‘‘eligible institutions’’) include
Reduction Act (‘‘PRA’’) of 1995,6 the amending Regulation D (Reserve depository institutions and certain other
Board reviewed the final rule under the Requirements of Depository Institutions) institutions.4 Section 19 also provides
authority delegated to the Board by the to revise the rate of interest paid on that the Board may prescribe regulations
Office of Management and Budget. The balances maintained to satisfy reserve concerning the payment of earnings on
final rule contains no requirements balance requirements (‘‘IORR’’) and the balances at a Reserve Bank.5 Prior to
subject to the PRA. rate of interest paid on excess balances these amendments, Regulation D
List of Subjects in 12 CFR Part 201 (‘‘IOER’’) maintained at Federal Reserve specified a rate of 1.75 percent for both
Banks by or on behalf of eligible IORR and IOER.6
Banks, Banking, Federal Reserve institutions. The final amendments
II. Amendments to IORR and IOER
System, Reporting and recordkeeping. specify that IORR is 1.95 percent and
IOER is 1.95 percent, a 0.20 percentage The Board is amending § 204.10(b)(5)
Authority and Issuance point increase from their prior levels. of Regulation D to specify that IORR is
The amendments are intended to 1.95 percent and IOER is 1.95 percent.
For the reasons set forth in the This 0.20 percentage point increase in
preamble, the Board is amending 12 enhance the role of such rates of interest
in moving the Federal funds rate into the IORR and IOER was associated with
CFR part 201 to read as follows: an increase in the target range for the
the target range established by the
Federal Open Market Committee federal funds rate, from a target range of
PART 201—EXTENSIONS OF CREDIT
(‘‘FOMC’’ or ‘‘Committee’’). 11⁄2 to 13⁄4 percent to a target range of
BY FEDERAL RESERVE BANKS
DATES: 13⁄4 to 2 percent, announced by the
(REGULATION A)
Effective date: The amendments to FOMC on June 13, 2018, with an
part 204 (Regulation D) are effective effective date of June 14, 2018. The
■ 1. The authority citation for part 201 FOMC’s press release on the same day
continues to read as follows: June 20, 2018.
Applicability date: The IORR and as the announcement noted that:
Authority: 12 U.S.C. 248(i)–(j) and (s), 343 IOER rate changes were applicable on Information received since the Federal
et seq., 347a, 347b, 347c, 348 et seq., 357, June 14, 2018. Open Market Committee met in May
374, 374a, and 461.
sradovich on DSK3GMQ082PROD with RULES

FOR FURTHER INFORMATION CONTACT:
1 12 U.S.C. 461(b).
■ 2. In § 201.51, paragraphs (a) and (b) Sophia Allison, Special Counsel (202–
2 12 CFR 204.5(a)(1).
are revised to read as follows: 7 The primary, secondary, and seasonal credit
3 12 U.S.C. 461(b)(1)(A) & (b)(12)(A).
4 See 12 U.S.C. 461(b)(1)(A) & (b)(12)(C); see also
rates described in this section apply to both
55 U.S.C. 603 and 604. advances and discounts made under the primary, 12 CFR 204.2(y).
6 44 5 See 12 U.S.C. 461(b)(12)(B).
U.S.C. 3506; see 5 CFR part 1320 Appendix secondary, and seasonal credit programs,
A.1. respectively. 6 See 12 CFR 204.10(b)(5).

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Document Created: 2018-06-20 00:19:11
Document Modified: 2018-06-20 00:19:11

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		Effective date: The amendments to part 201 (Regulation A) are effective June 20, 2018.
Contact		Sophia Allison, Special Counsel (202- 452-3565), or Clinton Chen, Senior Attorney (202-452-3952), Legal Division, or Lyle Kumasaka, Senior Financial Analyst (202-452-2382), or Thomas Keating, Financial Analyst (202-973-7401), Division of Monetary Affairs; for the hearing impaired, Telecommunications Device for the Deaf (TDD) 202-263-4869; Board of Governors of the Federal Reserve System, 20th and C Streets NW, Washington, DC 20551.
FR Citation		83 FR 28526
CFR Associated		Banks; Banking; Federal Reserve System and Reporting and Recordkeeping