83 FR 49473 - Regulation D: Reserve Requirements of Depository Institutions
FEDERAL RESERVE SYSTEM Federal Register Volume 83, Issue 191 (October 2, 2018)
Federal Register Volume 83, Issue 191 (October 2, 2018)
| Page Range | 49473-49475 | |
| FR Document | 2018-21435 |
[Federal Register Volume 83, Number 191 (Tuesday, October 2, 2018)] [Rules and Regulations] [Pages 49473-49475] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-21435] ----------------------------------------------------------------------- FEDERAL RESERVE SYSTEM 12 CFR Part 204 [Docket No. R-1624] RIN 7100-AF 18 Regulation D: Reserve Requirements of Depository Institutions AGENCY: Board of Governors of the Federal Reserve System. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: The Board of Governors of the Federal Reserve System (``Board'') is amending Regulation D (Reserve Requirements of Depository Institutions) to revise the rate of interest paid on balances maintained to satisfy reserve balance requirements (``IORR'') and the rate of interest paid on excess balances (``IOER'') maintained at Federal Reserve Banks by or on behalf of eligible institutions. The final amendments specify that IORR is 2.20 percent and IOER is 2.20 percent, a 0.25 percentage point increase from their prior levels. The amendments are intended to enhance the role of such rates of interest in moving the Federal funds rate into the target range established by the Federal Open Market Committee (``FOMC'' or ``Committee''). DATES: Effective date: The amendments to part 204 (Regulation D) are effective October 2, 2018. Applicability date: The IORR and IOER rate changes were applicable on September 27, 2018. FOR FURTHER INFORMATION CONTACT: Sophia Allison, Senior Special Counsel [[Page 49474]] (202-452-3565), Legal Division, or Kristen Payne, Senior Financial Institution & Policy Analyst (202-452-2872), or Mary-Frances Styczynski, Section Chief (202-452-3303), 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: I. Statutory and Regulatory Background For monetary policy purposes, section 19 of the Federal Reserve Act (``the Act'') imposes reserve requirements on certain types of deposits and other liabilities of depository institutions.\1\ Regulation D, which implements section 19 of the Act, requires that a depository institution meet reserve requirements by holding cash in its vault, or if vault cash is insufficient, by maintaining a balance in an account at a Federal Reserve Bank (``Reserve Bank'').\2\ Section 19 also provides that balances maintained by or on behalf of certain institutions in an account at a Reserve Bank may receive earnings to be paid by the Reserve Bank at least once each quarter, at a rate or rates not to exceed the general level of short-term interest rates.\3\ Institutions that are eligible to receive earnings on their balances held at Reserve Banks (``eligible institutions'') include depository institutions and certain other institutions.\4\ Section 19 also provides that the Board may prescribe regulations concerning the payment of earnings on balances at a Reserve Bank.\5\ Prior to these amendments, Regulation D specified a rate of 1.95 percent for both IORR and IOER.\6\ --------------------------------------------------------------------------- \1\ 12 U.S.C. 461(b). \2\ 12 CFR 204.5(a)(1). \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 12 CFR 204.2(y). \5\ See 12 U.S.C. 461(b)(12)(B). \6\ See 12 CFR 204.10(b)(5). --------------------------------------------------------------------------- II. Amendments to IORR and IOER The Board is amending Sec. 204.10(b)(5) of Regulation D to specify that IORR is 2.20 percent and IOER is 2.20 percent. This 0.25 percentage point increase in the IORR and IOER was associated with an increase in the target range for the federal funds rate, from a target range of 1\3/4\ to 2 percent to a target range of 2 to 2\1/4\ percent, announced by the FOMC on September 26, 2018, with an effective date of September 27, 2018. The FOMC's press release on the same day as the announcement noted that: Information received since the Federal Open Market Committee met in August indicates that the labor market has continued to strengthen and that economic activity has been rising at a strong rate. Job gains have been strong, on average, in recent months, and the unemployment rate has stayed low. Household spending and business fixed investment have grown strongly. On a 12-month basis, both overall inflation and inflation for items other than food and energy remain near 2 percent. Indicators of longer-term inflation expectations are little changed, on balance. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective over the medium term. Risks to the economic outlook appear roughly balanced. In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 2 to 2\1/4\ percent. A Federal Reserve Implementation note released simultaneously with the announcement stated that the Board ``voted unanimously to raise the interest rate paid on required and excess reserve balances to 2.20 percent, effective September 27, 2018.'' As a result, the Board is amending Sec. 204.10(b)(5) of Regulation D to change IORR to 2.20 percent and IOER to 2.20 percent. III. Administrative Procedure Act In general, the Administrative Procedure Act (``APA'') \7\ 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.'' \8\ 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.\9\ --------------------------------------------------------------------------- \7\ 5 U.S.C. 551 et seq. \8\ 5 U.S.C. 553(b)(3)(A). \9\ 5 U.S.C. 553(d). --------------------------------------------------------------------------- The Board has determined that good cause exists for finding that the notice, public comment, and delayed effective date provisions of the APA are unnecessary, impracticable, or contrary to the public interest with respect to these final amendments to Regulation D. The rate increases for IORR and IOER that are reflected in the final amendments to Regulation D were made with a view towards accommodating commerce and business and with regard to their bearing upon the general credit situation of the country. Notice and public comment would prevent the Board's action from being effective as promptly as necessary in the public interest and would not otherwise serve any useful purpose. Notice, public comment, and a delayed effective date would create uncertainty about the finality and effectiveness of the Board's action and undermine the effectiveness of that action. Accordingly, the Board has determined that good cause exists to dispense with the notice, public comment, and delayed effective date procedures of the APA with respect to these final amendments to Regulation D. IV. Regulatory Flexibility Analysis The Regulatory Flexibility Act (``RFA'') does not apply to a rulemaking where a general notice of proposed rulemaking is not required.\10\ As noted previously, 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. --------------------------------------------------------------------------- \10\ 5 U.S.C. 603, 604. --------------------------------------------------------------------------- V. Paperwork Reduction Act In accordance with the Paperwork Reduction Act (``PRA'') of 1995,\11\ 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. --------------------------------------------------------------------------- \11\ 44 U.S.C. 3506; see 5 CFR part 1320, appendix A.1. --------------------------------------------------------------------------- List of Subjects in 12 CFR Part 204 Banks, Banking, Reporting and recordkeeping requirements. For the reasons set forth in the preamble, the Board amends 12 CFR part 204 as follows: PART 204--RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS (REGULATION D) 0 1. The authority citation for part 204 continues to read as follows: [[Page 49475]] Authority: 12 U.S.C. 248(a), 248(c), 461, 601, 611, and 3105. 0 2. Section 204.10 is amended by revising paragraph (b)(5) to read as follows: Sec. 204.10 Payment of interest on balances. * * * * * (b) * * * (5) The rates for IORR and IOER are: ------------------------------------------------------------------------ Rate (percent) ------------------------------------------------------------------------ IORR........................................................ 2.20 IOER........................................................ 2.20 ------------------------------------------------------------------------ * * * * * By order of the Board of Governors of the Federal Reserve System, September 27, 2018. Ann Misback, Secretary of the Board. [FR Doc. 2018-21435 Filed 10-1-18; 8:45 am] BILLING CODE 6210-01-P
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secondary credit. The amendments to would be unnecessary and contrary to § 201.51 Interest rates applicable to credit
Regulation A reflect these rate changes. the public interest because delay in extended by a Federal Reserve Bank.3
The 1⁄4 percentage point increase in implementation of changes to the rates (a) Primary credit. The interest rate at
the primary credit rate was associated charged on primary credit and each Federal Reserve Bank for primary
with an increase in the target range for secondary credit would permit insured credit provided to depository
the federal funds rate (from a target depository institutions to profit institutions under § 201.4(a) is 2.75
range of 13⁄4 to 2 percent to a target improperly from the difference in the percent.
range of 2 to 21⁄4 percent) announced by current rate and the announced (b) Secondary credit. The interest rate
the Federal Open Market Committee on increased rate. Finally, because delay at each Federal Reserve Bank for
September 26, 2018, as described in the would undermine the Board’s action in secondary credit provided to depository
Board’s amendment of its Regulation D responding to economic data and institutions under § 201.4(b) is 3.25
regulations published elsewhere in this conditions, the Board has determined percent.
issue of the Federal Register. that ‘‘good cause’’ exists within the * * * * *
Administrative Procedure Act meaning of the APA to dispense with
By order of the Board of Governors of the
the notice, public comment, and Federal Reserve System, September 27, 2018.
In general, the Administrative delayed effective date procedures of the
Procedure Act (‘‘APA’’) 1 imposes three Ann Misback,
APA with respect to the final
principal requirements when an agency amendments to Regulation A. Secretary of the Board.
promulgates legislative rules (rules [FR Doc. 2018–21436 Filed 10–1–18; 8:45 am]
made pursuant to congressionally Regulatory Flexibility Analysis BILLING CODE 6210–01–P
delegated authority): (1) Publication The Regulatory Flexibility Act
with adequate notice of a proposed rule; (‘‘RFA’’) does not apply to a rulemaking
(2) followed by a meaningful where a general notice of proposed FEDERAL RESERVE SYSTEM
opportunity for the public to comment rulemaking is not required.5 As noted
on the rule’s content; and (3) 12 CFR Part 204
previously, a general notice of proposed
publication of the final rule not less rulemaking is not required if the final [Docket No. R–1624]
than 30 days before its effective date. rule involves a matter relating to loans.
The APA provides that notice and RIN 7100–AF 18
Furthermore, the Board has determined
comment procedures do not apply if the that it is unnecessary and contrary to Regulation D: Reserve Requirements
agency for good cause finds them to be the public interest to publish a general of Depository Institutions
‘‘unnecessary, impracticable, or contrary notice of proposed rulemaking for this
to the public interest.’’ 2 Section 553(d) final rule. Accordingly, the RFA’s AGENCY: Board of Governors of the
of the APA also provides that requirements relating to an initial and Federal Reserve System.
publication at least 30 days prior to a final regulatory flexibility analysis do ACTION: Final rule.
rule’s effective date is not required for not apply.
(1) a substantive rule which grants or SUMMARY: The Board of Governors of the
recognizes an exemption or relieves a Paperwork Reduction Act Federal Reserve System (‘‘Board’’) is
restriction; (2) interpretive rules and In accordance with the Paperwork amending Regulation D (Reserve
statements of policy; or (3) a rule for Reduction Act (‘‘PRA’’) of 1995,6 the Requirements of Depository Institutions)
which the agency finds good cause for Board reviewed the final rule under the to revise the rate of interest paid on
shortened notice and publishes its authority delegated to the Board by the balances maintained to satisfy reserve
reasoning with the rule.3 The APA Office of Management and Budget. The balance requirements (‘‘IORR’’) and the
further provides that the notice, public final rule contains no requirements rate of interest paid on excess balances
comment, and delayed effective date subject to the PRA. (‘‘IOER’’) maintained at Federal Reserve
requirements of 5 U.S.C. 553 do not Banks by or on behalf of eligible
apply ‘‘to the extent that there is List of Subjects in 12 CFR Part 201 institutions. The final amendments
involved . . . a matter relating to agency Banks, Banking, Federal Reserve specify that IORR is 2.20 percent and
management or personnel or to public System, Reporting and recordkeeping. IOER is 2.20 percent, a 0.25 percentage
property, loans, grants, benefits, or point increase from their prior levels.
contracts.’’ 4 Authority and Issuance The amendments are intended to
Regulation A establishes the interest For the reasons set forth in the enhance the role of such rates of interest
rates that the twelve Reserve Banks preamble, the Board is amending 12 in moving the Federal funds rate into
charge for extensions of primary credit CFR part 201 to read as follows: the target range established by the
and secondary credit. The Board has Federal Open Market Committee
determined that the notice, public PART 201—EXTENSIONS OF CREDIT (‘‘FOMC’’ or ‘‘Committee’’).
comment, and delayed effective date BY FEDERAL RESERVE BANKS DATES: Effective date: The amendments
requirements of the APA do not apply (REGULATION A) to part 204 (Regulation D) are effective
to these final amendments to Regulation October 2, 2018.
A for several reasons. The amendments ■ 1. The authority citation for part 201
continues to read as follows: Applicability date: The IORR and
involve a matter relating to loans and IOER rate changes were applicable on
are therefore exempt under the terms of Authority: 12 U.S.C. 248(i)–(j) and (s), 343 September 27, 2018.
the APA. In addition, the Board has et seq., 347a, 347b, 347c, 348 et seq., 357,
374, 374a, and 461. FOR FURTHER INFORMATION CONTACT:
amozie on DSK3GDR082PROD with RULES
determined that notice, public
Sophia Allison, Senior Special Counsel
comment, and delayed effective date ■ 2. In § 201.51, paragraphs (a) and (b)
are revised to read as follows: 3 The primary, secondary, and seasonal credit
15 U.S.C. 551 et seq. rates described in this section apply to both
25 U.S.C. 553(b)(3)(A). 55 U.S.C. 603, 604. advances and discounts made under the primary,
3 5 U.S.C. 553(d). 6 44 U.S.C. 3506; see 5 CFR part 1320, appendix secondary, and seasonal credit programs,
4 5 U.S.C. 553(a)(2) (emphasis added). A.1. respectively.
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Authority: 12 U.S.C. 248(a), 248(c), 461, airplanes, and that the AFM may have Standards Branch, FAA, 2200 South
601, 611, and 3105. been erroneously revised on certain 216th St., Des Moines, WA 98351;
■ 2. Section 204.10 is amended by airplanes not equipped with a BUSS telephone and fax 206–231–3223.
revising paragraph (b)(5) to read as function. We are issuing this AD to SUPPLEMENTARY INFORMATION:
follows: address the unsafe condition on these
products. Discussion
§ 204.10 Payment of interest on balances. DATES: This AD is effective October 17, We issued AD 2018–02–18,
* * * * * 2018. Amendment 39–19171 (83 FR 5182,
(b) * * * We must receive comments on this February 6, 2018) (‘‘AD 2018–02–18’’),
(5) The rates for IORR and IOER are: AD by November 16, 2018. which applied to certain Airbus SAS
Model A318, A319, and A320 series
ADDRESSES: You may send comments,
Rate airplanes and Model A321–111, –112,
(percent)
using the procedures found in 14 CFR
–131, –211, –212, –213, –231, and –232
11.43 and 11.45, by any of the following
airplanes. AD 2018–02–18 was
IORR ........................................... 2.20 methods: prompted by a determination that when
IOER ........................................... 2.20 • Federal eRulemaking Portal: Go to
http://www.regulations.gov. Follow the two AoA sensors are adversely affected
instructions for submitting comments. by icing conditions at the same time,
* * * * *
• Fax: 202–493–2251. data displayed on the BUSS could be
By order of the Board of Governors of the erroneous. AD 2018–02–18 required
Federal Reserve System, September 27, 2018. • Mail: U.S. Department of
Transportation, Docket Operations, revising the AFM to provide guidance to
Ann Misback, the flightcrew for emergency procedures
M–30, West Building Ground Floor,
Secretary of the Board. when erroneous airspeed indications are
Room W12–140, 1200 New Jersey
[FR Doc. 2018–21435 Filed 10–1–18; 8:45 am] Avenue SE, Washington, DC 20590. displayed on the BUSS. We issued AD
BILLING CODE 6210–01–P • Hand Delivery: U.S. Department of 2018–02–18 to address erroneous
Transportation, Docket Operations, airspeed data displays, which could
M–30, West Building Ground Floor, lead to an increased flightcrew
DEPARTMENT OF TRANSPORTATION Room W12–140, 1200 New Jersey workload, possibly resulting in reduced
Avenue SE, Washington, DC, between 9 control of the airplane.
Federal Aviation Administration a.m. and 5 p.m., Monday through Since we issued AD 2018–02–18, we
Friday, except Federal holidays. have determined that airplanes on
14 CFR Part 39 For service information identified in which Airbus Service Bulletin A320–
this final rule, contact Airbus SAS, 34–1543 was embodied in service are
[Docket No. FAA–2018–0804; Product
Airworthiness Office—EIAS, Rond- also subject to the unsafe condition, and
Identifier 2018–NM–129–AD; Amendment
39–19442; AD 2018–20–08] Point Emile Dewoitine No: 2, 31700 that the AFM may have been
Blagnac Cedex, France; telephone +33 5 erroneously revised on certain airplanes
RIN 2120–AA64 61 93 36 96; fax +33 5 61 93 44 51; email not equipped with a BUSS function.
account.airworth-eas@airbus.com; The European Aviation Safety Agency
Airworthiness Directives; Airbus SAS (EASA), which is the Technical Agent
Airplanes internet http://www.airbus.com. You
may view this referenced service for the Member States of the European
AGENCY: Federal Aviation information at the FAA, Transport Union, has issued EASA AD 2018–0189,
Administration (FAA), Department of Standards Branch, 2200 South 216th St., dated August 30, 2018 (referred to after
Transportation (DOT). Des Moines, WA. For information on the this as the Mandatory Continuing
availability of this material at the FAA, Airworthiness Information, or ‘‘the
ACTION: Final rule; request for
call 206–231–3195. It is also available MCAI’’), to correct an unsafe condition
comments.
on the internet at http:// for all Airbus SAS Model A318, A319,
SUMMARY: We are superseding www.regulations.gov by searching for and A320 series airplanes and Model
Airworthiness Directive (AD) 2018–02– and locating Docket No. FAA–2018– A321–111, –112, –131, –211, –212,
18, which applied to certain Airbus SAS 0804. –213, –231, and –232 airplanes. The
Model A318, A319, and A320 series MCAI states:
Examining the AD Docket
airplanes and Model A321–111, –112, In extreme icing conditions, pitot probes
–131, –211, –212, –213, –231, and –232 You may examine the AD docket on may induce erroneous airspeed indications.
airplanes. AD 2018–02–18 required the internet at http:// To provide flight crews with reliable
revising the airplane flight manual www.regulations.gov by searching for information on airspeed, Airbus developed a
(AFM) to provide guidance to the and locating Docket No. FAA–2018– Back-up Speed Scale (BUSS and reversible
0804; or in person at the Docket BUSS, based on angle of attack (AoA) value)
flightcrew for certain emergency displayed on the Primary Flight Display
procedures. This new AD requires Management Facility between 9 a.m.
(PFD), together with a PFD Back-Up Altitude
revising the AFM, and for certain and 5 p.m., Monday through Friday, Scale based on Global Positioning System
airplanes, removing a certain AFM except Federal holidays. The AD docket (GPS) altitude. This BUSS function is
revision. This AD also adds airplanes to contains this AD, the regulatory intended to be used below flight level (FL)
the applicability. This AD was evaluation, any comments received, and 250 only. Following new investigation
prompted by a determination that, when other information. The street address for related to AoA probes blockages, it was
two angle of attack (AoA) sensors are the Docket Operations office (telephone identified that, when two AoA sensors are
amozie on DSK3GDR082PROD with RULES
adversely affected by icing conditions at 800–647–5527) is in the ADDRESSES adversely affected by icing conditions at the
section. Comments will be available in same time, data displayed on the BUSS could
the same time, data displayed on the be erroneous.
back up speed scale (BUSS) could be the AD docket shortly after receipt.
This condition, if not corrected, could lead
erroneous. This AD was also prompted FOR FURTHER INFORMATION CONTACT: to an increased flight crew workload,
by a determination that the AFM needs Sanjay Ralhan, Aerospace Engineer, possibly resulting in reduced control of the
to be revised for certain additional International Section, Transport aeroplane.
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Document Created: 2018-10-02 01:19:43
Document Modified: 2018-10-02 01:19:43
| 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 204 (Regulation D) are effective October 2, 2018. | |
| Contact | Sophia Allison, Senior Special Counsel (202-452-3565), Legal Division, or Kristen Payne, Senior Financial Institution & Policy Analyst (202-452-2872), or Mary-Frances Styczynski, Section Chief (202-452-3303), 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 | 83 FR 49473 | |
| CFR Associated | Banks; Banking and Reporting and Recordkeeping Requirements |
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