83 FR 58466 - Federal Reserve Bank Capital Stock
FEDERAL RESERVE SYSTEM Federal Register Volume 83, Issue 224 (November 20, 2018)
Federal Register Volume 83, Issue 224 (November 20, 2018)
| Page Range | 58466-58467 | |
| FR Document | 2018-25266 |
[Federal Register Volume 83, Number 224 (Tuesday, November 20, 2018)] [Rules and Regulations] [Pages 58466-58467] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-25266] ======================================================================= ----------------------------------------------------------------------- FEDERAL RESERVE SYSTEM 12 CFR Part 209 [Regulation I; Docket No. R-1635] RIN 7100-AF27 Federal Reserve Bank Capital Stock AGENCY: Board of Governors of the Federal Reserve System. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: The Board of Governors (Board) is publishing a final rule that applies an inflation adjustment to the threshold for total consolidated assets in Regulation I. Federal Reserve Bank (Reserve Bank) stockholders that have total consolidated assets above the threshold receive a different dividend rate on their Reserve Bank stock than stockholders with total consolidated assets at or below the threshold. The Federal Reserve Act requires that the Board annually adjust the total consolidated asset threshold to reflect the change in the Gross Domestic Product Price Index, published by the Bureau of Economic Analysis (BEA). Based on the change in the Gross Domestic Product Price Index as of September 27, 2018, the total consolidated asset threshold will be $10,518,000,000 through December 31, 2019. DATES: This final rule is effective January 1, 2019. FOR FURTHER INFORMATION CONTACT: Evan Winerman, Senior Counsel (202) 872-7578), Legal Division; or Jamie Noonan, Lead Financial Institutions Policy Analyst (202) 530-6296), Reserve Bank Operations and Payments Systems Division. For users of Telecommunications Device for the Deaf (TDD) only, contact (202) 263-4869. SUPPLEMENTARY INFORMATION: I. Background Regulation I governs the issuance and cancellation of capital stock by the Reserve Banks. Under section 5 of the Federal Reserve Act \1\ and Regulation I,\2\ a member bank must subscribe to capital stock of the Reserve Bank of its district in an amount equal to six percent of the member bank's capital and surplus. The member bank must pay for one-half of this subscription on the date that the Reserve Bank approves its application for capital stock, while the remaining half of the subscription shall be subject to call by the Board.\3\ --------------------------------------------------------------------------- \1\ 12 U.S.C. 287. \2\ 12 CFR 209.4(a). \3\ 12 U.S.C. 287 and 12 CFR 209.4(c)(2). --------------------------------------------------------------------------- [[Page 58467]] Section 7(a)(1) of the Federal Reserve Act \4\ provides that Reserve Bank stockholders with $10 billion or less in total consolidated assets shall receive a six percent dividend on paid-in capital stock, while stockholders with more than $10 billion in total consolidated assets shall receive a dividend on paid-in capital stock equal to the lesser of six percent and ``the rate equal to the high yield of the 10-year Treasury note auctioned at the last auction held prior to the payment of such dividend.'' Section 7(a)(1) requires that the Board adjust the threshold for total consolidated assets annually to reflect the change in the Gross Domestic Product Price Index, published by the BEA. --------------------------------------------------------------------------- \4\ 12 U.S.C. 289(a)(1). --------------------------------------------------------------------------- Regulation I implements section 7(a)(1) of the Federal Reserve Act by (1) defining the term ``total consolidated assets,'' \5\ (2) incorporating the statutory dividend rates for Reserve Bank stockholders \6\ and (3) providing that the Board shall adjust the threshold for total consolidated assets annually to reflect the change in the Gross Domestic Product Price Index.\7\ The Board has explained that it ``expects to make this adjustment [to the threshold for total consolidated assets] using the final second quarter estimate of the Gross Domestic Product Price Index for each year, published by the Bureau of Economic Analysis.'' \8\ --------------------------------------------------------------------------- \5\ 12 CFR 209.1(d)(3) (Total consolidated assets means the total assets on the stockholder's balance sheet as reported by the stockholder on its Consolidated Report of Condition and Income (Call Report) as of the most recent December 31, except in the case of a new member or the surviving stockholder after a merger `total consolidated assets' means (until the next December 31 Call Report becomes available) the total consolidated assets of the new member or the surviving stockholder at the time of its application for capital stock''. \6\ 12 CFR 209.4(e), (c)(1)(ii), and (d)(1)(ii); 209.2(a); and 209.3(d)(3). \7\ 12 CFR 209.4(f). \8\ 81 FR 84415, 84417 (Nov. 23, 2016). --------------------------------------------------------------------------- II. Adjustment The Board annually adjusts the $10 billion total consolidated asset threshold based on the change in the Gross Domestic Product Price Index between the second quarter of 2015 (the baseline year) and the second quarter of the current year.\9\ The second quarter 2018 Gross Domestic Product Price Index estimate published by the BEA in September 2018 (110.172) is 5.18% higher than the second quarter 2015 Gross Domestic Product Price Index estimate published by the BEA in September 2018 (104.745). Based on this change in the Gross Domestic Product Price Index, the threshold for total consolidated assets in Regulation I will be $10,518,000,000 as of the effective date of January 1, 2019. --------------------------------------------------------------------------- \9\ The BEA makes ongoing revisions to its estimates of the Gross Domestic Product Price Index for historical calendar quarters. The Board calculates annual adjustments from the baseline year (rather than from the prior-year total consolidated asset threshold) to ensure that the adjusted total consolidated asset threshold accurately reflects the cumulative change in the BEA's most recent estimates of the Gross Domestic Product Price Index. --------------------------------------------------------------------------- III. Administrative Law Matters Administrative Procedure Act The provisions of 5 U.S.C. 553(b) relating to notice of proposed rulemaking have not been followed in connection with the adoption of these amendments. The amendments involve expected, ministerial adjustments that are required by statute and Regulation I and are consistent with a method previously set forth by the Board.\10\ Accordingly, the Board finds good cause for determining, and so determines, that notice in accordance with 5 U.S.C. 553(b) is unnecessary. --------------------------------------------------------------------------- \10\ See 12 CFR 209.4(f) and n. 8 and accompanying text, supra. --------------------------------------------------------------------------- Regulatory Flexibility Act The Regulatory Flexibility Act (RFA) does not apply to a rulemaking where a general notice of proposed rulemaking is not required.\11\ As noted previously, the Board has determined that it is unnecessary 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. --------------------------------------------------------------------------- \11\ 5 U.S.C. 603 and 604. --------------------------------------------------------------------------- Paperwork Reduction Act In accordance with the Paperwork Reduction Act of 1995,\12\ the Board has reviewed this final rule. No collections of information pursuant to the Paperwork Reduction Act are contained in the final rule. --------------------------------------------------------------------------- \12\ 44 U.S.C. 3506; 5 CFR part 1320. --------------------------------------------------------------------------- List of Subjects in 12 CFR Part 209 Banks and banking, Federal Reserve System, Reporting and recordkeeping requirements, Securities. Authority and Issuance For the reasons set forth in the preamble, the Board amends Regulation I, 12 CFR part 209, as follows: PART 209--ISSUE AND CANCELLATION OF FEDERAL RESERVE BANK CAPITAL STOCK (REGULATION I) 0 1. The authority citation for part 209 continues to read as follows: Authority: 12 U.S.C. 12 U.S.C. 222, 248, 282, 286-288, 289, 321, 323, 327-328, and 466. 0 2. In part 209, remove all references to ``$10,283,000,000'' and add in their place ``$10,518,000,000'', wherever they appear. By order of the Board of Governors of the Federal Reserve System, acting through the Secretary of the Board under delegated authority, November 14, 2018. Ann Misback, Secretary of the Board. [FR Doc. 2018-25266 Filed 11-19-18; 8:45 am] BILLING CODE 6210-01-P
![58466 Federal Register / Vol. 83, No. 224 / Tuesday, November 20, 2018 / Rules and Regulations
Libya United States of America FEDERAL RESERVE SYSTEM
Liechtenstein Uruguay
Lithuania 12 CFR Part 209
Luxembourg Uzbekistan
Madagascar Viet Nam [Regulation I; Docket No. R–1635]
Malawi Yemen RIN 7100–AF27
Mali
Malta Zambia
Federal Reserve Bank Capital Stock
Marshall Islands EURATOM
Mauritania AGENCY: Board of Governors of the
Mexico PART 110—EXPORT AND IMPORT OF Federal Reserve System.
Monaco NUCLEAR EQUIPMENT AND ACTION: Final rule.
Mongolia MATERIAL
Montenegro SUMMARY: The Board of Governors
Morocco ■ 16. The authority citation for part 110 (Board) is publishing a final rule that
Mozambique continues to read as follows: applies an inflation adjustment to the
Myanmar threshold for total consolidated assets in
Namibia Authority: Atomic Energy Act of 1954, Regulation I. Federal Reserve Bank
Nauru secs. 11, 51, 53, 54, 57, 62, 63, 64, 65, 81, (Reserve Bank) stockholders that have
Netherlands 82, 103, 104, 109, 111, 121, 122, 123, 124, total consolidated assets above the
New Zealand 126, 127, 128, 129, 133, 134, 161, 170h, 181, threshold receive a different dividend
Nicaragua 182, 183, 184, 186, 187, 189, 223, 234 (42 rate on their Reserve Bank stock than
Niger U.S.C. 2014, 20710, 2073, 2074, 2077, 2092, stockholders with total consolidated
Nigeria 2093, 2094, 2095, 2111, 2112, 2133, 2134, assets at or below the threshold. The
Niue 2139, 2141, 2151, 2152, 2153, 2154, 2155, Federal Reserve Act requires that the
Norway 2156, 2157, 2158, 2160C, 2160D, 2201, Board annually adjust the total
Oman 2210H, 2231, 2232, 2233, 2234, 2236, 2237, consolidated asset threshold to reflect
Pakistan 2239, 2273, 2282); Energy Reorganization Act the change in the Gross Domestic
of 1974, secs. 201 (42 U.S.C. 5841);
Palau Product Price Index, published by the
Administrative Procedure Act (5 U.S.C. 552,
Panama Bureau of Economic Analysis (BEA).
553); 42 U.S.C. 2139a, 2155a; 44 U.S.C. 3504
Paraguay Based on the change in the Gross
note.
Peru Domestic Product Price Index as of
Philippines Section 110.1(b) also issued under 22 September 27, 2018, the total
Poland U.S.C. 2403; 22 U.S.C. 2778a; 50 App. U.S.C. consolidated asset threshold will be
Portugal 2401 et seq. $10,518,000,000 through December 31,
Qatar 2019.
Republic of Moldova § 110.2 [Amended]
DATES: This final rule is effective
Romania ■ 17. In § 110.2 in the definition for January 1, 2019.
Russian Federation NRC Public Document Room, remove
Rwanda FOR FURTHER INFORMATION CONTACT:
the phrase ‘‘8:30 a.m. and 4:15 p.m.’’ Evan Winerman, Senior Counsel (202)
Saint Kitts and Nevis
and add in its place the phrase ‘‘8:00 872–7578), Legal Division; or Jamie
Saint Lucia
San Marino a.m. and 4:00 p.m.’’. Noonan, Lead Financial Institutions
Saudi Arabia Policy Analyst (202) 530–6296), Reserve
§ 110.4 [Amended]
Senegal Bank Operations and Payments Systems
Serbia ■ 18. In § 110.4, remove the phone Division. For users of
Seychelles number ‘‘(301) 415–2344’’ and add in its Telecommunications Device for the Deaf
Singapore place the phone number ‘‘301–287– (TDD) only, contact (202) 263–4869.
Slovakia 9057’’. SUPPLEMENTARY INFORMATION:
Slovenia
§ 110.6 [Amended] I. Background
South Africa
Spain Regulation I governs the issuance and
Sudan ■ 19. In § 110.6(b), remove the phrase cancellation of capital stock by the
Sweden ‘‘Office of International Regimes and Reserve Banks. Under section 5 of the
Switzerland Agreements’’ and add in its place the Federal Reserve Act 1 and Regulation I,2
Tajikistan phrase ‘‘Office of Nonproliferation and a member bank must subscribe to
Thailand Arms Control’’. capital stock of the Reserve Bank of its
The frmr. Yug. Rep. of Macedonia Dated at Rockville, Maryland, this 14th day district in an amount equal to six
Togo of November, 2018. percent of the member bank’s capital
Tonga For the Nuclear Regulatory Commission. and surplus. The member bank must
Trinidad and Tobago pay for one-half of this subscription on
Pamela J. Shepherd-Vladimir,
Tunisia the date that the Reserve Bank approves
Turkey Acting Chief, Regulatory Analysis and its application for capital stock, while
Turkmenistan Rulemaking Support Branch, Office of the remaining half of the subscription
Uganda Nuclear Material Safety and Safeguards. shall be subject to call by the Board.3
Ukraine [FR Doc. 2018–25181 Filed 11–19–18; 8:45 am]
United Arab Emirates BILLING CODE 7590–01–P 1 12 U.S.C. 287.
United Kingdom 2 12 CFR 209.4(a).
United Republic of Tanzania 3 12 U.S.C. 287 and 12 CFR 209.4(c)(2).
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![Federal Register / Vol. 83, No. 224 / Tuesday, November 20, 2018 / Rules and Regulations 58467
Section 7(a)(1) of the Federal Reserve Index estimate published by the BEA in PART 209—ISSUE AND
Act 4 provides that Reserve Bank September 2018 (110.172) is 5.18% CANCELLATION OF FEDERAL
stockholders with $10 billion or less in higher than the second quarter 2015 RESERVE BANK CAPITAL STOCK
total consolidated assets shall receive a Gross Domestic Product Price Index (REGULATION I)
six percent dividend on paid-in capital estimate published by the BEA in
stock, while stockholders with more September 2018 (104.745). Based on this ■ 1. The authority citation for part 209
than $10 billion in total consolidated change in the Gross Domestic Product continues to read as follows:
assets shall receive a dividend on paid- Price Index, the threshold for total Authority: 12 U.S.C. 12 U.S.C. 222, 248,
in capital stock equal to the lesser of six consolidated assets in Regulation I will 282, 286–288, 289, 321, 323, 327–328, and
percent and ‘‘the rate equal to the high be $10,518,000,000 as of the effective 466.
yield of the 10-year Treasury note date of January 1, 2019. ■ 2. In part 209, remove all references to
auctioned at the last auction held prior
III. Administrative Law Matters ‘‘$10,283,000,000’’ and add in their
to the payment of such dividend.’’
place ‘‘$10,518,000,000’’, wherever they
Section 7(a)(1) requires that the Board
Administrative Procedure Act appear.
adjust the threshold for total
consolidated assets annually to reflect By order of the Board of Governors of the
The provisions of 5 U.S.C. 553(b)
the change in the Gross Domestic Federal Reserve System, acting through the
relating to notice of proposed Secretary of the Board under delegated
Product Price Index, published by the rulemaking have not been followed in authority, November 14, 2018.
BEA. connection with the adoption of these
Regulation I implements section Ann Misback,
amendments. The amendments involve Secretary of the Board.
7(a)(1) of the Federal Reserve Act by (1)
defining the term ‘‘total consolidated expected, ministerial adjustments that [FR Doc. 2018–25266 Filed 11–19–18; 8:45 am]
assets,’’ 5 (2) incorporating the statutory are required by statute and Regulation I BILLING CODE 6210–01–P
dividend rates for Reserve Bank and are consistent with a method
stockholders 6 and (3) providing that the previously set forth by the Board.10
Board shall adjust the threshold for total Accordingly, the Board finds good cause DEPARTMENT OF TRANSPORTATION
consolidated assets annually to reflect for determining, and so determines, that
the change in the Gross Domestic notice in accordance with 5 U.S.C. Federal Aviation Administration
Product Price Index.7 The Board has 553(b) is unnecessary.
explained that it ‘‘expects to make this 14 CFR Part 71
Regulatory Flexibility Act
adjustment [to the threshold for total [Docket No. FAA–2018–0500; Airspace
consolidated assets] using the final The Regulatory Flexibility Act (RFA) Docket No. 18–AGL–14]
second quarter estimate of the Gross does not apply to a rulemaking where a
Domestic Product Price Index for each RIN 2120–AA66
general notice of proposed rulemaking
year, published by the Bureau of is not required.11 As noted previously, Amendment of Class E Airspace;
Economic Analysis.’’ 8 the Board has determined that it is Hillsdale, MI
II. Adjustment unnecessary to publish a general notice
of proposed rulemaking for this final AGENCY: Federal Aviation
The Board annually adjusts the $10 Administration (FAA), DOT.
billion total consolidated asset rule. Accordingly, the RFA’s
requirements relating to an initial and ACTION: Final rule.
threshold based on the change in the
Gross Domestic Product Price Index final regulatory flexibility analysis do SUMMARY: This action modifies Class E
between the second quarter of 2015 (the not apply. airspace extending upward from 700
baseline year) and the second quarter of Paperwork Reduction Act feet above the surface at Hillsdale
the current year.9 The second quarter Municipal Airport, Hillsdale, MI, due to
2018 Gross Domestic Product Price In accordance with the Paperwork the decommissioning of the Jackson and
Reduction Act of 1995,12 the Board has Litchfield VHF omnidirectional range
4 12 U.S.C. 289(a)(1). reviewed this final rule. No collections (VOR) navigation aids, which provided
5 12 CFR 209.1(d)(3) (Total consolidated assets of information pursuant to the navigation information for the
means the total assets on the stockholder’s balance
sheet as reported by the stockholder on its Paperwork Reduction Act are contained instrument procedures at this airport, as
Consolidated Report of Condition and Income (Call in the final rule. part of the VOR Minimum Operational
Report) as of the most recent December 31, except Network (MON) Program. The
in the case of a new member or the surviving List of Subjects in 12 CFR Part 209 geographic coordinates of this airport
stockholder after a merger ‘total consolidated assets’
means (until the next December 31 Call Report Banks and banking, Federal Reserve are also updated to coincide with the
becomes available) the total consolidated assets of FAA’s aeronautical database.
System, Reporting and recordkeeping
the new member or the surviving stockholder at the DATES: Effective 0901 UTC, February 28,
time of its application for capital stock’’. requirements, Securities.
6 12 CFR 209.4(e), (c)(1)(ii), and (d)(1)(ii);
2019. The Director of the Federal
209.2(a); and 209.3(d)(3).
Authority and Issuance Register approves this incorporation by
7 12 CFR 209.4(f). reference action under Title 1 Code of
8 81 FR 84415, 84417 (Nov. 23, 2016).
For the reasons set forth in the Federal Regulations part 51, subject to
9 The BEA makes ongoing revisions to its preamble, the Board amends Regulation the annual revision of FAA Order
estimates of the Gross Domestic Product Price Index I, 12 CFR part 209, as follows: 7400.11 and publication of conforming
for historical calendar quarters. The Board
calculates annual adjustments from the baseline
amendments.
year (rather than from the prior-year total ADDRESSES: FAA Order 7400.11C,
consolidated asset threshold) to ensure that the 10 See 12 CFR 209.4(f) and n. 8 and accompanying Airspace Designations and Reporting
adjusted total consolidated asset threshold
accurately reflects the cumulative change in the
text, supra. Points, and subsequent amendments can
BEA’s most recent estimates of the Gross Domestic
11 5 U.S.C. 603 and 604. be viewed online at http://www.faa.gov/
Product Price Index. 12 44 U.S.C. 3506; 5 CFR part 1320. air_traffic/publications/. For further
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Document Created: 2018-11-20 07:59:05
Document Modified: 2018-11-20 07:59:05
| 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 | This final rule is effective January 1, 2019. | |
| Contact | Evan Winerman, Senior Counsel (202) 872-7578), Legal Division; or Jamie Noonan, Lead Financial Institutions Policy Analyst (202) 530-6296), Reserve Bank Operations and Payments Systems Division. For users of Telecommunications Device for the Deaf (TDD) only, contact (202) 263-4869. | |
| FR Citation | 83 FR 58466 | |
| RIN Number | 7100-AF27 | |
| CFR Associated | Banks and Banking; Federal Reserve System; Reporting and Recordkeeping Requirements and Securities |
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