[Federal Register Volume 75, Number 190 (Friday, October 1, 2010)]
[Notices]
[Page 60749]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-24649]
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FEDERAL RESERVE SYSTEM
[Docket No. OP-1345]
Policy on Payment System Risk
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Notice.
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SUMMARY: The Board of Governors of the Federal Reserve System (Board)
is announcing the implementation date of March 24, 2011, for revisions
to part II of its Policy on Payment System Risk (PSR). The revisions
explicitly recognize the role of the central bank in providing intraday
credit to healthy depository institutions, and establish a zero fee for
collateralized daylight overdrafts, a 50 basis point (annual rate)
charge for uncollateralized daylight overdrafts, and a biweekly
daylight overdraft fee waiver of $150. The Board approved these
revisions in late 2008 for implementation in approximately two years
following substantial changes to the Reserve Bank infrastructure.
DATES: Effective Date: The policy will take effect on March 24, 2011.
FOR FURTHER INFORMATION CONTACT: Jeffrey Marquardt, Deputy Director
(202) 452-2360, Susan Foley, Deputy Associate Director (202) 452-3596,
or Jeffrey Walker, Manager (202) 721-4559, Division of Reserve Bank
Operations and Payment Systems, Board of Governors of the Federal
Reserve System; for users of Telecommunications Device for the Deaf
(``TDD'') only, contact (202) 263-4869.
SUPPLEMENTARY INFORMATION: On December 19, 2008, the Board approved
revisions to part II of its PSR policy designed to improve intraday
liquidity management and payment flows for the banking system, while
also helping to mitigate credit exposures of the Federal Reserve Banks
(Reserve Banks) from daylight overdrafts.\1\ The revisions formally
recognize the role of the central bank in providing intraday credit to
depository institutions and encourage them to collateralize explicitly
their daylight overdrafts. Collateralized daylight overdrafts will be
charged a zero fee, while uncollateralized daylight overdrafts will be
charged 50 basis points (annual rate), an increase from the current
rate of 36 basis points (annual rate), to encourage the voluntary use
of collateral. The Board also approved a biweekly daylight overdraft
fee waiver of $150 to minimize the effect of the proposed policy
changes on institutions that use small amounts of daylight overdrafts.
In addition, the Board changed other elements of the PSR policy dealing
with daylight overdrafts, including adjusting net debit caps,
streamlining max cap procedures for certain FBOs (implemented in March
2009), eliminating the deductible for daylight overdraft fees, and
increasing the penalty daylight overdraft fee for ineligible
institutions to 150 basis points (annual rate). The revisions to the
PSR policy will become effective on March 24, 2011.
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\1\ See 73 FR 79109, December 24, 2008.
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The Board encourages depository institutions to review
documentation explaining the implementation of the revised PSR policy.
Institutions should review either the Overview of the Federal Reserve's
Payment System Risk Policy (Overview) or the Guide to the Federal
Reserve's Payment System Risk Policy (the Guide). The purpose of the
Overview is to help depository institutions that use only minimal
amounts of Federal Reserve intraday credit understand and comply with
the PSR policy. The purpose of the Guide is to help institutions that
use Federal Reserve intraday credit more regularly, foreign banking
organizations, and those that may be considered ``special situations''
because of their legal structure or payment activity, understand and
comply with more detailed aspects of the PSR policy. Versions of the
Guide and Overview that have been updated with information related to
the revised policy will be available on the Board's Web site later this
year at http://www.federalreserve.gov/paymentsystems/psr_relpolicies.htm. The current versions of the Guide and Overview will be
available on the Board's Web site until 30 days after the
implementation date.
The Federal Reserve will also publish updated guidelines for
collateral pledging and withdrawal to help institutions better
understand the types of collateral eligible to pledge and the
processing steps associated with these types of collateral. This
information will be available on the discount window and PSR Web site
later this year at http://www.frbdiscountwindow.org. In addition, to
assist all institutions in understanding the effect of the revised
policy on their daylight overdraft fees, the Board created a simplified
fee calculator that is located on the Board's Web site at https://www.federalreserve.gov/apps/RPFCalc/. The calculator enables
institutions to input daylight overdraft and collateral data to
estimate their daylight overdraft fees under the revised PSR policy.
The calculator will be available until 30 days after the implementation
date.
By order of the Board of Governors of the Federal Reserve
System, September 23, 2010.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. 2010-24649 Filed 9-30-10; 8:45 am]
BILLING CODE 6210-01-P