[Federal Register Volume 77, Number 211 (Wednesday, October 31, 2012)]
[Rules and Regulations]
[Pages 65773-65775]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-26662]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
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Federal Register / Vol. 77, No. 211 / Wednesday, October 31, 2012 /
Rules and Regulations
[[Page 65773]]
FEDERAL RESERVE SYSTEM
12 CFR Part 204
[Regulation D; Docket No. R-1446]
RIN 7100 AD 93
Reserve Requirements of Depository Institutions
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Final rule.
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SUMMARY: The Board is amending Regulation D, Reserve Requirements of
Depository Institutions, to reflect the annual indexing of the reserve
requirement exemption amount and the low reserve tranche for 2013. The
Regulation D amendments set the amount of total reservable liabilities
of each depository institution that is subject to a zero percent
reserve requirement in 2013 at 12.4 million (from $11.5 million in
2012). This amount is known as the reserve requirement exemption
amount. The Regulation D amendments also set the amount of net
transaction accounts at each depository institution (over the reserve
requirement exemption amount) that is subject to a three percent
reserve requirement in 2013 at $79.5 million (from $71.0 million in
2012). This amount is known as the low reserve tranche. The adjustments
to both of these amounts are derived using statutory formulas specified
in the Federal Reserve Act.
The Board is also announcing changes in two other amounts, the
nonexempt deposit cutoff level and the reduced reporting limit, that
are used to determine the frequency at which depository institutions
must submit deposit reports.
DATES: Effective Date: November 30, 2012.
Compliance Dates: For depository institutions that report deposit
data weekly, the new low reserve tranche and reserve requirement
exemption amount will apply to the fourteen-day reserve computation
period that begins Tuesday, November 27, 2012, and the corresponding
fourteen-day reserve maintenance period that begins Thursday, December
27, 2012. For depository institutions that report deposit data
quarterly, the new low reserve tranche and reserve requirement
exemption amount will apply to the seven-day reserve computation period
that begins Tuesday, December 18, 2012, and the corresponding seven-day
reserve maintenance period that begins Thursday, January 17, 2013. For
all depository institutions, these new values of the nonexempt deposit
cutoff level, the reserve requirement exemption amount, and the reduced
reporting limit will be used to determine the frequency at which a
depository institution submits deposit reports effective in either June
or September 2013.
FOR FURTHER INFORMATION CONTACT: Sophia H. Allison, Senior Counsel
(202/452-3565), Legal Division, or Ezra A. Kidane, Financial Analyst
(202/973-6161), 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: Section 19(b)(2) of the Federal Reserve Act
(12 U.S.C. 461(b)(2)) requires each depository institution to maintain
reserves against its transaction accounts and nonpersonal time
deposits, as prescribed by Board regulations, for the purpose of
implementing monetary policy. Section 11(a)(2) of the Federal Reserve
Act (12 U.S.C. 248(a)(2)) authorizes the Board to require reports of
liabilities and assets from depository institutions to enable the Board
to conduct monetary policy. The Board's actions with respect to each of
these provisions are discussed in turn below.
Reserve Requirements
Pursuant to section 19(b) of the Federal Reserve Act (Act),
transaction account balances maintained at each depository institution
are subject to reserve requirement ratios of zero, three, or ten
percent. Section 19(b)(11)(A) of the Act (12 U.S.C. 461(b)(11)(A))
provides that a zero percent reserve requirement shall apply at each
depository institution to total reservable liabilities that do not
exceed a certain amount, known as the reserve requirement exemption
amount. Section 19(b)(11)(B) provides that, before December 31 of each
year, the Board shall issue a regulation adjusting the reserve
requirement exemption amount for the next calendar year if total
reservable liabilities held at all depository institutions increase
from one year to the next. No adjustment is made to the reserve
requirement exemption amount if total reservable liabilities held at
all depository institutions should decrease during the applicable time
period. The Act requires the percentage increase in the reserve
requirement exemption amount to be 80 percent of the increase in total
reservable liabilities of all depository institutions over the one-year
period that ends on the June 30 prior to the adjustment.
Total reservable liabilities of all depository institutions
increased about 9.6 percent (from $5,455 billion to $5,978 billion)
between June 30, 2011, and June 30, 2012. Accordingly, the Board is
amending Regulation D to set the reserve requirement exemption amount
for 2013 at $12.4 million, an increase of $0.9 million from its level
in 2012.\1\
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\1\ Consistent with Board practice, the low reserve tranche and
reserve requirement exemption amounts have been rounded to the
nearest $0.1 million.
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Pursuant to Section 19(b)(2) of the Act (12 U.S.C. 461(b)(2)),
transaction account balances maintained at each depository institution
over the reserve requirement exemption amount and up to a certain
amount, known as the low reserve tranche, are subject to a three
percent reserve requirement. Transaction account balances over the low
reserve tranche are subject to a ten percent reserve requirement.
Section 19(b)(2) also provides that, before December 31 of each year,
the Board shall issue a regulation adjusting the low reserve tranche
for the next calendar year. The Act requires the adjustment in the low
reserve tranche to be 80 percent of the percentage increase or decrease
in total transaction accounts of all depository institutions over the
one-year period that ends on the June 30 prior to the adjustment.
[[Page 65774]]
Net transaction accounts of all depository institutions increased
15.0 percent (from $1,190 billion to $1,368 billion) between June 30,
2011 and June 30, 2012. Accordingly, the Board is amending Regulation D
to increase the low reserve tranche for net transaction accounts by
$8.5 million, from $71.0 million for 2012 to $79.5 million for 2013.
For depository institutions that file deposit reports weekly, the
new low reserve tranche and reserve requirement exemption amount will
be effective for the fourteen-day reserve computation period beginning
Tuesday, November 27, 2012, and for the corresponding fourteen-day
reserve maintenance period beginning Thursday, December 27, 2012. For
depository institutions that report quarterly, the new low reserve
tranche and reserve requirement exemption amount will be effective for
the seven-day reserve computation period beginning Tuesday, December
18, 2012, and for the corresponding seven-day reserve maintenance
period beginning Thursday, January 17, 2013.
Deposit Reports
Section 11(b)(2) of the Federal Reserve Act authorizes the Board to
require depository institutions to file reports of their liabilities
and assets as the Board may determine to be necessary or desirable to
enable it to discharge its responsibility to monitor and control the
monetary and credit aggregates. The Board screens depository
institutions each year and assigns them to one of four deposit
reporting panels (weekly reporters, quarterly reporters, annual
reporters, or nonreporters). The panel assignment for annual reporters
is effective in June of the screening year; the panel assignment for
weekly and quarterly reporters is effective in September of the
screening year.
In order to ease reporting burden, the Board permits smaller
depository institutions to submit deposit reports less frequently than
larger depository institutions. The Board permits depository
institutions with net transaction accounts above the reserve
requirement exemption amount but total transaction accounts, savings
deposits, and small time deposits below a specified level (the
``nonexempt deposit cutoff'') to report deposit data quarterly.
Depository institutions with net transaction accounts above the reserve
requirement exemption amount but with total transaction accounts,
savings deposits, and small time deposits above the nonexempt deposit
cutoff are required to report deposit data weekly. The Board requires
certain large depository institutions to report weekly regardless of
the level of their net transaction accounts if the depository
institution's total transaction accounts, savings deposits, and small
time deposits exceeds a specified level (the ``reduced reporting
limit''). The nonexempt deposit cutoff level and the reduced reporting
limit are adjusted annually, by an amount equal to 80 percent of the
increase, if any, in total transaction accounts, savings deposits, and
small time deposits of all depository institutions over the one-year
period that ends on the June 30 prior to the adjustment.
From June 30, 2011 to June 30, 2012, total transaction accounts,
savings deposits, and small time deposits at all depository
institutions increased 8.8 percent (from $8,174 billion to $8,890
billion). Accordingly, the Board is increasing the nonexempt deposit
cutoff level by $19.0 million to $290.5 million for 2013 (from $271.5
million in 2012). The Board is also increasing the reduced reporting
limit by $107 million to $1.628 billion in 2013 (from $1.521 billion
for 2012).\2\
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\2\ Consistent with Board practice, the nonexempt deposit cutoff
level has been rounded to the nearest $0.1 million, and the reduced
reporting limit has been rounded to the nearest $1 million.
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Beginning in 2013, the boundaries of the four deposit reporting
panels will be defined as follows. Those depository institutions with
net transaction accounts over $12.4 million (the reserve requirement
exemption amount) or with total transaction accounts, savings deposits,
and small time deposits greater than or equal to $1.628 billion (the
reduced reporting limit) are subject to detailed reporting, and must
file a Report of Transaction Accounts, Other Deposits and Vault Cash
(FR 2900 report) either weekly or quarterly. Of this group, those with
total transaction accounts, savings deposits, and small time deposits
greater than or equal to $290.5 million (the nonexempt deposit cutoff
level) are required to file the FR 2900 report each week, while those
with total transaction accounts, savings deposits, and small time
deposits less than $290.5 million are required to file the FR 2900
report each quarter. Those depository institutions with net transaction
accounts less than or equal to $12.4 million (the reserve requirement
exemption amount) and with total transaction accounts, savings
deposits, and small time deposits less than $1.628 billion (the reduced
reporting limit) are eligible for reduced reporting, and must either
file a deposit report annually or not at all. Of this group, those with
total deposits greater than $12.4 million (but with total transaction
accounts, savings deposits, and small time deposits less than $1.628
billion) are required to file the Annual Report of Deposits and
Reservable Liabilities (FR 2910a) report annually, while those with
total deposits less than or equal to $12.4 million are not required to
file a deposit report. A depository institution that adjusts reported
values on its FR 2910a report in order to qualify for reduced reporting
will be shifted to an FR 2900 reporting panel.
Notice and Regulatory Flexibility 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 prescribed by statute and by the Board's policy concerning
reporting practices. The adjustments in the reserve requirement
exemption amount, the low reserve tranche, the nonexempt deposit cutoff
level, and the reduced reporting limit serve to reduce regulatory
burdens on depository institutions. Accordingly, the Board finds good
cause for determining, and so determines, that notice in accordance
with 5 U.S.C. 553(b) is unnecessary. Consequently, the provisions of
the Regulatory Flexibility Act, 5 U.S.C. 601, do not apply to these
amendments.
List of Subjects in 12 CFR Part 204
Banks, banking, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Board is amending 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:
Authority: 12 U.S.C. 248(a), 248(c), 371a, 461, 601, 611, and
3105.
0
2. Section 204.4(f) is revised to read as follows:
204.4 Computation of required reserves.
* * * * *
(f) For all depository institutions, Edge and Agreement
corporations, and United States branches and agencies of foreign banks,
required reserves are computed by applying the reserve requirement
ratios below to net transaction accounts, nonpersonal time
[[Page 65775]]
deposits, and Eurocurrency liabilities of the institution during the
computation period.
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Reservable liability Reserve requirement
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NET TRANSACTION ACCOUNTS:
$0 to reserve requirement exemption 0 percent of amount.
amount ($12.4 million).
Over reserve requirement exemption 3 percent of amount.
amount $12.4 million) and up to
low reserve tranche ($79.5
million).
Over low reserve tranche ($79.5 $2,013,000 plus 10 percent of
million). amount over $79.5 million.
Nonpersonal time deposits.............. 0 percent.
Eurocurrency liabilities............... 0 percent.
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By order of the Board of Governors of the Federal Reserve
System, acting through the Director of the Division of Monetary
Affairs under delegated authority.
Dated: October 24, 2012.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2012-26662 Filed 10-30-12; 8:45 am]
BILLING CODE 6210-01-P