[Federal Register Volume 80, Number 246 (Wednesday, December 23, 2015)]
[Rules and Regulations]
[Pages 79671-79673]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-32295]


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FEDERAL RESERVE SYSTEM

12 CFR Part 201

[Docket No. R-1528; Regulation A]
RIN 7100-AE42


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: The amendments to part 201 (Regulation A) are effective December 
23, 2015. The rate changes for primary and secondary credit were 
applicable on December 17, 2015, as specified in 12 CFR 201.51, as 
amended.

FOR FURTHER INFORMATION CONTACT: Stephanie Martin, Associate General 
Counsel (202/452-3198), or Clinton N. Chen, Attorney (202-452-3952), 
Legal Division, or Lyle Kumasaka, Senior Financial Analyst (202-452-
2382); 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: 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.
    The Board approved requests by the Reserve Banks to increase by \1/
4\ percentage point the primary credit rate in effect at each of the 
twelve Federal Reserve Banks, thereby increasing from 0.75 percent to 
1.00 percent the rate that each Reserve Bank charges for extensions of 
primary credit. In addition, the Board had previously approved requests 
by the Reserve Banks to renew the formula for the secondary credit 
rate, the primary credit rate plus

[[Page 79672]]

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 1.25 percent to 1.50 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 0 to \1/4\ percent to a target range of 
\1/4\ to \1/2\ percent) announced by the Federal Open Market Committee 
(``Committee'') on December 16, 2015. A press release announcing these 
actions indicated that:

    Information received since the Federal Open Market Committee met 
in October suggests that economic activity has been expanding at a 
moderate pace. Household spending and business fixed investment have 
been increasing at solid rates in recent months, and the housing 
sector has improved further; however, net exports have been soft. A 
range of recent labor market indicators, including ongoing job gains 
and declining unemployment, shows further improvement and confirms 
that underutilization of labor resources has diminished appreciably 
since early this year. Inflation has continued to run below the 
Committee's 2 percent longer-run objective, partly reflecting 
declines in energy prices and in prices of non-energy imports. 
Market-based measures of inflation compensation remain low; some 
survey-based measures of longer-term inflation expectations have 
edged down.
    Consistent with its statutory mandate, the Committee seeks to 
foster maximum employment and price stability. The Committee 
currently expects that, with gradual adjustments in the stance of 
monetary policy, economic activity will continue to expand at a 
moderate pace and labor market indicators will continue to 
strengthen. Overall, taking into account domestic and international 
developments, the Committee sees the risks to the outlook for both 
economic activity and the labor market as balanced. Inflation is 
expected to rise to 2 percent over the medium term as the transitory 
effects of declines in energy and import prices dissipate and the 
labor market strengthens further.

Administrative Procedure Act

    The notice, public comment, and delayed effective date requirements 
of 5 U.S.C. 553 is inapplicable ``to the extent that there is involved 
. . . a matter relating to agency management or personnel or to public 
property, loans, grants, benefits, or contracts.'' \1\ This rulemaking 
involves a matter relating to loans, as the Board is revising the 
interest rates that the twelve Federal Reserve Banks charge for 
extensions of credit under the primary and secondary credit programs.
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    \1\ 5 U.S.C. 553(a)(2) (emphasis added).
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    Furthermore, the Board has determined that delaying implementation 
of the changes in the primary and secondary credit rates in order to 
allow notice and public comment would be unnecessary and contrary to 
the public interest. Therefore, the Board has found good cause to not 
follow the provisions of 5 U.S.C. 553(b) relating to notice and public 
participation. The Board's revisions to these rates were taken with a 
view to accommodating commerce and business and with regard to their 
bearing upon the general credit situation of the country. Notice and 
public participation would prevent the Board's action from being 
effective as promptly as necessary in the public interest. Seeking 
notice and comment on the rate changes would not aid the persons 
affected and would otherwise serve no useful purpose. For these same 
reasons, the Board also has found good cause not to provide 30 days 
prior notice of the effective date of the rule under 5 U.S.C. 553(d).

Regulatory Flexibility Analysis

    The Regulatory Flexibility Act (``RFA'') does not apply to a 
rulemaking where a general notice of proposed rulemaking is not 
required.\2\ 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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    \2\ 5 U.S.C. 603 and 604.
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Paperwork Reduction Act

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

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 Chapter II 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), 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.\1\
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    \1\ 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 rates for primary credit provided 
to depository institutions under Sec.  201.4(a) are:

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        Federal reserve bank             Rate            Effective
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Boston.............................         1.00  December 17, 2015.
New York...........................         1.00  December 17, 2015.
Philadelphia.......................         1.00  December 17, 2015.
Cleveland..........................         1.00  December 17, 2015.
Richmond...........................         1.00  December 17, 2015.
Atlanta............................         1.00  December 17, 2015.
Chicago............................         1.00  December 17, 2015.
St. Louis..........................         1.00  December 17, 2015.
Minneapolis........................         1.00  December 17, 2015.
Kansas City........................         1.00  December 17, 2015.
Dallas.............................         1.00  December 17, 2015.
San Francisco......................         1.00  December 17, 2015.
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[[Page 79673]]

    (b) Secondary credit. The interest rates for secondary credit 
provided to depository institutions under Sec.  201.4(b) are:

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        Federal reserve bank             Rate            Effective
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Boston.............................         1.50  December 17, 2015.
New York...........................         1.50  December 17, 2015.
Philadelphia.......................         1.50  December 17, 2015.
Cleveland..........................         1.50  December 17, 2015.
Richmond...........................         1.50  December 17, 2015.
Atlanta............................         1.50  December 17, 2015.
Chicago............................         1.50  December 17, 2015.
St. Louis..........................         1.50  December 17, 2015.
Minneapolis........................         1.50  December 17, 2015.
Kansas City........................         1.50  December 17, 2015.
Dallas.............................         1.50  December 17, 2015.
San Francisco......................         1.50  December 17, 2015.
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* * * * *

    By order of the Board of Governors of the Federal Reserve 
System, December 18, 2015.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2015-32295 Filed 12-22-15; 8:45 am]
BILLING CODE 6210-02-P