[Federal Register Volume 82, Number 224 (Wednesday, November 22, 2017)]
[Rules and Regulations]
[Pages 55496-55497]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-25122]


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FEDERAL RESERVE SYSTEM

12 CFR Part 265

[Docket No. OP-1578]


Rules of Organization

AGENCY: Board of Governors of the Federal Reserve System (Board).

ACTION: Amendment to Rules of Organization.

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SUMMARY: The Board has amended its definition of a quorum of the Board 
in the Board's Rules of Organization. The amendment is designed to 
facilitate the Board's ability to continue to function efficiently 
during periods of substantial vacancies on the Board. The amendment 
does not alter the number of Board members required to constitute a 
quorum in normal operating environments. The amendment also addresses 
Board member recusals and disqualifications. In addition, the Board has 
provided a modified definition of a quorum during exigent 
circumstances. In connection with this modification, the Board is 
amending its Rules Regarding Delegation of Authority, published 
elsewhere in this Federal Register, to authorize the Chair (or Vice 
Chair, if the Chair is unavailable) to determine when an emergency 
situation exists.

DATES: The amendment to the Board's Rules of Organization became 
effective on October 25, 2017.

FOR FURTHER INFORMATION CONTACT: Laurie Schaffer, Associate General 
Counsel (202) 452-2272, or Daniel Hickman, Counsel (202) 973-7432, 
Legal Division, Board of Governors of the Federal Reserve System, 20th 
Street and Constitution Avenue NW., Washington, DC 20551. For the 
hearing impaired only, Telecommunication Device for Deaf (TDD) users 
may contact (202) 263-4869.

SUPPLEMENTARY INFORMATION: The Board consists of up to seven members 
appointed by the President, by and with the advice and consent of the 
Senate, as provided in the Federal Reserve Act (Act).\1\ The Act does 
not define a quorum of the Board, and authorizes the Board to make all 
rules and regulations necessary to enable the Board effectively to 
perform its duties and functions.\2\ For many years, the Board defined 
a quorum to be a majority (four members) of its authorized strength of 
seven members. In 2003, the Board revised its definition of a quorum of 
the Board to be a majority of the Board members currently in office, 
unless there are five members in office, in which case a quorum would 
be four members.\3\ This modification allowed the Board to function 
with fewer than four members in office and enhanced the Board's ability 
to function during emergencies.
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    \1\ See 12 U.S.C. 241.
    \2\ See 12 U.S.C. 248(i).
    \3\ 66 FR 37686 (Jul 19, 2001), as amended at 68 FR 24743 (May 
8, 2003).
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    Over the past decade, the Board has had to operate with fewer than 
five members on several occasions.\4\ Based on this experience, the 
Board has determined that substantial vacancies present administrative 
and logistical challenges that make it difficult to conduct routine 
business and efficiently manage operations, particularly with the 
Board's traditional reliance on a 3-member committee structure. In 
light of these considerations, the Board has reconsidered its quorum 
practice and decided to amend its definition of a quorum to provide 
that a quorum of the Board is four members, unless there are three or 
fewer members in office, in which case a quorum would be all members in 
office. This revised definition will facilitate the Board's ability to 
continue to function efficiently during periods of substantial 
vacancies on the Board. This revision does not alter the number of 
Board members required to constitute a quorum or the functioning of the 
Board's committee structure in normal operating environments (that is, 
when five or more members are in office).
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    \4\ Since the current structure of the Board was established in 
1936, the Board has had fewer than five members on only a few 
occasions for a short period of time and the Board has never had 
fewer than four members.
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    Increasing the quorum requirement for a four-member and three-
member Board may make it more difficult to convene a quorum if a member 
of the Board is recused or disqualified from a particular matter. To 
address this concern, the Board also has amended its Rules of 
Organization to clarify that Board members who are recused or 
disqualified from participating in a particular matter will be excluded 
from calculations of the quorum requirement for that matter.
    Since the revisions may make it more difficult to convene a quorum 
of the Board under exigent circumstances, the Board also has added a 
modified definition of quorum providing that, in an emergency 
situation, a quorum of the Board consists of a majority of the Board 
members in office. An emergency situation is defined as a situation 
when action on a matter is necessary to prevent, correct, or mitigate 
serious harm to the economy or the stability of the financial system, 
and action is required before the full Board can convene. The Board is 
amending its Rules Regarding Delegation of Authority (12 CFR part 265), 
published elsewhere in this Federal Register, to authorize the Chair 
(or the Vice Chair, if the Chair is unavailable) to determine when an 
emergency situation exists.
    The Board has incorporated these revisions into its Rules of 
Organization and Rules Regarding Delegation of Authority,\5\ published 
elsewhere in this Federal Register. The revisions relate solely to the 
internal procedure of the Board, and, accordingly, the public notice, 
public comment and delayed effective date provisions of the 
Administrative Procedure Act do not apply. See 5 U.S.C. 553(b) and (d). 
Because public notice and comment is not required, the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.) also does not apply to this 
action.
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    \5\ The Board's Rules Regarding Delegation of Authority are 
codified at 12 CFR part 265.
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Board of Governors--Rules of Organization

0
Section 2 paragraph (b) is revised to read as follows:


Section 2  Composition, Location, and Public Information

* * * * *
    (b)(1) Quorum. Four Board members constitutes a quorum of the Board 
for purposes of transacting business except that, if there are three or 
fewer Board members in office, then a quorum consists of all Board 
members currently in office. If a Board member is recused or 
disqualified from participating in a matter, the member shall not be 
counted for purposes of calculating the quorum for that matter.
    (b)(2) Exigent Circumstances. In an emergency situation, a quorum 
of the Board consists of a majority of the Board members in office. An 
emergency situation exists when action on a matter is necessary to 
prevent, correct, or mitigate serious harm to the economy or the 
stability of the financial system, and action is required before the 
full Board can convene.


[[Page 55497]]


    By order of the Board of Governors of the Federal Reserve 
System, November 15, 2017.
Ann E. Misback,
Secretary of the Board.
[FR Doc. 2017-25122 Filed 11-21-17; 8:45 am]
BILLING CODE 6210-01-P