[Federal Register Volume 84, Number 21 (Thursday, January 31, 2019)]
[Rules and Regulations]
[Pages 511-512]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-28423]



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 Rules and Regulations
                                                 Federal Register
 ________________________________________________________________________
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 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
 to and codified in the Code of Federal Regulations, which is published 
 under 50 titles pursuant to 44 U.S.C. 1510.
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 The Code of Federal Regulations is sold by the Superintendent of Documents. 
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  Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / 
Rules and Regulations  

[[Page 511]]



FEDERAL RESERVE SYSTEM

12 CFR Part 201

[Docket No. R-1645]
RIN 7100 AF-34


Regulation A: 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: 
    Effective date: The amendments to part 201 (Regulation A) are 
effective January 31, 2019.
    Applicability date: The rate changes for primary and secondary 
credit were applicable on December 20, 2018.

FOR FURTHER INFORMATION CONTACT: Clinton Chen, Senior Attorney (202/
452-3952), or Sophia Allison, Senior Special Counsel (202/452-3565), 
Legal Division, or Kristen Payne, Senior Financial Institution & Policy 
Analyst (202/452-2872), 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: 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.
    On December 19, 2018, the Board voted to approve a \1/4\ percentage 
point increase in the primary credit rate in effect at each of the 
twelve Federal Reserve Banks, thereby increasing from 2.75 percent to 
3.00 percent the rate that each Reserve Bank charges for extensions of 
primary credit. In addition, the Board had previously approved the 
renewal of the secondary credit rate formula, the primary credit rate 
plus 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 3.25 percent to 3.50 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 2 to 2\1/4\ percent to a target range of 
2\1/4\ to 2\1/2\ percent) announced by the Federal Open Market 
Committee on December 19, 2018, as described in the Board's amendment 
of its Regulation D published elsewhere in this issue of the Federal 
Register.

Administrative Procedure Act

    In general, the Administrative Procedure Act (``APA'') \1\ imposes 
three principal requirements when an agency promulgates legislative 
rules (rules made pursuant to congressionally delegated authority): (1) 
Publication with adequate notice of a proposed rule; (2) followed by a 
meaningful opportunity for the public to comment on the rule's content; 
and (3) publication of the final rule not less than 30 days before its 
effective date. The APA provides that notice and comment procedures do 
not apply if the agency for good cause finds them to be ``unnecessary, 
impracticable, or contrary to the public interest.'' \2\ Section 553(d) 
of the APA also provides that publication at least 30 days prior to a 
rule's effective date is not required for (1) a substantive rule which 
grants or recognizes an exemption or relieves a restriction; (2) 
interpretive rules and statements of policy; or (3) a rule for which 
the agency finds good cause for shortened notice and publishes its 
reasoning with the rule.\3\ The APA further provides that the notice, 
public comment, and delayed effective date requirements of 5 U.S.C. 553 
do not apply ``to the extent that there is involved . . . a matter 
relating to agency management or personnel or to public property, 
loans, grants, benefits, or contracts.'' \4\
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    \1\ 5 U.S.C. 551 et seq.
    \2\ 5 U.S.C. 553(b)(3)(A).
    \3\ 5 U.S.C. 553(d).
    \4\ 5 U.S.C. 553(a)(2) (emphasis added).
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    Regulation A establishes the interest rates that the twelve Reserve 
Banks charge for extensions of primary credit and secondary credit. The 
Board has determined that the notice, public comment, and delayed 
effective date requirements of the APA do not apply to these final 
amendments to Regulation A for several reasons. The amendments involve 
a matter relating to loans and are therefore exempt under the terms of 
the APA. In addition, the Board has determined that notice, public 
comment, and delayed effective date would be unnecessary and contrary 
to the public interest because delay in implementation of changes to 
the rates charged on primary credit and secondary credit would permit 
insured depository institutions to profit improperly from the 
difference in the current rate and the announced increased rate. 
Finally, because delay would undermine the Board's action in responding 
to economic data and conditions, the Board has determined that ``good 
cause'' exists within the meaning of the APA to dispense with the 
notice, public comment, and delayed effective date procedures of the 
APA with respect to the final amendments to Regulation A.

Regulatory Flexibility Analysis

    The Regulatory Flexibility Act (``RFA'') does not apply to a 
rulemaking where a general notice of proposed rulemaking is not 
required.\5\ 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

[[Page 512]]

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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    \5\ 5 U.S.C. 603, 604.
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Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act (``PRA'') of 
1995,\6\ 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.
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    \6\ 44 U.S.C. 3506; see 5 CFR part 1320, appendix A.1.
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12 CFR Chapter II

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 to read as follows:

PART 201--EXTENSIONS OF CREDIT BY FEDERAL RESERVE BANKS (REGULATION 
A)

0
1. The authority citation for part 201 is revised 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.\3\
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    \3\ 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 rate at each Federal Reserve Bank 
for primary credit provided to depository institutions under Sec.  
201.4(a) is 3.00 percent.
    (b) Secondary credit. The interest rate at each Federal Reserve 
Bank for secondary credit provided to depository institutions under 
Sec.  201.4(b) is 3.50 percent.
* * * * *

    By order of the Board of Governors of the Federal Reserve 
System, December 20, 2018.
Ann Misback,
Secretary of the Board.
[FR Doc. 2018-28423 Filed 1-30-19; 8:45 am]
 BILLING CODE 6210-01-P