[Federal Register Volume 85, Number 57 (Tuesday, March 24, 2020)]
[Rules and Regulations]
[Pages 16523-16525]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-05804]


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FEDERAL RESERVE SYSTEM

12 CFR Part 201

[Docket No. R-1700; RIN 7100-AF 74]


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

[[Page 16524]]

adopted final amendments to its Regulation A to reflect the Board's 
approval of a decrease in the rate for primary credit at each Federal 
Reserve Bank. The secondary credit rate at each Reserve Bank 
automatically decreased 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 March 24, 2020.
    Applicability date: The rate changes for primary and secondary 
credit were applicable on March 16, 2020.

FOR FURTHER INFORMATION CONTACT: Sophia H. Allison, Senior Special 
Counsel (202-452-3565), Legal Division, or Lyle Kumasaka, Lead 
Financial Institution & Policy Analyst (202-452-2382), or Laura 
Lipscomb, Assistant Director (202-912-7964), 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 review and determination of the 
Board.
    On March 15, 2020, the Board voted to approve a 1.50 percentage 
point decrease in the primary credit rate in effect at each of the 
twelve Federal Reserve Banks, thereby decreasing from 1.75 percent to 
0.25 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 decreased by 1.50 
percentage point as a result of the Board's primary credit rate action, 
thereby decreasing from 2.25 percent to 0.75 percent the rate that each 
Reserve Bank charges for extensions of secondary credit. The amendments 
to Regulation A reflect these rate changes.
    The 1.50 percentage point decrease in the primary credit rate was 
associated with a 1.00 percentage point decrease in the target range 
for the federal funds rate (from a target range of 1 percent to 1\1/4\ 
percent to a target range of zero percent to \1/4\ percent) announced 
by the Federal Open Market Committee on March 15, 2020, as described in 
the Board's amendment of its Regulation D published elsewhere in 
today's 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. The amendments involve a matter relating to 
loans and are therefore exempt under the terms of the APA. Furthermore, 
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 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 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.\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 0.25 percent.
    (b) Secondary credit. The interest rate at each Federal Reserve 
Bank for

[[Page 16525]]

secondary credit provided to depository institutions under Sec.  
201.4(b) is 0.75 percent.
* * * * *
\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.

    By order of the Board of Governors of the Federal Reserve 
System, March 16, 2020.
Ann Misback,
Secretary of the Board.
[FR Doc. 2020-05804 Filed 3-23-20; 8:45 am]
BILLING CODE 6210-01-P