[Federal Register Volume 86, Number 26 (Wednesday, February 10, 2021)]
[Rules and Regulations]
[Page 8853]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-28756]
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Rules and Regulations
Federal Register
________________________________________________________________________
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.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 86, No. 26 / Wednesday, February 10, 2021 /
Rules and Regulations
[[Page 8853]]
FEDERAL RESERVE SYSTEM
12 CFR Part 204
[Docket No. R-1702; RIN 7100-AF 76]
Regulation D: Reserve Requirements of Depository Institutions
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'') is adopting as a final rule, without change, its March 24,
2020 interim final rule amending its Regulation D (Reserve Requirements
of Depository Institutions) to lower reserve requirement ratios on
transaction accounts maintained at depository institutions to zero
percent.
DATES: The final rule is effective March 12, 2021.
FOR FURTHER INFORMATION CONTACT: Sophia H. Allison, Senior Special
Counsel, (202-452-3565), Legal Division, or Matthew Malloy (202-452-
2416), Division of Monetary Affairs, or Heather Wiggins (202-452-3674),
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:
I. Statutory and Regulatory Background; Discussion
Section 19 of the Federal Reserve Act (the ``Act'') imposes reserve
requirements on certain types of deposits and other liabilities of
depository institutions. Specifically, section 19(b)(2) of the Act (12
U.S.C. 461(b)(2)) requires each depository institution to maintain
reserves against its transaction accounts, nonpersonal time deposits,
and Eurocurrency liabilities, as prescribed by Board regulations, for
the purpose of implementing monetary policy. The Board's Regulation D
(Reserve Requirements of Depository Institutions, 12 CFR part 204)
implements the reserve requirements provisions of section 19 of the
Act.
On March 15, 2020, the Board announced an interim final rule
amending Regulation D to lower all transaction account reserve
requirement ratios to zero percent, thereby eliminating all reserve
requirements.\1\ The Board's interim final rule was published on March
24, 2020.\2\ In its March 15 press release announcing this action, the
Board stated:
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\1\ Reserve requirements for nonpersonal time deposits and
Eurocurrency liabilities have been set at zero percent since 1990.
See 55 FR 50540 (December 7, 1990).
\2\ Interim Final Rule, 85 FR16525 (Mar. 24, 2020).
For many years, reserve requirements played a central role in
the implementation of monetary policy by creating a stable demand
for reserves. In January 2019, the FOMC announced its intention to
implement monetary policy in an ample reserves regime. Reserve
requirements do not play a significant role in this operating
framework.
In light of the shift to an ample reserves regime, the Board has
reduced reserve requirement ratios to zero percent effective on
March 26, the beginning of the next reserve maintenance period. This
action eliminates reserve requirements for thousands of depository
institutions and will help to support lending to households and
businesses.\3\
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\3\ Press Release, ``Federal Reserve Actions to Support the Flow
of Credit to Households and Businesses'' (March 15, 2020), https://www.federalreserve.gov/newsevents/pressreleases/monetary20200315b.htm.
The Board requested public comment on the interim final rule. The
public comment period closed on May 26, 2020. The Board received no
comments on the interim final rule and, accordingly, is adopting the
interim final rule as a final rule without change.
II. Regulatory Analysis
A. Administrative Procedure Act and Effective Date
The Administrative Procedure Act (APA) generally requires that a
final rule be published in the Federal Register no less than 30 days
before its effective date.\4\ Therefore, the final rule will become
effective on March 12, 2021. The interim final rule will remain in
effect until the final rule becomes effective.
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\4\ 5 U.S.C. 553(d).
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B. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) does not apply to a rulemaking
when a general notice of proposed rulemaking is not required.\5\
Because the Board previously determined that it was unnecessary to
publish a general notice of proposed rulemaking for the interim final
rule, the RFA's requirements relating to an initial and final
regulatory flexibility analysis do not apply to this final rule.
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\5\ 5 U.S.C. 603, 604.
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C. Paperwork Reduction Act of 1995
The Paperwork Reduction Act of 1995 \6\ (PRA) states that no agency
may conduct or sponsor, nor is a respondent required to respond to, an
information collection unless it displays a currently valid Office of
Management and Budget (OMB) control number. The final rule contains no
collections of information 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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D. Use of Plain Language
Section 722 of the Gramm-Leach Bliley Act \7\ requires banking
agencies to use plain language in all proposed and final rules
published after January 1, 2000. The Board received no comments with
respect to making the interim final rule easier to understand and is
adopting the final rule without change.
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\7\ Public Law 106-102, section 722, 113 Stat. 1338, 1471
(1999).
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Authority and Issuance
0
For the reasons set forth in the preamble, the interim final rule
amending 12 CFR part 204 of chapter II, title 12 of the Code of Federal
Regulations, which was published at 85 FR 16525 on March 24, 2020, is
adopted as a final rule without change.
By order of the Board of Governors of the Federal Reserve
System.
Margaret McCloskey Shanks,
Deputy Secretary of the Board.
[FR Doc. 2020-28756 Filed 2-9-21; 8:45 am]
BILLING CODE 6210-01-P