[Federal Register Volume 88, Number 60 (Wednesday, March 29, 2023)]
[Rules and Regulations]
[Pages 18379-18380]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-06441]


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FEDERAL RESERVE SYSTEM

12 CFR Part 201

[Docket No. R-1803; RIN 7100-AG56]


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: This rule (amendments to part 201 (Regulation A)) 
is effective March 29, 2023.
    Applicability date: The rate changes for primary and secondary 
credit were applicable on March 23, 2023.

FOR FURTHER INFORMATION CONTACT: Sophia H. Allison, Senior Special 
Counsel (202-452-3565), Legal Division, or Nicole Trachman, Financial 
Institution & Policy Analyst (202-973-5055), Division of Monetary 
Affairs; for users of telephone systems via text telephone (TTY) or any 
TTY-based Telecommunications Relay Services, please call 711 from any 
telephone, anywhere in the United States; 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

[[Page 18380]]

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 22, 2023, the Board voted to approve a 0.25 percentage 
point increase in the primary credit rate, thereby increasing the 
primary credit rate from 4.75 percent to 5 percent. 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 increased by 0.25 percentage points 
as a result of the Board's primary credit rate action, thereby 
increasing the secondary credit rate from 5.25 percent to 5.50 percent. 
The amendments to Regulation A reflect these rate changes.
    The 0.25 percentage point increase in the primary credit rate was 
associated with a 0.25 percentage point increase in the target range 
for the federal funds rate (from a target range of 4\1/2\ percent to 
4\3/4\ percent to a target range of 4\3/4\ percent to 5 percent) 
announced by the Federal Open Market Committee on March 22, 2023, 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).
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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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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.3

    (a) Primary credit. The interest rate at each Federal Reserve Bank 
for primary credit provided to depository institutions under Sec.  
201.4(a) is 5 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 5.50 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.
Ann E. Misback,
Secretary of the Board.
[FR Doc. 2023-06441 Filed 3-28-23; 8:45 am]
BILLING CODE 6210-02-P