[Federal Register Volume 88, Number 91 (Thursday, May 11, 2023)]
[Rules and Regulations]
[Pages 30215-30216]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-10021]


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FEDERAL RESERVE SYSTEM

12 CFR Part 201

[Docket No. 1805]
RIN 7100-AG58


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 May 11, 2023.
    Applicability date: The rate changes for primary and secondary 
credit were applicable on May 4, 2023.

FOR FURTHER INFORMATION CONTACT: M. Benjamin Snodgrass, Senior Counsel 
(202-263-4877), Legal Division, or Courtney Demartini, Lead Financial 
Institution & Policy Analyst (202-379-8109), 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 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 May 3, 2023, the Board voted to approve a 0.25 percentage point 
increase in the primary credit rate, thereby increasing the primary 
credit rate from 5 percent to 5.25 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 5.50 percent to 5.75 percent. The amendments 
to Regulation A reflect these rate changes.
    The 0.25 percentage point increase in the primary credit rate was 
associated with 0.25 percentage point increase in the target range for 
the federal funds rate (from a target range of 4\3/4\ percent to 5 
percent to a target range of 5 percent to 5\1/4\ percent) announced by 
the Federal Open Market Committee on May 3, 2023, 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

[[Page 30216]]

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.

    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 5.25 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 5.75 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.
Margaret McCloskey Shanks,
Deputy Secretary of the Board.
[FR Doc. 2023-10021 Filed 5-10-23; 8:45 am]
BILLING CODE 6210-02-P