[Federal Register Volume 88, Number 134 (Friday, July 14, 2023)]
[Rules and Regulations]
[Pages 45057-45058]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-14637]


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FEDERAL RESERVE SYSTEM

12 CFR Part 204

[Docket No. R-1810]
RIN 7100-AG61


Regulation D: Reserve Requirements of Depository Institutions

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Final rule; technical amendments.

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SUMMARY: The Board of Governors of the Federal Reserve System 
(``Board'') is amending two sections of Regulation D to conform the 
provisions to prior regulatory amendments.

DATES: Effective date: This rule (amendments to part 204 (Regulation 
D)) is effective July 14, 2023.

FOR FURTHER INFORMATION CONTACT: Sophia H. Allison, Senior Special 
Counsel (202-452-3565), Legal Division; 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: 

I. Statutory and Regulatory Background

    For monetary policy purposes, section 19 of the Federal Reserve Act 
(``Act'') requires the Board to impose reserve requirements on certain 
types of deposits and other liabilities of depository institutions 
within ratios specified by the Act.\1\ The Board's Regulation D 
implements section 19 of the Act.\2\
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    \1\ 12 U.S.C. 461(b).
    \2\ Regulation D (12 CFR part 204). In March 2020, the Board set 
all reserve requirement ratios to zero percent. See Interim final 
rule (Regulation D), 85 FR 16525 (Mar. 24, 2020); Final rule 
(Regulation D), 86 FR 8853 (Feb. 10, 2021).
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II. Amendments to Regulation D

    Three of the definitions in Regulation D--footnote 3 to the 
definition of ``time deposit,'' footnote 6 to the definition of 
``nonpersonal time deposit,'' and footnote 11 to the definition of 
``international banking facility time deposit or IBF time deposit''--
refer to liabilities maintained by depository institutions for ``[a]ny 
other foreign, international, or supranational entity specifically 
designated by the Board.'' \3\ The foreign, international, or 
supranational entities specifically designated by the Board for these 
purposes are set forth at 12 CFR 204.125 of Regulation D as an 
interpretation of the regulation.\4\ This interpretation was originally 
promulgated as Sec.  217.126 of former Regulation Q (Prohibition 
Against Payment of Interest on Demand Deposits).\5\ The interpretation 
was deleted from Regulation Q and redesignated as Sec.  204.125 of 
Regulation D in 1987.\6\ However, while the references to the 
interpretation in footnotes 3 and 11 of Regulation D were updated to 
refer to Sec.  204.125 instead of Sec.  217.126, the reference in 
footnote 6 (formerly footnote 8) of Regulation D was not and continues 
to refer to Sec.  217.126 instead of referring to Sec.  204.125.\7\ 
Accordingly, footnote 6 of Regulation D is amended to refer to Sec.  
204.125 instead of Sec.  217.126 in order to conform the provision to 
Regulation D amendments finalized in 1987.
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    \3\ 12 CFR 204.2(c)(1)(iii)(E) n. 3 (definition of ``time 
deposit''); 12 CFR 204.2(f)(1)(iv)(E) n.6 (definition of 
``nonpersonal time deposit''); 12 CFR 204.8(a)(2)(i)(B)(5) n.11 
(definition of ``international banking facility time deposit or IBF 
time deposit'').
    \4\ ``Foreign, international, and supranational entities 
referred to in Sec. Sec.  204.2(c)(1)(iv)(E) and 
204.8(a)(2)(i)(B)(5),'' 12 CFR 204.125.
    \5\ Entities Exempt From Interest Rate Limitations (Regulation 
Q), 35 FR 1156 (Jan. 29, 1970). In 2010, Regulation Q was repealed 
as a result of the repeal of former section 19(i) of the Act. Final 
rule (Regulations D, Q, and DD), 76 FR 42015 (July 18, 2011).
    \6\ Recission and revision of interpretations; technical 
amendments of regulation (Regulations D and Q), 52 FR 47689, 47695 
(Dec. 16, 1987) (redesignating 12 CFR 217.126 of former Regulation Q 
as 12 CFR 204.125 of Regulation D).
    \7\ Current footnote 3 (formerly footnote 4) of Regulation D was 
amended to refer to Sec.  204.125 in 1987. Recission and revision of 
interpretations; technical amendments of regulation (Regulations D 
and Q), 52 FR 47689, 47695 (Dec. 16, 1987). Current footnote 11 
(formerly footnote 14) was amended to refer to Sec.  204.125 in 
1991. Final rule (Regulation D), 56 FR 15493, 15495 (Apr. 17, 1991). 
Footnote 4 was redesignated to its current position as footnote 3, 
footnote 8 was redesignated to its current position as footnote 6, 
and footnote 14 was redesignated to its current position as footnote 
11 in 1996. Final rule (Regulation D), 61 FR 69020, 69025 (Dec. 31, 
1996).
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    In addition, the heading and the introductory text of the 
interpretation set forth at 12 CFR 204.125 require two amendments to 
conform the interpretation to prior regulatory amendments. In 12 CFR 
204.125, the

[[Page 45058]]

heading currently reads ``Sec.  204.125 Foreign, international, and 
supranational entities referred to in Sec. Sec.  204.2(c)(1)(iv)(E) and 
204.8(a)(2)(i)(B)(5)'' and the introductory text reads ``The entities 
referred to in Sec. Sec.  204.2(c)(1)(iv)(E) and 204.8(a)(2)(i)(B)(5) 
are:''.
    First, the references to Sec.  204.2(c)(1)(iv)(E) in the heading 
and the introductory text are amended to refer to Sec.  
204.2(c)(1)(iii)(E) in order to conform the heading and the 
introductory text to Regulation D amendments finalized in 2020.\8\ 
Second, the heading and the introductory text are amended to add a 
reference to the definition of ``nonpersonal time deposit,'' 12 CFR 
204.2(f)(1)(iv)(E), to conform the heading and the introductory text to 
Regulation D amendments finalized in 1991.\9\
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    \8\ Interim final rule (Regulation D), 85 FR 23445, 23447 (Apr. 
28, 2020) (deleting Sec.  204.2(c)(1)(ii) and redesignating Sec.  
204.2(c)(1)(iv) as Sec.  204.2(c)(1)(iii)).
    \9\ Final rule (Regulation D), 56 FR 15493, 15495 (Apr. 17, 
1991) (amending heading and introductory text of Sec.  204.125 to 
refer to Sec. Sec.  204.2(c)(1)(iv)(E) and 204.8(a)(2)(i)(B)(5)).
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III. Administrative Procedure Act

    In general, the Administrative Procedure Act (``APA'') \10\ 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.'' \11\ 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.\12\
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    \10\ 5 U.S.C. 551 et seq.
    \11\ 5 U.S.C. 553(b)(3)(B).
    \12\ 5 U.S.C. 553(d).
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    The Board has determined that good cause exists for finding that 
the notice, public comment, and delayed effective date provisions of 
the APA are unnecessary, impracticable, or contrary to the public 
interest with respect to these final amendments to Regulation D. The 
amendments are technical in nature and do not change any of the 
substantive provisions of the rule. Notice, public comment, and a 
delayed effective date under these circumstances would not serve any 
useful purpose. Accordingly, the Board has determined that good cause 
exists to dispense with the notice, public comment, and delayed 
effective date procedures of the APA with respect to these final 
amendments to Regulation D.

IV. Regulatory Flexibility Analysis

    The Regulatory Flexibility Act (``RFA'') does not apply to a 
rulemaking where a general notice of proposed rulemaking is not 
required.\13\ As noted previously, 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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    \13\ 5 U.S.C. 603, 604.
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V. Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act (``PRA'') of 
1995,\14\ 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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    \14\ 44 U.S.C. 3506; see 5 CFR part 1320, appendix A.1.
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List of Subjects in 12 CFR Part 204

    Banking, Banks, Reporting and recordkeeping requirements.

Authority and Issuance

    For the reasons set forth in the preamble, the Board amends 12 CFR 
part 204 as follows:

PART 204--RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS 
(REGULATION D)

0
1. The authority citation for part 204 continues to read as follows:

    Authority: 12 U.S.C. 248(a), 248(c), 461, 601, 611, and 3105.


0
2. Section 204.2 is amended by revising paragraph (f)(1)(iv)(E) to read 
as follows:


Sec.  204.2  Definitions.

* * * * *
    (f) * * *
    (iv) * * *
    (E) Any other foreign, international, or supranational entity 
specifically designated by the Board.\6\
* * * * *
    \6\ The designated entities are specified in 12 CFR 204.125.
* * * * *

0
3. Section 204.125 is amended by revising the section heading and 
introductory text to read as follows:


Sec.  204.125  Foreign, international, and supranational entities 
referred to in Sec. Sec.  204.2(c)(1)(iii)(E) and (f)(1)(iv)(E) and 
204.8(a)(2)(i)(B)(5).

    The entities referred to in Sec. Sec.  204.2(c)(1)(iii)(E) and 
(f)(1)(iv)(E) and 204.8(a)(2)(i)(B)(5) are:
* * * * *

    By order of the Board of Governors of the Federal Reserve 
System, acting through the Secretary of the Board under delegated 
authority.
Ann Misback,
Secretary of the Board.
[FR Doc. 2023-14637 Filed 7-13-23; 8:45 am]
BILLING CODE 6210-01-P