[Federal Register Volume 80, Number 246 (Wednesday, December 23, 2015)]
[Rules and Regulations]
[Pages 79671-79673]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-32295]
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FEDERAL RESERVE SYSTEM
12 CFR Part 201
[Docket No. R-1528; Regulation A]
RIN 7100-AE42
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: The amendments to part 201 (Regulation A) are effective December
23, 2015. The rate changes for primary and secondary credit were
applicable on December 17, 2015, as specified in 12 CFR 201.51, as
amended.
FOR FURTHER INFORMATION CONTACT: Stephanie Martin, Associate General
Counsel (202/452-3198), or Clinton N. Chen, Attorney (202-452-3952),
Legal Division, or Lyle Kumasaka, Senior Financial Analyst (202-452-
2382); 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 the review and determination of
the Board.
The Board approved requests by the Reserve Banks to increase by \1/
4\ percentage point the primary credit rate in effect at each of the
twelve Federal Reserve Banks, thereby increasing from 0.75 percent to
1.00 percent the rate that each Reserve Bank charges for extensions of
primary credit. In addition, the Board had previously approved requests
by the Reserve Banks to renew the formula for the secondary credit
rate, the primary credit rate plus
[[Page 79672]]
50 basis points. Under the formula, the secondary credit rate in effect
at each of the twelve Federal Reserve Banks increased by \1/4\
percentage point as a result of the Board's primary credit rate action,
thereby increasing from 1.25 percent to 1.50 percent the rate that each
Reserve Bank charges for extensions of secondary credit. The amendments
to Regulation A reflect these rate changes.
The \1/4\ percentage point increase in the primary credit rate was
associated with an increase in the target range for the federal funds
rate (from a target range of 0 to \1/4\ percent to a target range of
\1/4\ to \1/2\ percent) announced by the Federal Open Market Committee
(``Committee'') on December 16, 2015. A press release announcing these
actions indicated that:
Information received since the Federal Open Market Committee met
in October suggests that economic activity has been expanding at a
moderate pace. Household spending and business fixed investment have
been increasing at solid rates in recent months, and the housing
sector has improved further; however, net exports have been soft. A
range of recent labor market indicators, including ongoing job gains
and declining unemployment, shows further improvement and confirms
that underutilization of labor resources has diminished appreciably
since early this year. Inflation has continued to run below the
Committee's 2 percent longer-run objective, partly reflecting
declines in energy prices and in prices of non-energy imports.
Market-based measures of inflation compensation remain low; some
survey-based measures of longer-term inflation expectations have
edged down.
Consistent with its statutory mandate, the Committee seeks to
foster maximum employment and price stability. The Committee
currently expects that, with gradual adjustments in the stance of
monetary policy, economic activity will continue to expand at a
moderate pace and labor market indicators will continue to
strengthen. Overall, taking into account domestic and international
developments, the Committee sees the risks to the outlook for both
economic activity and the labor market as balanced. Inflation is
expected to rise to 2 percent over the medium term as the transitory
effects of declines in energy and import prices dissipate and the
labor market strengthens further.
Administrative Procedure Act
The notice, public comment, and delayed effective date requirements
of 5 U.S.C. 553 is inapplicable ``to the extent that there is involved
. . . a matter relating to agency management or personnel or to public
property, loans, grants, benefits, or contracts.'' \1\ This rulemaking
involves a matter relating to loans, as the Board is revising the
interest rates that the twelve Federal Reserve Banks charge for
extensions of credit under the primary and secondary credit programs.
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\1\ 5 U.S.C. 553(a)(2) (emphasis added).
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Furthermore, the Board has determined that delaying implementation
of the changes in the primary and secondary credit rates in order to
allow notice and public comment would be unnecessary and contrary to
the public interest. Therefore, the Board has found good cause to not
follow the provisions of 5 U.S.C. 553(b) relating to notice and public
participation. The Board's revisions to these rates were taken with a
view to accommodating commerce and business and with regard to their
bearing upon the general credit situation of the country. Notice and
public participation would prevent the Board's action from being
effective as promptly as necessary in the public interest. Seeking
notice and comment on the rate changes would not aid the persons
affected and would otherwise serve no useful purpose. For these same
reasons, the Board also has found good cause not to provide 30 days
prior notice of the effective date of the rule under 5 U.S.C. 553(d).
Regulatory Flexibility Analysis
The Regulatory Flexibility Act (``RFA'') does not apply to a
rulemaking where a general notice of proposed rulemaking is not
required.\2\ 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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\2\ 5 U.S.C. 603 and 604.
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Paperwork Reduction Act
In accordance with the Paperwork Reduction Act (``PRA'') of 1995
(44 U.S.C. 3506; 5 CFR part 1320 Appendix A.1), 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.
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.\1\
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\1\ 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 rates for primary credit provided
to depository institutions under Sec. 201.4(a) are:
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Federal reserve bank Rate Effective
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Boston............................. 1.00 December 17, 2015.
New York........................... 1.00 December 17, 2015.
Philadelphia....................... 1.00 December 17, 2015.
Cleveland.......................... 1.00 December 17, 2015.
Richmond........................... 1.00 December 17, 2015.
Atlanta............................ 1.00 December 17, 2015.
Chicago............................ 1.00 December 17, 2015.
St. Louis.......................... 1.00 December 17, 2015.
Minneapolis........................ 1.00 December 17, 2015.
Kansas City........................ 1.00 December 17, 2015.
Dallas............................. 1.00 December 17, 2015.
San Francisco...................... 1.00 December 17, 2015.
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[[Page 79673]]
(b) Secondary credit. The interest rates for secondary credit
provided to depository institutions under Sec. 201.4(b) are:
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Federal reserve bank Rate Effective
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Boston............................. 1.50 December 17, 2015.
New York........................... 1.50 December 17, 2015.
Philadelphia....................... 1.50 December 17, 2015.
Cleveland.......................... 1.50 December 17, 2015.
Richmond........................... 1.50 December 17, 2015.
Atlanta............................ 1.50 December 17, 2015.
Chicago............................ 1.50 December 17, 2015.
St. Louis.......................... 1.50 December 17, 2015.
Minneapolis........................ 1.50 December 17, 2015.
Kansas City........................ 1.50 December 17, 2015.
Dallas............................. 1.50 December 17, 2015.
San Francisco...................... 1.50 December 17, 2015.
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* * * * *
By order of the Board of Governors of the Federal Reserve
System, December 18, 2015.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2015-32295 Filed 12-22-15; 8:45 am]
BILLING CODE 6210-02-P