[Federal Register Volume 82, Number 36 (Friday, February 24, 2017)]
[Rules and Regulations]
[Pages 11501-11502]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-03568]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 82, No. 36 / Friday, February 24, 2017 /
Rules and Regulations
[[Page 11501]]
FEDERAL RESERVE SYSTEM
12 CFR Part 209
[Regulation I; Docket No. R-1560]
RIN 7100-AE 68
Federal Reserve Bank Capital Stock
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Final rule.
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SUMMARY: The Board of Governors (Board) is publishing a final rule that
applies an inflation adjustment to the $10 billion total consolidated
asset threshold in Regulation I, which implements the provision of the
``Fixing America's Surface Transportation Act'' (FAST Act) that sets
the dividend rate that member banks with more than $10 billion in total
consolidated assets earn on their Federal Reserve Bank (Reserve Bank)
stock. The FAST Act requires that the Board annually adjust the $10
billion total consolidated asset threshold to reflect the change in the
Gross Domestic Product Price Index, published by the Bureau of Economic
Analysis. Based on the change in the Gross Domestic Product Price Index
as of September 29, 2016, the total consolidated asset threshold will
be $10,122,000,000 through December 31, 2017.
DATES: This final rule is effective March 27, 2017.
FOR FURTHER INFORMATION CONTACT: Evan Winerman, Counsel (202/872-7578),
Legal Division; or Kimberly Zaikov, Financial Project Leader (202/452-
2256), Reserve Bank Operations and Payments Systems Division. For users
of Telecommunications Device for the Deaf (TDD) only, contact (202)
263-4869.
SUPPLEMENTARY INFORMATION:
I. Background
Regulation I governs the issuance and cancellation of capital stock
by the Reserve Banks. Under section 5 of the Federal Reserve Act \1\
and Regulation I,\2\ a member bank must subscribe to capital stock of
the Reserve Bank of its district in an amount equal to six percent of
the member bank's capital and surplus. The member bank must pay for
one-half of this subscription on the date that the Reserve Bank
approves its application for capital stock, while the remaining half of
the subscription shall be subject to call by the Board.\3\
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\1\ 12 U.S.C. 287.
\2\ 12 CFR 209.4(a).
\3\ 12 U.S.C. 287 and 12 CFR 209.4(c)(2).
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Prior to January 1, 2016, all member banks were entitled to a six
percent dividend on their paid-in capital stock. As of January 1, 2016,
the FAST Act \4\ amended section 7(a)(1) of the Federal Reserve Act \5\
to provide that stockholders with more than $10 billion in total
consolidated assets shall receive a dividend on paid-in capital stock
equal to the lesser of six percent and ``the rate equal to the high
yield of the 10-year Treasury note auctioned at the last auction held
prior to the payment of such dividend,'' while stockholders with $10
billion or less in total consolidated assets shall continue to receive
a six percent dividend. The FAST Act also provides that the Board must
adjust the $10 billion threshold for total consolidated assets annually
to reflect the change in the Gross Domestic Product Price Index,
published by the Bureau of Economic Analysis.
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\4\ Public Law 114-94, 129 Stat. 1312 (2015). See https://www.congress.gov/114/bills/hr22/BILLS-114hr22enr.pdf/.
\5\ 12 U.S.C. 289(a)(1).
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On November 23, 2016, the Board published a final rule (FAST Act
Final Rule) in the Federal Register that amended Regulation I to
implement section 32203 of the FAST Act.\6\ Regulation I now includes
multiple references in Sec. Sec. 209.2, 209.3, and 209.4 to banks with
total consolidated assets of either ``$10,000,000,000 or more'' or
``less than $10,000,000,000.'' \7\ As required by the FAST Act,
Regulation I provides that all references to the $10 billion total
consolidated asset threshold shall be adjusted annually to reflect the
change in the Gross Domestic Product Price Index.\8\ The preamble to
the FAST Act Final Rule noted that ``[t]he Board expects to make this
adjustment using the final second quarter estimate of the Gross
Domestic Product Price Index for each year, published by the Bureau of
Economic Analysis.'' \9\
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\6\ 81 FR 84415 (Nov. 23, 2016). The final rule adopted, without
change, an interim final rule that the Board published in the
Federal Register on February 24, 2016 (81 FR 9082).
\7\ Regulation I defines ``total consolidated assets'' as ``the
total assets on the stockholder's balance sheet as reported by the
stockholder on its Consolidated Report of Condition and Income (Call
Report) as of the most recent December 31, except in the case of a
new member or the surviving stockholder after a merger `total
consolidated assets' means (until the next December 31 Call Report
becomes available) the total consolidated assets of the new member
or the surviving stockholder at the time of its application for
capital stock.'' 12 CFR 209.1(d)(3).
\8\ 12 CFR 209.4(f).
\9\ 81 FR at 84417.
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II. Adjustment
As of the effective date, the total consolidated asset threshold in
Regulation I shall be $10,122,000,000. This is based on the final
second quarter 2016 Gross Domestic Product Price Index estimate
published by Bureau of Economic Analysis (111.268), which is 1.22%
higher than the final second quarter 2015 Gross Domestic Product Price
Index estimate (109.922).
III. Administrative Law Matters
Administrative Procedure Act
Under the Administrative Procedure Act, notice and opportunity for
public comment are not required if the Board finds that notice and
public comment are impracticable, unnecessary, or contrary to the
public interest.\10\ The amendment in this document is technical and
applies the method previously set forth in the FAST Act Final Rule.\11\
For these reasons, the Board has determined that publishing a notice of
proposed rulemaking and providing opportunity for public comment are
unnecessary. Therefore, the amendments are adopted in final form.
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\10\ 5 U.S.C. 553(b)(B).
\11\ See 12 CFR 209.4(f).
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Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) does not apply to a rulemaking
where a general notice of proposed rulemaking is not required.\12\ As
noted previously,
[[Page 11502]]
the Board has determined that it is unnecessary 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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\12\ 5 U.S.C. 603 and 604.
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Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995,\13\ the
Board has reviewed this final rule. No collections of information
pursuant to the Paperwork Reduction Act are contained in the final
rule.
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\13\ 44 U.S.C. 3506; 5 CFR 1320.
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List of Subjects in 12 CFR Part 209
Banks and banking, Federal Reserve System, Reporting and
recordkeeping requirements, Securities.
Authority and Issuance
For the reasons set forth in the preamble, the Board amends
Regulation I, 12 CFR part 209, as follows:
PART 209--ISSUE AND CANCELLATION OF FEDERAL RESERVE BANK CAPITAL
STOCK (REGULATION I)
0
1. The authority citation for part 209 continues to read as follows:
Authority: 12 U.S.C. 12 U.S.C. 222, 248, 282, 286-288, 289,
321, 323, 327-328, and 466.
0
2. In part 209, remove all references to ``$10,000,000,000'' and add in
their place ``$10,122,000,000'', wherever they appear.
By order of the Board of Governors of the Federal Reserve
System, February 17, 2017.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2017-03568 Filed 2-23-17; 8:45 am]
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