[Federal Register Volume 61, Number 252 (Tuesday, December 31, 1996)]
[Proposed Rules]
[Pages 69054-69055]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-33159]
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FEDERAL RESERVE SYSTEM
12 CFR Part 204
[Regulation D, Docket No. R-0956]
Reserve Requirements of Depository Institutions
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Notice of proposed rulemaking.
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SUMMARY: In conjunction with a final rule printed elsewhere in today's
Federal Register, the Board of Governors of the Federal Reserve System
is proposing to amend its Regulation D regarding reserve requirements
of depository institutions issued pursuant to section 19 of the Federal
Reserve Act, in order further to reduce regulatory burden and simplify
and update requirements. This proposal would clarify the definition of
``savings deposit,'' consistent with comments the Board received on its
earlier proposal, and similarly clarify the definition of ``transaction
account'' and conform it to the amended definition of ``savings
deposit.'' This proposal is in accordance with the Board's policy of
regular review of its regulations and the Board's review of its
regulations under section 303 of the Riegle Community Development and
Regulatory Improvement Act of 1994.
DATES: Comments must be received by February 4, 1997.
ADDRESSES: Comments should be directed to William W. Wiles, Secretary,
Board of Governors of the Federal Reserve System, 20th Street and
Constitution Avenue, NW., Washington, DC 20551, Attention: Docket No.
R-0956, or delivered to Room B-2222, Eccles Building, between 8:45 a.m.
and 5:15 p.m. Comments may be inspected in Room MP-500 between 9:00
a.m. and 5:00 p.m. weekdays, except as provided in Sec. 261.8 of the
Board of Governors' rules regarding availability of information, 12 CFR
261.8.
FOR FURTHER INFORMATION CONTACT: Ann Owen, Economist, Division of
Monetary Affairs (202/736-5671); Sue Harris, Economist, Division of
Research and Statistics (202/452-3490); Rick Heyke, Staff Attorney,
Legal Division (202/452-3688). For the hearing impaired only,
Telecommunications Device for the Deaf (TDD), Earnestine Hill or
Dorothea Thompson (202/452-3544).
SUPPLEMENTARY INFORMATION:
Background
The Board of Governors of the Federal Reserve System (Board)
published a notice of proposed rulemaking in the Federal Register on
June 17, 1996 (61 FR 30545) that solicited comments on proposed
amendments to its Regulation D, Reserve Requirements of Depository
Institutions (12 CFR Part 204). The Board received nine comments
suggesting that the Board clarify the definition of ``savings
deposit,'' and a number of them also suggested that the Board rewrite
the definitions of ``time deposit,'' ``demand deposit,'' and/or
``transaction account.'' One commenter suggested the use of bullet
points to distinguish limitations on transfers from exceptions to such
limitations. Two commenters appended suggested language designed to
clarify the definition of savings account, principally by shortening
the sentences.
In response to these comments, the Board is proposing to amend the
definition of ``savings deposit'' in an effort to clarify it. The
proposal similarly would amend the definition of ``transaction
account'' to clarify it and to conform it to the amended definition of
``savings deposit.'' The amendments are intended to be nonsubstantive
and would codify certain Board and staff interpretations. For example,
the proposal makes clear that a transfer ordered by messenger does
count against the limitation on transfers applicable to savings
accounts if the messenger is in the employ of, or acting as agent of,
the depository institution. The proposal also clarifies that transfers
from savings accounts to repay overdrafts do not benefit from the
exception for transfers to repay loans and associated expenses at the
same depository institution. The proposal distinguishes more clearly
between transfers from savings accounts subject to both the 6 per month
and the 3 per month limitations and those subject only to the 6 per
month limitation by specifying that the 6 per month limitation applies
to preauthorized transfers, telephone and data transmission orders,
checks, drafts, debit cards and similar orders to the depository
institution whether given directly to the depository institution by the
depositor or delivered to the depository institution through and
payable to third parties. In contrast, the 3 per month limitation
applies to transfers made by check, draft, debit card, or similar order
to the depository institution delivered through and payable to third
parties. Home banking transfers remain subject to the six per month
limitation.
Initial Regulatory Flexibility Analysis
The Regulatory Flexibility Act (5 U.S.C. 601-612) requires an
agency to publish an initial regulatory flexibility analysis with any
notice of proposed rulemaking. Two of the requirements of an initial
regulatory flexibility analysis (5 U.S.C. 603(b))--a description of the
reasons why action by the agency is being considered and a statement of
the objectives of, and legal basis for, the proposed rule--are
contained in ``Background'' above. The proposed rules require no
additional reporting or recordkeeping requirements and do not overlap
with other federal rules.
Another requirement for the initial regulatory flexibility analysis
is a
[[Page 69055]]
description of and, where feasible, an estimate of the number of small
entities to which the proposed rule will apply. The proposal will apply
to all depository institutions regardless of size.
The amendments are burden-reducing. Therefore, the Board believes
that the amendments will not have a significant adverse economic impact
on a substantial number of small entities.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act notice of 1995 (44
U.S.C. Ch. 3506; 5 CFR Part 1320, Appendix A.1), the Board has reviewed
the rule under the authority delegated to the Board by the Office of
Management and Budget. No collection of information pursuant to the
Paperwork Reduction Act is contained in the rule.
List of Subjects in 12 CFR Part 204
Banks, banking, Federal Reserve System, Reporting and recordkeeping
requirements.
Authority and Issuance
For the reasons set forth in the preamble, the Board proposes to
amend part 204 of chapter II of title 12 as follows:
PART 204--RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS
(REGULATION D)
1. The authority citation for part 204 continues to read as
follows:
Authority: 12 U.S.C. 248(a), 248(c), 371a, 461, 601, 611, and
3105.
2. Section 204.2 is amended as follows:
a. Paragraphs (b)(2) and (b)(3)(ii)(A) are amended by removing
``paragraph (d)(2) of this section'' and adding in its place
``paragraph (d) of this section''.
b. Paragraph (d) is revised.
c. In the introductory text of paragraph (e) and in paragraphs
(e)(2), (e)(3), and (e)(4), all references to ``paragraph (d)(2) of
this section'' are revised to read ``paragraph (d) of this section''.
d. Paragraph (e)(4) is further amended by removing ``another
account of the depositor at the same institution (including transaction
account)'' and adding in its place ``another account of the depositor
(including a transaction account)'', and by removing the third and
fourth sentences in their entirety. The revision reads as follows:
Sec. 204.2 Definitions.
* * * * *
(d)(1) Savings deposit means a deposit or account--
(i) With respect to which the depositor may be (but is not
ordinarily) required by the depository institution to give written
notice of an intended withdrawal not less than seven days before
withdrawal is made;
(ii) That is not payable on a specified date, or after a specified
period of time after the date of deposit;
(iii) From which the depositor is limited to no more than six
transfers per month (or similar period of at least four weeks) to
another account (including a transaction account) of the depositor or
to a third party, by means of a preauthorized transfer, a telephone or
data transmission order, or a check, draft, debit card, or similar
order to the depository institution whether given directly to the
depository institution by the depositor or delivered to the depository
institution through and payable to third parties; and
(iv) From which no more than three of such six transfers may be
made by check, draft, debit card, or similar order to the depository
institution by the depositor delivered to the depository institution
through and payable to third parties.4
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\4\ In order to ensure that no more than the permitted number of
withdrawals or transfers are made, for an account to come within the
definition in paragraph (d) of this section, a depository
institution must either:
(a) Prevent withdrawals or transfers of funds from this account
that are in excess of the limits established by paragraph (d) of
this section, or
(b) Adopt procedures to monitor those transfers on an ex post
basis and contact customers who exceed the established limits on
more than an occasional basis.
For customers who continue to violate those limits after they
have been contacted by the depository institution, the depository
institution must either close the account and place the funds in
another account that the depositor is eligible to maintain, or take
away the transfer and draft capacities of the account.
An account that authorizes withdrawals or transfers in excess of
the permitted number is a transaction account regardless of whether
the authorized number of transactions are actually made. For
accounts described in paragraph (d) of this section, the institution
at its option may use, on a consistent basis, either the date on the
check, draft, or similar item, or the date the item is paid in
applying the limits imposed by that section.
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(2) The limitations in paragraph (d)(1) of this section do not
apply to:
(i) Transfers from a savings account for the purpose of repaying
loans (other than overdrafts on a transaction account) and associated
expenses at the same depository institution (as originator or
servicer);
(ii) Transfers of funds from a savings account to another account
of the same depositor at the same institution when the transfers are
requested by mail, by messenger (not in the employ of or acting as
agent of the depository institution), at an automated teller machine,
or in person at an office of the depository institution;
(iii) Withdrawals from a savings account when such withdrawals are
requested by mail, by messenger (not in the employ of, or acting as
agent of, the depository institution), or at an automated teller
machine, or in person at an office of the depository institution; or
(iv) Withdrawals requested by telephone or data transmission and
paid by means of a check mailed to the depositor.
(3)(i) A preauthorized transfer means any transfer from the account
of the depositor by the depository institution to pay a third party:
(A) Upon written or oral instruction to the institution (including
any order received through an automated clearing house (ACH)); or
(B) At a predetermined time or on a fixed schedule.
(ii) A withdrawal means any payment to the depositor.
(4) Savings deposit does not include funds deposited to the credit
of the depository institution's own trust department where the funds
involved are utilized to cover checks or drafts. Such funds are
transaction accounts.
* * * * *
By order of the Board of Governors of the Federal Reserve
System, December 24, 1996.
William W. Wiles,
Secretary of the Board.
[FR Doc. 96-33159 Filed 12-30-96; 8:45 am]
BILLING CODE 6210-01-P
