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FE D E R A L R E S E R V E BANK OF N E W YORK j"Circular No. 6 5 5 9 1 L June 23, 1970 J AM ENDED SUPPLEMENT TO REGULATION Q Maximum Rates Suspended on Certain Single-Maturity Time Deposits To the M em ber Banks of th e Second F ederal R eserve D istrict: Following is the text of a statement issued today by the Board of Governors of the Federal Reserve System: The Board of Governors of the Federal Reserve System today suspended, effective tom orrow (W ednesday, June 24), ceilings on interest rates payable by m em ber banks on certificates of deposit and other single-m aturity time deposits in denom inations of $ 100,000 or more w ith m aturities of 30 through 89 days. Prior to the suspension, w hich will rem ain in effect until further action by the Board, the ceilings on such deposits had been 6V4 per cent for m aturities of 30-59 days and 6V2 per cent for m aturities of 60-89 days. In taking the action, the Board recognized that there could be unusual dem ands upon commercial banks for short-term credit accommodation as a consequence of current uncertainties in financial markets. If this occurs, such increases in bank loans would not constitute an increase in total credit flows, to the extent that they simply represented a transfer of borrowings from other financing avenues, as for example the commercial paper market. U nder these circumstances, appropriate accommodations in bank lending, the Board said, would be a constructive elem ent in the process of adjustm ent to changing financial conditions and would not interfere w ith the continuing objective of curbing inflation. T he Board’s action was taken after consultation with the Federal D eposit Insurance Corporation and the Federal Home Loan Bank Board. No change was m ade in the ceilings applicable to longer-term certificates of deposit of $100,000 or more, which rem ain at 6% per cent for m aturities of 90-179 days, 7 p er cent for 180 days to one year, and IVz per cent for one year or more. Likewise, no change was m ade in the ceilings on savings deposits or time deposits (including certificates of deposit) of less than $ 100,000, on w hich the maximum rates payable range from 4x /2to 5% per cent. Enclosed is a copy of the Board’s Supplement to Regulation Q, as amended effective June 24, 1970, reflecting the above change. Additional copies of the enclosure will be furnished upon request. A lfred H ayes, President. B o ard o f G o v er n o r s o f t h e F e d e r a l R eser v e Sy st e m SUPPLEMENT TO REGULATION Q As am ended effective June 24,1970 SECTION 217.7 — MAXIMUM RATES O F IN TEREST PAYABLE BY M EM BER BANKS ON TIM E AND SAVINGS DEPOSITS Pursuant to the provisions of section 19 of the Federal Reserve Act and § 217.3, the Board of Governors of the Federal Reserve System hereby prescribes the following maximum rates1 of interest per annum payable by mem ber banks of the Federal Reserve System on time and savings deposits: (a) Single m aturity time deposits. (1) Deposits of $100,000 or more. No m em ber bank shall pay interest on any single m atu rity time deposit of $100,000 or m ore at a rate in excess of the applicable rate under the fol lowing schedule: M atu rity 30-89 days M axim um p e r cen t (2) Deposits of less than $100,000. No m em ber bank shall pay interest on any single m aturity time deposit of less than $100,000 at a rate in excess of the applicable rate under the following schedule: M atu rity M axim um p e r cen t 30 days or more b u t less than 1 year 5 1 year or m ore but less than 2 years 5^ 2 years or more 5 3A (b) M ultiple m aturity tim e deposits. No m em ber bank shall pay interest on a m ultiple m aturity time deposit at a rate in excess of the applicable rate under the following schedule: No maximum presently prescribed M aturity intervals M axim um p e r cen t 90-179 days 6% 30 days or more but less than 90 days 4 y2 180 days or m ore b u t less than 1 year 7 90 days or more but less than 1 year 5 1 year or more 1 The limitations on rates of interest payable by member banks of the Federal Reserve System on time and savings deposits, as prescribed herein, are not applicable to any deposit which is payable only at an office of a member bank located outside the States of the United States and the District of Columbia. 1 year or m ore b u t less than 2 years 5^ 2 years or more 53/4 (c) Savings deposits. No m em ber bank shall pay interest at a rate in excess of W z per cent on any savings deposit. P R I N T E D IN N E W Y O R K
@FedFRASER