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REPORT TO CONGRESS

107th

Annual Report of the Board of
Governors of the Federal Reserve System

2020

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

REPORT TO CONGRESS

107th

Annual Report of the Board of
Governors of the Federal Reserve System

2020

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

Contents
About the Federal Reserve ........................................................................................... vii
1 Overview ....................................................................................................................... 1
2 Monetary Policy and Economic Developments ..................................................... 3
February 2021 Summary ................................................................................................... 3
June 2020 Summary ........................................................................................................ 8

3 Financial Stability ..................................................................................................... 15
Monitoring Risks to Financial Stability .............................................................................. 15
Domestic and International Cooperation and Coordination ................................................. 23

4 Supervision and Regulation .................................................................................... 25
Supervised and Regulated Institutions ............................................................................. 26
Supervisory Developments .............................................................................................. 29
Regulatory Developments ................................................................................................ 48

5 Payment System and Reserve Bank Oversight ................................................... 55
Payment Services to Depository and Other Institutions ...................................................... 56
Currency and Coin .......................................................................................................... 61
Fiscal Agency and Government Depository Services .......................................................... 62
Evolutions and Improvements to the System ..................................................................... 66
Oversight of Federal Reserve Banks ................................................................................. 69
Pro Forma Financial Statements for Federal Reserve Priced Services ................................. 75

6 Consumer and Community Affairs ......................................................................... 81
Consumer Compliance Supervision .................................................................................. 82
Consumer Laws and Regulations ..................................................................................... 94
Consumer Research and Analysis of Emerging Issues and Policy ........................................ 97
Community Development ............................................................................................... 102

Appendixes
A Federal Reserve System Organization ................................................................ 107
Board of Governors ....................................................................................................... 107
Federal Open Market Committee .................................................................................... 115
Board of Governors Advisory Councils ............................................................................ 117
Federal Reserve Banks and Branches ............................................................................ 121

B Minutes of Federal Open Market Committee Meetings .................................. 145
Meeting Minutes .......................................................................................................... 145

C Federal Reserve System Audits ........................................................................... 147
Office of Inspector General Activities .............................................................................. 147
Government Accountability Office Reviews ...................................................................... 149

D Federal Reserve System Budgets ....................................................................... 151
System Budgets Overview ............................................................................................. 151

107th Annual Report | 2020

Board of Governors Budgets .......................................................................................... 155
Federal Reserve Banks Budgets .................................................................................... 162
Currency Budget ........................................................................................................... 168

E Record of Policy Actions of the Board of Governors ........................................ 173
Rules and Regulations .................................................................................................. 173
Policy Statements and Other Actions .............................................................................. 185
Special Facilities ........................................................................................................... 192
Discount Rates for Depository Institutions in 2020 ......................................................... 200
The Board of Governors and the Government Performance and Results Act ....................... 202

F Litigation .................................................................................................................. 203
Pending ....................................................................................................................... 203
Resolved ...................................................................................................................... 203

G Statistical Tables .................................................................................................... 205

vii

About the Federal Reserve
The Federal Reserve was created by an act of Congress on December 23, 1913, to provide the
nation with a safer, more flexible, and more stable monetary and financial system. In establishing
the Federal Reserve System, the United States was divided geographically into 12 Districts, each
with a separately incorporated Reserve Bank.
For more information about the Federal Reserve Board and the Federal Reserve System, visit the
Board’s website at https://www.federalreserve.gov/aboutthefed/default.htm. Online versions of
the Board’s annual report are available at https://www.federalreserve.gov/publications/annualreport/default.htm.

Overview

This report covers the calendar-year 2020 operations and activities of the Federal Reserve, the
central bank of the United States (see figure 1.1), categorized in the five key functional areas:
• Conducting monetary policy and monitoring economic developments. Section 2 provides
adapted versions of the Board’s semiannual Monetary Policy Reports to Congress.
• Promoting financial system stability. Section 3 reviews Board and System activities and
research undertaken to foster a resilient and stable financial system.
• Supervising and regulating financial institutions and their activities. Section 4 summarizes
the Board’s efforts related to financial institution oversight and examinations, supervisory policymaking, and regulatory activities and enforcement.
• Fostering payment and settlement system safety and efficiency. Section 5 describes actions
by the Board and Reserve Banks to promote the effectiveness of the nation’s payment systems,
discusses initiatives to promote payment system safety, and provides data on Reserve Bank
services and income.
• Promoting consumer protection and community development. Section 6 provides information
on the Board’s efforts to promote a fair and transparent financial services market for consumers, protect consumer rights, and ensure that Board policies and research take consumer
and community perspectives into account.

Figure 1.1. The Federal Reserve System’s unique structure ensures broad perspective
The Federal Reserve System consists of 12 Reserve Banks located in major cities throughout the United States, along
with a seven-member Board of Governors headquartered in Washington, D.C. See “Federal Reserve System Organization” in appendix A for more information on the Board and System leadership.

9
Minneapolis

7
10

San Francisco

Cleveland

Chicago

Alaska

Hawaii
Guam

New York
Philadelphia
(Board of Governors)

St. Louis

Richmond

5
6

Boston

Washington, D.C.

Kansas City

2
3

Atlanta

Dallas

Puerto Rico
Virgin Islands

107th Annual Report | 2020

Additional information for calendar-year 2020 on Federal Reserve leadership, policy actions, budgets as well as historical data and supporting activities can be found in the appendixes:
• Appendix A lists key officials across the Federal Reserve System
• Appendix B provides links to the minutes for each of the eight regularly scheduled meetings of
the Federal Open Market Committee
• Appendix C contains information on the Federal Reserve’s audited financial statements as well
as reviews conducted by the Office of Inspector General and the Government Accountability Office
• Appendix D presents information on the budgets for the Board and Reserve Banks and on
currency-related costs
• Appendix E summarizes policy actions of the Board of Governors
• Appendix F lists litigation, both pending and resolved, that the Board of Governors was a
party in
• Appendix G includes statistical tables that provide updated historical data concerning Board and
System operations and activities

Monetary Policy and Economic
Developments

The Federal Reserve conducts the nation’s monetary policy to promote maximum employment,
stable prices, and moderate long-term interest rates in the U.S. economy. This section reviews
U.S. monetary policy and economic developments in 2020, with excerpts and select figures from
the Monetary Policy Report published in February 2021 and June 2020.1 The report, submitted
semiannually to the Congress, is delivered concurrently with testimony from the Federal Reserve
Board Chair.2

February 2021 Summary
The COVID-19 pandemic continues to weigh heavily on economic activity and labor markets in the
United States and around the world, even as the ongoing vaccination campaigns offer hope for a
return to more normal conditions later this year. While unprecedented fiscal and monetary
stimulus and a relaxation of rigorous social-distancing restrictions supported a rapid rebound in
the U.S. labor market last summer, the pace of gains has slowed and employment remains well
below pre-pandemic levels. In addition, weak aggregate demand and low oil prices have held down
consumer price inflation. In this challenging environment, the Federal Open Market Committee
(FOMC) has held its policy rate near zero and has continued to purchase Treasury securities and
agency mortgage-backed securities to support the economic recovery. These measures, along with
the Committee’s strong guidance on interest rates and the balance sheet, will ensure that monetary policy will continue to deliver powerful support to the economy until the recovery is complete.

Economic and Financial Developments
Economic activity and the labor market. The initial wave of COVID-19 infections led to a historic
contraction in economic activity as a result of both mandatory restrictions and voluntary changes
in behavior by households and businesses. The level of gross domestic product (GDP) fell a cumulative 10 percent over the first half of 2020, and the measured unemployment rate spiked to a
post–World War II high of 14.8 percent in April. As mandatory restrictions were subsequently
relaxed and households and firms adapted to pandemic conditions, many sectors of the economy
recovered rapidly and unemployment fell back. Momentum slowed substantially in the late fall and

Those complete reports are available on the Board’s website at https://www.federalreserve.gov/monetarypolicy/files/
20210219_mprfullreport.pdf (February 2021) and https://www.federalreserve.gov/monetarypolicy/files/
20200612_mprfullreport.pdf (June 2020).
As required by section 2B of the Federal Reserve Act, the Federal Reserve Board submits written reports to the Congress
that contain discussions of “the conduct of monetary policy and economic developments and prospects for the future.”

107th Annual Report | 2020

early winter, however, as spending on many

Figure 2.1. Nonfarm payroll employment

services contracted again amid a worsening of
the pandemic. All told, GDP is currently esti-

Millions of jobs

Monthly

mated to have declined 2.5 percent over the
155

four quarters of last year and payroll employ-

150

ment in January was almost 10 million jobs

145

below pre-pandemic levels, while the unem-

140

2006

2009

2012

2015

2018

135

ployment rate remained elevated at 6.3 per-

130

cent and the labor force participation rate was

125

severely depressed (figure 2.1). Job losses
have been most severe and unemployment

2021

remains particularly elevated among His-

Source: Bureau of Labor Statistics via Haver Analytics.

panics, African Americans, and other minority
groups as well as those who hold lower-wage
jobs (figure 2.2).

Inflation. After declining sharply as the pandemic struck, consumer price inflation rebounded along
with economic activity, but inflation remains below pre-COVID levels and the FOMC’s longer-run
objective of 2 percent. The 12-month measure of personal consumption expenditures inflation was

Figure 2.2. Unemployment rate, by race and ethnicity

Monthly

Percent
20
18

Black or African American

16
14
12
Hispanic or Latino

10
White

8
6

Asian

4
2
2005

2007

2009

2011

2013

2015

2017

2019

2021

Note: Unemployment rate measures total unemployed as a percentage of the labor force. Persons whose ethnicity is
identified as Hispanic or Latino may be of any race. Small sample sizes preclude reliable estimates for Native Americans and other groups for which monthly data are not reported by the Bureau of Labor Statistics.
Source: Bureau of Labor Statistics via Haver Analytics.

Monetary Policy and Economic Developments

1.3 percent in December, while the measure
that excludes food and energy items—so-

Figure 2.3. Change in the price index for
personal consumption expenditures

called core inflation, which is typically less
volatile than total inflation—was 1.5 percent

Monthly

12-month percent change

(figure 2.3). Both total and core inflation were
held down in part by prices for services
adversely affected by the pandemic, and indi-

Trimmed mean

2.5

Excluding food
and energy

2.0

cators of longer-run inflation expectations are
now at similar levels to those seen in

3.0

1.5
Total

1.0
.5

recent years.

Financial conditions. Financial conditions
have improved notably since the spring of last
year and remain generally accommodative.
Low interest rates, the Federal Reserve’s
asset purchases, the establishment of emer-

2014 2015 2016 2017 2018 2019 2020
Note: The data extend through December 2020.
Source: For trimmed mean, Federal Reserve Bank of
Dallas; for all else, Bureau of Economic Analysis; all
via Haver Analytics.

gency lending facilities, and other extraordinary actions, together with fiscal policy, continued to support the flow of credit in the economy and smooth market functioning. The nominal
Treasury yield curve steepened and equity prices continued to increase steadily in the second half
of last year as concerns over the resurgence in COVID-19 cases appeared to have been outweighed by positive news about vaccine prospects and expectations of further fiscal support.
Spreads of yields on corporate bonds over those on comparable-maturity Treasury securities narrowed significantly, partly because the credit quality of firms improved and market functioning
remained stable. Mortgage rates for households remain near historical lows. However, financing
conditions remain relatively tight for households with low credit scores and for small businesses.
Financial stability. While some financial vulnerabilities have increased since the start of the pandemic, the institutions at the core of the financial system remain resilient. Asset valuation pressures have returned to or exceeded pre-pandemic levels in most markets, including in equity, corporate bond, and residential real estate markets. Although government programs have supported
business and household incomes, some businesses and households have become more vulnerable to shocks, as earnings have fallen and borrowing has risen. Strong capital positions before
the pandemic helped banks absorb large losses related to the pandemic. Financial institutions,
however, may experience additional losses as a result of rising defaults in the coming years, and
long-standing vulnerabilities at money market mutual funds and open-end investment funds remain
unaddressed. Although some facilities established by the Federal Reserve in the wake of the pandemic have expired, those remaining continue to serve as important backstops against further

107th Annual Report | 2020

stress. (See the box “Developments Related to Financial Stability” on pages 30–31 of the February 2021 Monetary Policy Report.)
International developments. Mirroring the United States, economic activity abroad bounced back
last summer after the spread of the virus moderated and restrictions eased. Subsequent infections and renewed restrictions have again depressed economic activity, however. Relative to the
spring, the current slowdown in economic activity has been less dramatic. Fiscal and monetary
policies continue to be supportive, and people have adapted to containment measures that have
often been less stringent than earlier.
Despite the resurgence of the pandemic in many economies, financial markets abroad have recovered since the spring, buoyed by continued strong fiscal and monetary policy support and the start
of vaccination campaigns in many countries. With the abatement of financial stress, the broad
dollar has depreciated, more than reversing its appreciation at the onset of the pandemic. On balance, global equity prices have recovered and sovereign credit spreads in emerging market economies and in the European periphery have narrowed. In major advanced economies, sovereign
yields remained near historical low levels amid continued monetary policy accommodation.

Monetary Policy
Review of the strategic framework for monetary policy. The Federal Reserve concluded the
review of its strategic framework for monetary policy in the second half of 2020. The review was
motivated by changes in the U.S. economy that affect monetary policy, including the global decline
in the general level of interest rates and the reduced sensitivity of inflation to labor market tightness. In August, the FOMC issued a revised Statement on Longer-Run Goals and Monetary Policy
Strategy.3 The revised statement acknowledges the changes in the economy over recent decades
and articulates how policymakers are taking these changes into account in conducting monetary
policy. In the revised statement, the Committee indicates that it aims to attain its statutory goals
by seeking to eliminate shortfalls from maximum employment—a broad-based and inclusive
goal—and achieve inflation that averages 2 percent over time. Achieving inflation that averages
2 percent over time helps ensure that longer-term inflation expectations remain well anchored at
the FOMC’s longer-run 2 percent objective. Hence, following periods when inflation has been running persistently below 2 percent, appropriate monetary policy will likely aim to achieve inflation
moderately above 2 percent for some time. (See the box “The FOMC’s Revised Statement on
Longer-Run Goals and Monetary Policy Strategy” on pages 40–41 of the February 2021 Monetary
Policy Report.)
In addition, in December the FOMC introduced two changes to the Summary of Economic Projections (SEP) intended to enhance the information provided to the public. First, the release of the
3

The statement, revised in August 2020, was unanimously reaffirmed at the FOMC’s January 2021 meeting.

Monetary Policy and Economic Developments

full set of SEP exhibits was accelerated by three weeks, from the publication of the minutes three
weeks after the end of an FOMC meeting to the day of the policy decision, the second day of an
FOMC meeting. Second, new charts were included that display how FOMC participants’ assessments of uncertainties and risks have evolved over time.
Interest rate policy. In light of the effects of the continuing public health crisis on the economy
and the associated risks to the outlook, the FOMC has maintained the target range for the federal
funds rate at 0 to ¼ percent since last March (figure 2.4). In pursuing the strategy outlined in its
revised statement, the Committee noted that it expects it will be appropriate to maintain this
target range until labor market conditions have reached levels consistent with the Committee’s
assessments of maximum employment and inflation has risen to 2 percent and is on track to
moderately exceed 2 percent for some time.
Balance sheet policy. With the federal funds rate near zero, the Federal Reserve has also continued to undertake asset purchases to increase its holdings of Treasury securities by $80 billion
per month and its holdings of agency mortgage-backed securities by $40 billion per month. These
purchases help foster smooth market functioning and accommodative financial conditions, thereby
supporting the flow of credit to households and businesses. The Committee expects these purchases to continue at least at this pace until substantial further progress has been made toward
its maximum-employment and price-stability goals.
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the
implications of incoming information for the economic outlook. The Committee is prepared to

Figure 2.4. Selected interest rates

Percent

Daily

5
10-year Treasury rate

4
3
2

2-year Treasury rate

1
0

Target federal funds rate

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Note: The 2-year and 10-year Treasury rates are the constant-maturity yields based on the most actively traded
securities.
Source: Department of the Treasury; Federal Reserve Board.

107th Annual Report | 2020

adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.

Special Topics
Disparities in job loss. The COVID-19 crisis has exacerbated pre-existing disparities in labor
market outcomes across job types and demographic groups. Job losses last spring were disproportionately severe among lower-wage workers, less-educated workers, and racial and ethnic
minorities, as in previous recessions, but also among women, in contrast to previous recessions.
While all groups have experienced at least a partial recovery in employment rates since
April 2020, the shortfall in employment remains especially large for lower-wage workers and for
Hispanics, African Americans, and other minority groups, and the additional childcare burdens
resulting from school closures have weighed more heavily on women’s labor force participation
than on men’s labor force participation. (See the box “Disparities in Job Loss during the Pandemic” on pages 12–14 of the February 2021 Monetary Policy Report.)
High-frequency indicators. The unprecedented magnitude, speed, and nature of the COVID-19
shock to the economy rendered traditional statistics insufficient for monitoring economic activity in
a timely manner. As a result, policymakers turned to nontraditional high-frequency indicators of
activity, especially for the labor market and consumer spending. These indicators presented a
more timely and granular picture of the drop and subsequent rebound in economic activity last
spring. The most recent readings obtained from those indicators suggest that economic activity
began to edge up again in January, likely reflecting in part the disbursement of additional stimulus
payments to households. (See the box “Monitoring Economic Activity with Nontraditional HighFrequency Indicators” on pages 7–9 of the February 2021 Monetary Policy Report.)
Monetary policy rules. Simple monetary policy rules, which relate a policy interest rate to a small
number of other economic variables, can provide useful guidance to policymakers. This discussion
presents the policy rate prescriptions from a number of rules that have received attention in the
research literature, many of which mechanically prescribe raising the federal funds rate as employment rises above estimates of its longer-run level. A rule that instead responds only to shortfalls
of employment from assessments of its maximum level is featured to illustrate one aspect of the
FOMC’s revised approach to policy, as described in the revised Statement on Longer-Run Goals
and Monetary Policy Strategy. (See the box “Monetary Policy Rules and Shortfalls from Maximum
Employment” on pages 45–48 of the February 2021 Monetary Policy Report.)

June 2020 Summary
The COVID-19 outbreak is causing tremendous human and economic hardship across the United
States and around the world. The virus and the measures taken to protect public health have

Monetary Policy and Economic Developments

induced a sharp decline in economic activity and a surge in job losses, with the unemployment
rate, which had been at a 50-year low, soaring to a postwar record high. Weaker demand and significantly lower oil prices are holding down consumer price inflation. The disruptions to economic
activity here and abroad significantly affected financial conditions and impaired the flow of credit
to U.S. households and businesses. In response to these developments, the Federal Reserve
quickly lowered its policy rate to close to zero to support economic activity and took extraordinary
measures to stabilize markets and bolster the flow of credit to households, businesses, and communities. Financial conditions have improved, in part reflecting policy measures to support the
economy and the flow of credit. The Federal Reserve is committed to using its full range of tools to
support the U.S. economy in this challenging time, thereby promoting its maximum-employment
and price-stability goals.

Economic and Financial Developments
Economic activity. In response to the public health emergency precipitated by the spread of
COVID-19, many protective measures were adopted to limit the transmission of the virus. These
social-distancing measures effectively closed parts of the economy, resulting in a sudden and
unprecedented fall in economic activity and historic increases in joblessness. Although virus mitigation efforts in many places did not begin until the final two weeks of March, real personal consumption expenditures (PCE) plummeted 6.7 percent in March and an unprecedented 13.2 percent in April. Indicators suggest spending rose in May, but the April data and May indicators taken
together point to a collapse in second-quarter real PCE. Likewise, in the housing market, residential sales and construction in April posted outsized declines that are close to some of the largest
ever recorded, and heightened uncertainty and weak demand have led many businesses to put
investment plans on hold or cancel them outright. These data, along with other information, suggest that real gross domestic product will contract at a rapid pace in the second quarter after tumbling at an annual rate of 5 percent in the first quarter of 2020.
The labor market. The severe economic repercussions of the pandemic have been especially visible in the labor market. Since February, employers have shed nearly 20 million jobs from payrolls,
reversing almost 10 years of job gains. The unemployment rate jumped from a 50-year low of
3.5 percent in February to a post–World War II high of 14.7 percent in April and then moved down
to a still very elevated 13.3 percent in May. The most severe job losses have been sustained by
those with lower earnings and by the socioeconomic groups that are disproportionately represented among low-wage jobs.
Inflation. Consumer price inflation has slowed abruptly. The 12-month change in the price index for
PCE was just 0.5 percent in April. The 12-month measure of PCE inflation that excludes food and
energy items (so-called core inflation), which historically has been a better indicator of where
overall inflation will be in the future than the total figure, fell from 1.8 percent in February to

107th Annual Report | 2020

1.0 percent in April. This slowing reflected monthly readings for March and April that were especially low because of large price declines in some categories most directly affected by social distancing. Overall inflation also has been held down by substantially lower energy prices, which more
than offset the effects of surging prices for food. Despite the sharp slowing in inflation, surveybased measures of longer-run inflation expectations have generally been stable at relatively low
levels. However, market-based measures of inflation compensation have moved down to some of
the lowest readings ever seen.
Financial conditions. In late February and over much of March as COVID-19 spread, equity prices
plunged and nominal Treasury yields dropped substantially, with yields on longer-term securities
reaching all-time record lows. Spreads of yields on corporate bonds over those on comparablematurity Treasury securities widened significantly as the credit quality of firms declined and market
functioning deteriorated; in addition, loans were unavailable for most firms, particularly firms below
investment grade. At the most acute phase of this period, trading conditions became extremely
illiquid and some critical markets stopped functioning properly. Consumer borrowing also fell as
spending slumped. Several markets supporting consumer lending experienced severe strains
around this period, including the agency residential mortgage-backed securities (MBS) market as
well as the auto, credit card, and student loan securitization markets. In response, the Federal
Reserve took unprecedented measures to restore smooth market functioning and to support the
flow of credit in the economy, including the creation of a number of emergency credit and liquidity
facilities.4 These actions, along with the aggressive response of fiscal policy, stabilized financial
markets and led to a notable improvement in financial conditions for both firms and households
as well as state and local governments. Even so, lending standards for both households and businesses have become less accommodative, and borrowing conditions are tight for low-rated households and businesses.
Financial stability. The COVID-19 pandemic has abruptly halted large swaths of economic activity
and led to swift financial repercussions. Despite increased resilience from the financial and regulatory reforms adopted since 2008, financial system vulnerabilities—most notably those associated with liquidity and maturity transformation in the nonbank financial sector—have amplified
some of the economic effects of the pandemic. Accordingly, financial-sector vulnerabilities are
expected to be significant in the near term. The strains on household and business balance
sheets from the economic and financial shocks since March will likely create persistent fragilities.
Financial institutions may experience strains as a result. The Federal Reserve, with approval of the
Secretary of the Treasury, established new credit and liquidity facilities under section 13(3) of the
Federal Reserve Act to alleviate severe dislocations that arose in a number of financial markets
and to support the flow of credit to households, businesses, and state and local governments. Fur-

A list of funding, credit, liquidity, and loan facilities established by the Federal Reserve in response to COVID-19 is available on the Board’s website at https://www.federalreserve.gov/funding-credit-liquidity-and-loan-facilities.htm.

Monetary Policy and Economic Developments

thermore, as financial stresses abroad risked spilling over into U.S. credit markets, the Federal
Reserve and several other central banks announced the expansion and enhancement of dollar
liquidity swap lines. In addition, the Federal Reserve introduced a new temporary repurchase
agreement facility for foreign monetary authorities. The Federal Reserve has also made a number
of adjustments to its regulatory and supervisory regime to facilitate market functioning and reduce
regulatory impediments to banks supporting households, businesses, and municipal customers
affected by COVID-19. (See the box “Developments Related to Financial Stability” on pages 30–33
of the June 2020 Monetary Policy Report.)
International developments. The spread of COVID-19 throughout the world and the measures
taken to contain it have produced devastating effects on the global economy. Amid widespread
and stringent shutdowns, recent data suggest that global economic activity in the first half of the
year has experienced a sharp and synchronized contraction greater than that in the Global Financial Crisis. The many mandated closures of nonessential businesses abroad and the collapse in
consumer demand contributed to a significant deterioration in labor markets and subdued inflation. Unlike past recessions, services activity in the foreign economies has dropped more sharply
than manufacturing, with restrictions on movement having severely curtailed spending on travel,
tourism, restaurants, and recreation. Against this backdrop, foreign governments and central
banks have responded strongly and swiftly to support incomes and to improve market liquidity and
the provision of credit. More recently, economic activity has begun to revive in some foreign economies as authorities eased social-distancing restraints.
The rapid spread of COVID-19 weighed heavily on global risk sentiment, with financial stresses
intensifying and liquidity conditions deteriorating in many foreign financial markets. Aggressive
fiscal and monetary policy responses in the United States and abroad, however, helped boost sentiment and improve market functioning. On balance, financial conditions abroad remain tighter
than at the beginning of the year, especially in some emerging market economies. Since February,
global equity prices moved lower, sovereign interest rates in the European periphery increased
somewhat, and measures of sovereign spreads in emerging market economies widened significantly. In many advanced economies, long-term interest rates reached historically low levels.

Monetary Policy
Easing monetary policy. In light of the effects of COVID-19 on economic activity and on risks to
the outlook, the Federal Open Market Committee (FOMC) rapidly lowered the target range for the
federal funds rate. Specifically, at two meetings in March, the FOMC lowered the target range for
the federal funds rate by a total of 1½ percentage points, bringing it to the current range of 0 to
¼ percent. The Committee expects to maintain this target range until it is confident that the
economy has weathered recent events and is on track to achieve its maximum-employment and
price-stability goals. The Committee noted that it would continue to monitor the implications of

107th Annual Report | 2020

incoming information for the economic outlook, including information related to public health, as
well as global developments and muted inflation pressures, and that it would use its tools and act
as appropriate to support the economy.
Safeguarding market functioning. Market functioning deteriorated in many markets in late February and much of March, including the critical Treasury and agency MBS markets. The Federal
Reserve swiftly took a series of policy actions to address these developments. The FOMC
announced it would purchase Treasury securities and agency MBS in the amounts needed to
ensure smooth market functioning and the effective transmission of monetary policy to broader
financial conditions. The Open Market Desk began offering large-scale overnight and term repurchase agreement operations. The Federal Reserve coordinated with other central banks to
enhance the provision of liquidity via the standing U.S. dollar liquidity swap line arrangements and
announced the establishment of temporary U.S. dollar liquidity arrangements (swap lines) with
additional central banks. The Federal Reserve also established a temporary repurchase agreement facility for foreign and international monetary authorities. (Separately, the Board introduced
several facilities with the backing of the U.S. Treasury to more directly support the flow of credit to
the economy.) Since these policy actions were announced, the functioning of Treasury and MBS
markets has gradually improved. (See the box “Federal Reserve Actions to Ensure Smooth Functioning of Treasury and MBS Markets” on pages 45–47 of the June 2020 Monetary Policy Report.)
Reflecting these policy responses, the size of the Federal Reserve’s balance sheet increased significantly. (See the box “Developments on the Federal Reserve’s Balance Sheet” on pages 50–52
of the June 2020 Monetary Policy Report.)
Fed Listens. The Federal Reserve has released a report on its Fed Listens initiative. This initiative
is part of a broad review of the monetary policy strategy, tools, and communication practices the
Federal Reserve uses to pursue its statutory dual-mandate goals of maximum employment and
price stability. A key component of the review was a series of public Fed Listens events aimed at
consulting with a broad range of stakeholders in the U.S. economy on issues pertaining to the
dual-mandate objectives.

Special Topics
Disparities in job loss during the pandemic. The deterioration in labor market conditions since
February has been sudden, severe, and widespread. At the same time, workers in some industries, occupations, demographic groups, and locations have experienced more significant employment declines than others. Although disparities in labor market outcomes often arise during recessions, factors unique to this episode have also contributed to the recent divergence. Job losses
have been especially severe for those with lower earnings and for the socioeconomic groups that
are disproportionately represented among low-wage jobs. (See the box “Disparities in Job Loss
during the Pandemic” on pages 8–9 of the June 2020 Monetary Policy Report.)

Monetary Policy and Economic Developments

Small businesses during the COVID-19 crisis. Small businesses make up nearly half of U.S.
private-sector employment and play key roles in local communities. The pandemic poses acute
risks to the survival of many small businesses. Their widespread failure would adversely alter the
economic landscape of local communities and potentially slow the economic recovery and future
labor productivity growth. The Congress, the Federal Reserve, and other federal agencies are
making aggressive efforts to support small businesses. (See the box “Small Businesses during
the COVID-19 Crisis” on pages 24–26 of the June 2020 Monetary Policy Report.)
Federal fiscal policy response to COVID-19. While the economic consequences resulting from the
pandemic have been historically large, the amount of fiscal support that has been enacted constitutes the fastest and largest fiscal response to any postwar economic downturn. The pieces of legislation enacted since the arrival of the pandemic that have composed this response are expected
to raise government outlays and reduce tax revenues by nearly $2 trillion in the current fiscal year.
(See the box “Federal Fiscal Policy Response to COVID-19” on pages 20–21 of the June 2020
Monetary Policy Report.)
Policy response to COVID-19 in foreign economies. Authorities in many foreign economies have
implemented fiscal, monetary, and regulatory measures to mitigate disruptions caused by the
COVID-19 pandemic. Sizable fiscal packages targeted the sudden loss of income by firms and households. Actions by central banks, including purchases of sovereign and private bonds, have aimed to
restore market functioning, sustain the provision of credit to businesses and households during the
pandemic, and support the economic recovery. Regulatory changes have focused on ensuring that
banks sustain their capacity to absorb pandemic-related losses while continuing to lend to households and firms. (See the box “Policy Response to COVID-19 in Foreign Economies” on pages 38–39
of the June 2020 Monetary Policy Report.)

Financial Stability

The Federal Reserve monitors financial system risks and engages at home and abroad to help
ensure the system supports a healthy economy for U.S. households, communities, and businesses.
In pursuit of continued financial stability, the Federal Reserve monitors the potential buildup of risks
to financial stability; uses such analyses to inform Federal Reserve responses, including the
design of stress-test scenarios and decisions regarding other policy tools such as the countercyclical capital buffer; works with other domestic agencies directly and through the Financial Stability
Oversight Council (FSOC); and engages with the global community in monitoring, supervision, and
regulation that mitigate the risks and consequences of financial instability domestically and abroad.1
This section discusses key financial stability activities undertaken by the Federal Reserve over
2020, which include the following:
• monitoring risks to financial stability
• establishing lending facilities to support the economy during the COVID-19 crisis
• promoting a perspective on the supervision and regulation of large, complex financial institutions that accounts for the potential spillovers from distress at such institutions to the financial
system and broader economy
• engaging in domestic and international cooperation and coordination

Monitoring Risks to Financial Stability
Financial institutions are linked together through a complex set of relationships, and their condition depends on the economic condition of the nonfinancial sector. In turn, the condition of the
nonfinancial sector hinges on the strength of financial institutions’ balance sheets, as the nonfinancial sector obtains funding through the financial sector. Monitoring risks to financial stability
is aimed at better understanding these complex linkages and has been an important part of Federal Reserve efforts in pursuit of overall economic stability.
A stable financial system, when hit by adverse events, or “shocks,” is able to continue meeting
demands for financial services from households and businesses, such as credit provision and payment services. By contrast, in an unstable system, these same shocks are likely to have much

For more information on how the Federal Reserve promotes a stable financial system, see The Fed Explained, under the
“About the Fed” section of the Board’s website at https://www.federalreserve.gov.

107th Annual Report | 2020

larger effects, disrupting the flow of credit and

Box 3.1. Large, Complex
Financial Institutions and
Their Effect on the Broader
Financial System

leading to declines in employment and eco-

The Federal Reserve promotes a perspective
on the supervision and regulation of large,
complex financial institutions that accounts
for the potential spillovers from distress at
such institutions to the financial system and
broader economy. This and other activities
that have implications for financial stability
are also discussed elsewhere in this annual
report. For instance, a broader set of economic and financial developments are discussed in section 2, “Monetary Policy and
Economic Developments,” with the discussion in the main text concerning surveillance
of economic and financial developments
focused on financial stability. And the full
range of activities associated with supervision of systemically important financial institutions, designated nonbank companies,
and designated financial market utilities is
discussed in section 4, “Supervision and
Regulation.”

the Federal Reserve Board’s monitoring frame-

nomic activity.
Consistent with this view of financial stability,
work distinguishes between shocks to and vulnerabilities of the financial system. Shocks,
such as sudden changes to financial or economic conditions, are inherently hard to predict. Vulnerabilities tend to build up over time
and are the aspects of the financial system
that are most expected to cause widespread
problems in times of stress.
Accordingly, the Federal Reserve maintains a
flexible, forward-looking financial stability monitoring program focused on assessing the financial system’s vulnerabilities to a wide range of
potential adverse shocks (see box 3.1 for more
information on large, complex financial institutions and monitoring potential spillovers).

Each quarter, the Federal Reserve Board staff assesses a set of vulnerabilities relevant for financial stability, including but not limited to asset valuation pressures, borrowing by businesses and
households, leverage in the financial sector, and funding risk. These monitoring efforts inform discussions concerning policies to promote financial stability, such as supervision and regulatory policies as well as monetary policy. They also inform Federal Reserve interactions with broader monitoring efforts, such as those by the FSOC and the Financial Stability Board (FSB).
The Federal Reserve Board publishes its Financial Stability Report on a semiannual basis.2 The
report summarizes the Board’s framework for assessing the resilience of the U.S. financial system
and presents the Board’s current assessment of financial system vulnerabilities. It aims to promote public understanding about Federal Reserve views on this topic and thereby increase transparency and accountability. The report complements the annual report of the FSOC, which is

See Board of Governors of the Federal Reserve System (2020), Financial Stability Report (Washington: Board of Governors, May), https://www.federalreserve.gov/publications/files/financial-stability-report-20200515.pdf; and Board of Governors of the Federal Reserve System (2020), Financial Stability Report (Washington: Board of Governors, November),
https://www.federalreserve.gov/publications/files/financial-stability-report-20201109.pdf.

Financial Stability

chaired by the Secretary of the Treasury and includes the Federal Reserve Chair and other financial regulators.

Asset Valuation Pressures
Overvalued assets are a fundamental source of vulnerability because the unwinding of high prices
can be destabilizing, especially if the assets are widely held and the values are supported by
excessive leverage, maturity transformation, or risk opacity. Moreover, stretched asset valuations
are likely to be an indicator of a broader buildup in risk-taking.
Nonetheless, it is very difficult to judge whether an asset price is overvalued relative to fundamentals. As a result, the Federal Reserve’s analysis of asset valuation pressures typically includes a
broad range of possible valuation metrics and tracks developments in areas in which asset prices
are rising particularly rapidly, into which investor flows have been considerable, or where volatility
has been at unusually low or high levels.
Overall, asset valuation pressures, which were elevated before the COVID-19 outbreak in the
United States, dropped at the beginning of the outbreak as asset prices plummeted. However,
asset prices subsequently retraced and surpassed their pre-pandemic levels in most markets by
the end of 2020. In particular, prices in equity, corporate bond, and residential real estate markets
returned to or exceeded pre-pandemic levels, buoyed in part by positive vaccine-related news, additional fiscal stimulus, and better-than-expected economic data.
After rebounding in the spring of 2020 from
their COVID-related declines, broad stock

Figure 3.1. Aggregate forward price-to-earnings
ratio of S&P 500 firms, 1989–2020

prices climbed over the course of 2020. Stock
prices also rose considerably relative to the
forecasts of corporate earnings despite signifi-

Ratio

Monthly

cant uncertainty in the earnings outlook
among market participants (figure 3.1). Meas-

Median

ures of realized and implied stock price volatility for the S&P 500 index—the 20-day realized volatility and the VIX, respectively—
decreased sharply from their very high levels
at the end of the second quarter but remained
moderately above their historical medians by
the end of 2020.
At the onset of the pandemic, corporate bond
market functioning was adversely affected as

1990

1995

2000

2005

2010

2015

30
27
Dec.
24
21
18
15
12
9
6
3
0
2020

Note: The data extend through December 2020.
Based on expected earnings for 12 months ahead.
Source: Federal Reserve Board staff calculations using
Refinitiv (formerly Thomson Reuters), Institutional Brokers Estimate System Estimates.

107th Annual Report | 2020

Figure 3.2. Corporate bond spreads to
similar-maturity Treasury securities,
1997–2020

liquidity conditions deteriorated: Bid-ask
spreads widened considerably, and bond
mutual funds and exchange-traded funds
experienced large outflows. Spreads of yields

12
11
10
9
8
7
6
5
4
3
2
1
0

Percentage points

24
22
20
Triple-B
(left scale)
18
High-yield
16
(right scale)
14
12
10
8
6
4
Dec.
2
0
1999 2002 2005 2008 2011 2014 2017 2020

Monthly

Note: The data extend through December 2020. The
triple-B series reflects the options-adjusted spread of
the ICE BofAML triple-B U.S. Corporate Index (C0A4),
and the high-yield series reflects the options-adjusted
spread of the ICE BofAML U.S. High Yield
Index (H0A0).
Source: ICE Data Indices, LLC, used with permission.

on corporate bonds over comparable-maturity
Treasury yields increased significantly during
the early period of the pandemic (figure 3.2).
Subsequently, liquidity conditions as well as
investor risk appetite improved following the
Federal Reserve’s announcement in late
March of a range of measures to support
market functioning and the flow of credit
(see box 3.2).
In the second half of 2020, the resilience of
the economy, as well as the emergency
approval of vaccines and optimism about further fiscal support late last year, contributed

to a notable improvement in the outlook for corporate earnings and credit quality that drove
declines in yields on corporate bonds. However, spreads in sectors heavily affected by the
pandemic—such as the energy, airline, and leisure industries—closed the year at elevated levels.

Borrowing by Households and Businesses
Excessive borrowing by households and businesses has been an important contributor to past
financial crises. Highly indebted households and nonfinancial businesses may be vulnerable to
negative shocks to incomes or asset values and may be forced to curtail spending, which could
amplify the effects of financial shocks.
In turn, financial stress among households and businesses can lead to mounting losses at financial institutions, creating an adverse feedback loop in which weaknesses among households, nonfinancial businesses, and financial institutions cause further declines in income and accelerate
financial losses, potentially leading to financial instability and a sharp contraction in economic
activity.
Vulnerabilities associated with business and household debt increased over the course of 2020.
Before the COVID-19 outbreak, the combined total debt owed by businesses and households
expanded at a pace similar to that of nominal gross domestic product (GDP) for several years.

Financial Stability

Box 3.2. Facilities to Support the Economy during the
COVID-19 Crisis
In the immediate wake of the pandemic, the Federal Reserve took forceful actions and established
emergency lending facilities, with the approval of the Secretary of the Treasury as needed. These
actions and facilities supported the flow of credit to households and businesses and served as backstop measures that, over the course of 2020, gave confidence to investors that support would be
made available should financial conditions deteriorate substantially.
Many of the facilities have closed, but the Paycheck Protection Program Liquidity Facility (PPPLF) and
facilities serving dollar funding markets remain open. The PPPLF was established to extend credit to
lenders that participate in the Paycheck Protection Program of the Small Business Administration
(SBA), which has provided critical support for small businesses. Through the end of 2020, the Federal
Reserve had made about 15,000 PPPLF advances to roughly 850 financial institutions, totaling about
$100 billion in liquidity.
The Federal Reserve took actions that reduced spillovers to the U.S. economy from foreign financial
stresses. Temporary U.S. dollar liquidity swap lines were established in March 2020, in addition to the
preexisting standing lines, and improved liquidity conditions in dollar funding markets in the United
States and abroad by providing foreign central banks with the capacity to deliver U.S. dollar funding to
institutions in their jurisdictions during times of market stress.
The FIMA (Foreign and International Monetary Authorities) Repo Facility has helped support the smooth
functioning of the U.S. Treasury market by providing a temporary source of U.S. dollars to a broad
range of countries, many of which do not have swap line arrangements with the Federal Reserve. The
temporary swap lines and the FIMA Repo Facility will continue to serve as liquidity backstops until their
scheduled expiration at the end of September 2021.
Five other facilities established at the onset of the pandemic expired either at the end of
December 2020 or at the beginning of January 2021, and three expired on March 31, 2021.
The Primary Market Corporate Credit Facility, the Secondary Market Corporate Credit Facility, and the
Municipal Liquidity Facility were established to improve the flow of credit through bond markets, where
large firms and municipalities obtain most of their long-term funding. The Term Asset-Backed Securities
Loan Facility was also set up to support the issuance of securities backed by student loans, auto
loans, credit card loans, loans backed by the SBA, and certain other assets. Altogether, these facilities
brought rapid improvements to credit markets, with only modest direct interventions, and continued to
backstop those markets until the facilities expired at the end of 2020.
The Main Street Lending Program (Main Street) expired at the beginning of January 2021. In its period
of operation, Main Street purchased about 1,800 loan participations, totaling more than $16 billion,
which helped small and medium-sized businesses from some of the hardest-hit areas of the country
and covered a wide range of industries.
The Commercial Paper Funding Facility (CPFF), the Money Market Mutual Fund Liquidity Facility (MMLF),
and the Primary Dealer Credit Facility (PDCF) stabilized short-term funding markets and improved the
flow of credit to households and businesses. Although balances in the PDCF, CPFF, and MMLF fell from
their initial highs to low levels by the end of 2020, the facilities served as important backstops against
further market stress until their expiration in March 2021.

107th Annual Report | 2020

In the first half of 2020, credit growth acceler-

Figure 3.3. Private nonfinancial-sector
credit-to-GDP ratio, 1985–2020

ated and reached about 9 percent in annualized terms, mostly reflecting significant busiRatio

Quarterly

2.0

ness borrowing. The precipitous drop in GDP
following the outbreak and the increase in

1.7

business borrowing caused a dramatic rise in
the credit-to-GDP ratio to historical highs

1.4

1.1

0.8
1985 1990 1995 2000 2005 2010 2015 2020
Note: The data extend through 2020:Q4. The shaded
bars indicate periods of business recession as
defined by the National Bureau of Economic Research:
July 1990 to March 1991, March 2001 to November
2001, December 2007 to June 2009, and February 2020 to December 2020. GDP is gross
domestic product.
Source: Federal Reserve Board staff calculations
based on Bureau of Economic Analysis, national
income and product accounts, and Federal Reserve
Board, Statistical Release Z.1, “Financial Accounts of
the United States.”

(figure 3.3). In the second half of 2020, this
ratio fell markedly, as GDP partially rebounded
and debt changed little. Government lending,
relief programs, and low interest rates mitigated strains in the business and household
sectors.
In 2020, household debt (adjusted for general
price inflation) edged higher on net. Debt
owed by the one-half of households with prime
credit scores continued to account for almost
all of the growth. By contrast, inflationadjusted loan balances for borrowers with
near-prime credit scores changed little over
2020, and balances for borrowers with subprime scores fell.

Mortgage debt accounted for roughly two-thirds of total household credit, with mortgage extensions skewed toward prime borrowers in recent years. Widespread loss-mitigation measures and
low interest rates have helped damp the effect of the pandemic on mortgage delinquencies.
Most of the remaining one-third of total debt owed by households was consumer credit, consisting
mainly of student loans, auto loans, and credit card debt. Credit card balances decreased in
2020, while auto loan balances expanded moderately. Many student loan borrowers benefited
from payment suspensions and waived interest payments as part of the Coronavirus Aid, Relief,
and Economic Security Act.
Borrowing by businesses, likely seeking to bridge pandemic-related interruptions to revenues, was
extremely high in the first half of 2020. An indicator of the leverage of large businesses—the ratio
of debt to assets for all publicly traded nonfinancial firms—reached its highest level in 20 years by
mid-2020. As the growth in outstanding debt slowed later in the year, the same ratio declined but,
at the end of the year, still stood above the levels leading up to the pandemic.

Financial Stability

Credit quality deteriorated after the onset of the pandemic but stabilized in the second half of
2020, particularly among large firms. Correspondingly, the pace of corporate bond downgrades
was elevated through the spring of 2020 but came down to normal levels later in the year.

Leverage in the Financial System
The U.S. banking system remained resilient

Figure 3.4. Common equity Tier 1 ratio of
banks, 2001–20

throughout 2020, in part because of the reguPercent of risk-weighted assets

latory reforms prompted by the 2007–09
recession, forceful interventions by the Fed-

Quarterly
Q4

14
12

eral Reserve, and fiscal stimulus. When the

pandemic intensified in March, large capital

buffers allowed banks to meet the substantially increased loan demand from businesses

6
Other BHCs
Large non—G-SIBs
G-SIBs

while providing payment relief and other types
of forbearance to households. That additional
lending pushed up risk-weighted assets at the
same time that increased loan loss provisions
eroded profitability.
As a result, the aggregate common equity
Tier 1 ratio—a regulatory risk-based measure
of bank capitalization—declined significantly
in the first quarter (figure 3.4). However,
capital ratios ended the year at new highs, not
only because of the Federal Reserve Board’s
decision to restrict capital payouts by large
banks, but also because of declines in risk-

4
2
0

2002 2005 2008 2011 2014 2017 2020
Note: The data, which extend through 2020:Q4, are
seasonally adjusted by Federal Reserve Board staff.
Before 2014:Q1, the numerator of the common equity
Tier 1 ratio is Tier 1 common capital for advanced
approaches bank holding companies (BHCs) and intermediate holding companies (IHCs) (before 2015:Q1,
for non-advanced approaches BHCs). Afterward, the
numerator is common equity Tier 1 capital. G-SIBs are
global systemically important U.S. banks. Large non–
G-SIBs are BHCs and IHCs with greater than $100 billion in total assets that are not G-SIBs. The denominator is risk-weighted assets. The shaded bars
indicate periods of business recession as defined by
the National Bureau of Economic Research:
March 2001 to November 2001, December 2007 to
June 2009, and February 2020 to December 2020.
Source: Federal Reserve Board, Form FR Y-9C, Consolidated Financial Statements for Holding Companies.

weighted assets driven by paydowns of business loans and credit card loans, reduced
loan demand more generally, and tightened lending standards.3 Bank profitability also improved in
the second half of 2020 because of a combination of lower-than-expected losses, a better economic outlook, and strong noninterest income.
In June 2020, the Federal Reserve released the results of the 2020 Dodd-Frank Act stress tests
and the Comprehensive Capital Analysis and Review along with a sensitivity analysis to assess the
resilience of large banks under three hypothetical downside scenarios related to the coronavirus

The Federal Reserve took steps in June 2020 to restrict capital distributions in the third quarter by banks with more than
$100 billion in assets, including prohibiting share repurchases and limiting dividends based on the previous four quarters of earnings. These restrictions were later extended to the fourth quarter.

107th Annual Report | 2020

event. The analysis under the more severe downside scenarios showed that most banks would
have remained well capitalized, but several approached their minimum capital levels.4
In December, the Federal Reserve released results from the second round of bank stress tests for
2020, which showed that all banks would remain well capitalized under two updated severely
adverse supervisory scenarios.
Outside the banking sector, leverage at broker-dealers changed little over 2020 and remained at
historically low levels by the end of the year. While the liquidity deterioration across dealerintermediated markets in March 2020 demonstrated potential fragility despite dealers’ low
leverage, this fragility was mitigated by emergency lending facilities and the supervisory actions of
the Federal Reserve.
Gross leverage at hedge funds declined in the first half of 2020 to roughly the middle of its historical distribution. The COVID-19 shock exposed vulnerabilities at hedge funds. Extreme market
volatility and lower liquidity in asset markets led to substantial losses at some hedge funds and
sizable margin calls.5 While data on hedge fund leverage come from different sources with various
lags, most measures increased in the second half of 2020 and are now somewhat above their historical averages, reversing the decrease in the first half of the year. Finally, leverage at life insurance companies rose to post-2008 highs during the course of 2020.

Funding Risk
At the onset of the pandemic, banks had substantial quantities of liquid assets, and their reliance
on the most unstable sources of funding stood at historically low levels. Those liquidity positions
improved further over the rest of 2020, as banks experienced heavy deposit inflows and their
liquid asset positions increased substantially (figure 3.5).
Many types of nonbank financial institutions, however, experienced funding difficulties in the first
half of 2020. For example, prime money market funds (MMFs), particularly institutional funds,
experienced runs in March, with outflows reaching the same proportion of assets redeemed during
the run on MMFs in 2008.
Heavy redemptions from these funds reportedly were prompted in part by investor concerns about
the possibility of liquidity fees and redemption gates. As investors fled to safety, actions by the
Federal Reserve were required to slow withdrawals and restore the functioning of short-term
4

See Board of Governors of the Federal Reserve System (2020), “Federal Reserve Board Releases Results of Stress
Tests for 2020 and Additional Sensitivity Analyses Conducted in Light of the Coronavirus Event,” press release, June 25,
https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200625c.htm.
See the box “A Retrospective on the March 2020 Turmoil in Treasury and Mortgage-Backed Securities Markets” in Board
of Governors of the Federal Reserve System (2020), Financial Stability Report (Washington: Board of Governors,
November), pp. 32–38, https://www.federalreserve.gov/publications/files/financial-stability-report-20201109.pdf.

Financial Stability

funding markets. Since the onset of the pandemic, assets under management at prime

Figure 3.5. Liquid assets held by banks,
2001–20

MMFs have declined steadily.
Percent of assets

Domestic and International
Cooperation and Coordination

Quarterly

32
28

Other BHCs
Large non—G-SIBs
G-SIBs

24
Q4

20
16

The Federal Reserve cooperated and coordi-

nated with both domestic and international

institutions in 2020 to promote financial

stability.

0
2002

Financial Stability Oversight Council
Activities
As mandated by the Dodd-Frank Act, the FSOC
was created in 2010 and, as noted earlier, is
chaired by the Treasury Secretary and includes
the Federal Reserve Chair as a member (see
box 3.3). It established an institutional framework for identifying and responding to the

2005

2008

2011

2014

2017

2020

Note: The data extend through 2020:Q4. Liquid
assets are cash plus estimates of securities that
qualify as high-quality liquid assets as defined by the
liquidity coverage ratio requirement. Accordingly,
Level 1 assets as well as discounts and restrictions
on Level 2 assets are incorporated into the estimate.
G-SIBs are global systemically important U.S. banks.
Large non–G-SIBs are bank holding companies (BHCs)
and intermediate holding companies with greater than
$100 billion in total assets.
Source: Federal Reserve Board, Form FR Y-9C, Consolidated Financial Statements for Holding Companies.

sources of systemic risk.
Through collaborative participation in the FSOC, U.S. financial regulators monitor not only institutions, but also the financial system as a whole. The Federal Reserve, in conjunction with other participants, assists in monitoring financial risks, analyzes the implications of those risks for financial
stability, and identifies steps that can be taken to mitigate those risks. In addition, when an institution is designated by the FSOC as systemically important, the Federal Reserve assumes responsibility for supervising that institution.
In 2020, the FSOC continued to serve as a central venue for member agencies to coordinate risk
analysis and policy enactment—a function that took on particular significance around the
COVID-19 event. The council increased the frequency of staff-level meetings, providing member
agencies with timely analysis and a venue to exchange views and coordinate responses.

Financial Stability Board Activities
In light of the interconnected global financial system and the global activities of large U.S. financial institutions, the Federal Reserve participates in international bodies, such as the FSB. The
FSB monitors the global financial system and promotes financial stability through the development

107th Annual Report | 2020

of sound policies that can be implemented

Box 3.3. Regular Reporting
on Financial Stability
Oversight Council Activities

across countries. The Federal Reserve is a

The Federal Reserve cooperated and coordinated with domestic agencies in 2020 to promote financial stability, including through the
activities of the Financial Stability Oversight
Council (FSOC).

Treasury.

Meeting minutes. In 2020, the FSOC met
five times and held two notational votes. The
minutes for each meeting are available on
the U.S. Treasury website (https://
home.treasury.gov/policy-issues/financialmarkets-financial-institutions-and-fiscalservice/fsoc/council-meetings/meetingminutes).

financial intermediation, the use and effective-

FSOC annual report. On December 3, 2020,
the FSOC released its 10th annual report
(https://home.treasury.gov/system/files/
261/FSOC2020AnnualReport.pdf), which
includes a review of key developments in
2020 and a set of recommended actions that
could be taken to ensure financial stability
and to mitigate systemic risks that affect
the economy.
For more details on the FSOC, see https://
home.treasury.gov/policy-issues/financialmarkets-financial-institutions-and-fiscalservice/fsoc.

member of the FSB, along with the Securities
and Exchange Commission and the U.S.

In the past year, the FSB has examined several issues, including monitoring of nonbank
ness of COVID-related policy response measures, evaluating the effects of too-big-to-fail
reforms, challenges in cross-border payments
systems, monitoring and evaluation of channels through which climate-related risks could
affect financial stability, challenges in correspondent banking, the regulatory issues
regarding the emergence and use of so-called
global stablecoins, transitioning away from the
use of LIBOR (London interbank offered rate),
asset management, fintech (emerging financial technologies), and development of effective resolution regimes for large financial
institutions.
In addition, the FSB formed a high-level
steering group on nonbank financial intermediation that developed a detailed work plan to

analyze and address vulnerabilities. This steering group agreed to develop policy options to
strengthen resilience in MMFs, which will be published in 2021.

Supervision and Regulation

The Federal Reserve promotes a safe, sound, and efficient banking and financial system that supports the growth and stability of the U.S. economy. This section discusses the institutions supervised and regulated by the Federal Reserve as well as the key supervisory and regulatory activities
undertaken by the Federal Reserve during 2020 (also see figure 4.1):
• supervising the activities of financial institutions to ensure their safety and soundness
• developing regulatory policy (for example, rulemakings, policy statements, and guidance) and
acting on applications filed by banking organizations
The Federal Reserve also monitors trends in the banking sector by collecting and analyzing data,
along with the other federal financial regulatory agencies (see box 4.1).

Figure 4.1. Banks monitored by the Federal Reserve entered the COVID event with strong capital
positions and built further capital in 2020
The aggregate common equity tier 1 (CET1) capital ratio exceeded its pre-COVID event level in the second half of 2020.
At year-end, capital ratios remained well above regulatory minimums at nearly all firms, providing a buffer to absorb
losses and support lending as the economy recovers.

Percent
20

2016

2017

2018

Note: The shaded bar indicates Q1:2020 through Q4:2020 data.
Source: Call Report and FR Y-9C.

2019

2020

107th Annual Report | 2020

Box 4.1. Banking Sector Conditions
For more information on banking sector conditions, see the Supervision and Regulation Report, which is
submitted semiannually to the Senate Committee on Banking, Housing, and Urban Affairs and to the
House Committee on Financial Services. The reports are available on the Board’s website at https://
www.federalreserve.gov/publications/supervision-and-regulation-report.htm, and are delivered concurrently with testimony from the Federal Reserve Board Vice Chair for Supervision.

Supervised and Regulated Institutions
The Federal Reserve categorizes banking organizations into different groups based on their risk
profiles, as described in table 4.1.

State Member Banks
At year-end 2020, a total of 1,501 banks (excluding non-depository trust companies and private
banks) were members of the Federal Reserve System, of which 734 were state chartered. Federal
Reserve System member banks operated 50,123 branches and accounted for 34 percent of all
commercial banks in the United States and 68 percent of all commercial banking offices. Statechartered commercial banks that are members of the Federal Reserve, commonly referred to as
state member banks, represented approximately 17 percent of all insured U.S. commercial banks
and held approximately 17 percent of all insured commercial bank assets in the United States.

Bank Holding Companies
At year-end 2020, a total of 4,032 U.S. bank holding companies (BHCs) were in operation, of
which 3,603 were top-tier BHCs. These organizations controlled 3,712 insured commercial banks
and held approximately 94 percent of all insured commercial bank assets in the United States.
BHCs that meet certain capital, managerial, and other requirements may elect to become financial
holding companies (FHCs). FHCs can generally engage in a broader range of financial activities
than other BHCs. As of year-end 2020, a total of 502 domestic BHCs and 44 foreign banking organizations had FHC status. Of the domestic FHCs, 22 had consolidated assets of $100 billion or
more; 59 between $10 billion and $100 billion; 178 between $1 billion and $10 billion; and
243 less than $1 billion.

Savings and Loan Holding Companies
At year-end 2020, a total of 328 savings and loan holding companies (SLHCs) were in operation,
of which 169 were top-tier SLHCs. These SLHCs controlled 177 depository institutions. Approximately 92 percent of SLHCs engage primarily in depository activities. These firms hold approximately 16.6 percent ($344 billion) of the total combined assets of all SLHCs. The Office of the

Supervision and Regulation

Table 4.1. Summary of supervised institutions
Portfolio
Large Institution Supervision
Coordinating Committee (LISCC)
State member banks
Large and foreign banking
organizations (LFBOs)

Definition
Eight U.S. global systemically important banks (G-SIBs)
State member banks within LISCC organizations
Non-LISCC U.S. firms with total assets $100 billion and
greater and FBOs

Number of
institutions

Total assets
($ trillions)

13.5

174

9.1

Large banking organizations (LBOs)

Non-LISCC U.S. firms with total assets $100 billion
and greater

4.2

Large foreign banking organizations
(FBOs)

FBOs with combined U.S. assets $100 billion
and greater

3.8

Small FBOs (excluding representative offices)

FBOs with combined U.S. assets less than $100 billion

Small FBOs (representative offices)

FBO U.S. representative offices

State member banks

State member banks within LFBOs

Regional banking organizations (RBOs)
State member banks
Community banking organizations (CBOs)
State member banks
Insurance and commercial savings
and loan holding companies (SLHCs)

110

1.2

Total assets between $10 billion and $100 billion

2.5

State member banks within RBOs

0.9

Total assets less than $10 billion

3,696*

2.7

State member banks within CBOs

682

0.6

7 insurance
4 commercial

1.1

SLHCs primarily engaged in insurance or commercial
activities

Note: Three foreign banking organizations transferred from the LISCC portfolio to the LFBO portfolio, effective January 1, 2021. These three
firms are reflected in the LFBO portfolio in this table.
* Includes 3,638 holding companies and 58 state member banks that do not have holding companies.

Comptroller of the Currency (OCC) or the Federal Deposit Insurance Corporation (FDIC) is the primary federal regulator for subsidiary savings associations of SLHCs. Thirteen SLHCs are engaged
primarily in nonbanking activities, such as insurance underwriting (7 SLHCs), securities brokerage
(2 SLHCs), and commercial activities (4 SLHCs). The 25 largest SLHCs accounted for more than
$1.98 trillion of total combined assets.
Savings and loan holding companies significantly engaged in insurance activities. At year-end
2020, the Federal Reserve supervised seven insurance SLHCs, with $1.1 trillion in estimated total
combined assets, and $166 billion in insured depository assets. Four of these firms have total
assets greater than $100 billion and for six of the seven, insured depository assets represent
less than half of total assets.
As the consolidated supervisor of insurance SLHCs, the Federal Reserve evaluates an organization’s
risk-management practices, the financial condition of the overall organization, and the impact of the
nonbank activities on the depository institution. The Federal Reserve relies to the fullest extent possible on the work of the primary regulators, including other federal banking regulators and state insurance regulators, as part of the overall supervisory assessment of insurance SLHCs.

107th Annual Report | 2020

In 2020, the Federal Reserve’s Insurance Policy Advisory Committee (IPAC) focused its advice on
the Board’s proposed Building Block Approach to establish capital requirements for insurance
depository institution holding companies.1 The IPAC, established by the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) to provide information, advice, and recommendations on insurance issues, consists of 21 insurance experts and usually meets three times
each year. For more information on IPAC efforts, see https://www.federalreserve.gov/
aboutthefed/ipac.htm.

Financial Market Utilities
Financial market utilities (FMUs) manage or operate multilateral systems for the purpose of transferring, clearing, or settling payments, securities, or other financial transactions among financial
institutions or between financial institutions and the FMU. The Federal Reserve supervises FMUs
that are chartered as member banks or Edge Act corporations, and coordinates with other federal
banking supervisors to supervise FMUs considered bank service providers under the Bank Service
Company Act (BSCA).
In July 2012, the Financial Stability Oversight Council voted to designate eight FMUs as systemically important under title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act
(Dodd-Frank Act). As a result of these designations, the Board assumed an expanded set of
responsibilities related to these designated FMUs that includes promoting uniform risk-management
standards, playing an enhanced role in the supervision of designated FMUs, reducing systemic
risk, and supporting the stability of the broader financial system. For certain designated FMUs, the
Board established risk-management standards and expectations that are articulated in the
Board’s Regulation HH.
In addition to setting minimum risk-management standards, Regulation HH establishes requirements for the advance notice of proposed material changes to the rules, procedures, or operations of a designated FMU for which the Board is the supervisory agency under title VIII. Finally,
Regulation HH also establishes minimum conditions and requirements for a Federal Reserve Bank
to establish and maintain an account for, and provide services to, a designated FMU.2 Where the
Board is not the title VIII supervisory agency, the Federal Reserve works closely with the Securities
and Exchange Commission (SEC) and the Commodity Futures Trading Commission to promote
robust FMU risk management and monitor systemic risks across the designated FMUs.

International Activities
Foreign operations of U.S. banking organizations. At the end of 2020, a total of 27 banks were
operating 308 branches in foreign countries and overseas areas of the United States. Fourteen
1
2

84 Fed. Reg. 57,240 (October 24, 2019), https://www.govinfo.gov/content/pkg/FR-2019-10-24/pdf/2019-21978.pdf.
The Federal Reserve Banks maintain accounts for and provide services to several designated FMUs.

Supervision and Regulation

national banks were operating 248 of these branches, 13 state member banks were operating
47 of these branches, and 5 nonmember banks were operating the remaining 13.
Edge Act and agreement corporations. At year-end 2020, out of 35 banking organizations chartered as Edge Act or agreement corporations, 3 operated 6 Edge Act and agreement branches.
These corporations are examined annually.
U.S. activities of foreign banks. As of year-end 2020, a total of 137 foreign banks from 48 countries operated 148 state-licensed branches and agencies, of which 6 were insured by the FDIC,
and 51 OCC-licensed branches and agencies, of which 4 were insured by the FDIC. These foreign
banks also owned 7 Edge Act and agreement corporations. In addition, they held a controlling
interest in 36 U.S. commercial banks. Altogether, the U.S. offices of these foreign banks controlled approximately 17 percent of U.S. commercial banking assets. These 137 foreign banks
also operated 66 representative offices; an additional 32 foreign banks operated in the United
States through a representative office.
The Federal Reserve conducted or participated with state and federal regulatory authorities in
540 examinations of foreign banks in 2020.

Supervisory Developments
Supervisory and Regulatory Initiatives
The Federal Reserve’s supervision activities include examinations and inspections to ensure that
financial institutions operate in a safe and sound manner and comply with laws and regulations.
These include an assessment of a financial institution’s risk-management systems, financial conditions, and compliance. The Federal Reserve tailors its supervisory approach based on the size
and complexity of firms—supervisory oversight ranges from a continuous supervisory presence
with dedicated teams of examiners for large firms to regular point-in-time and targeted periodic
examinations for small, noncomplex firms.
At the start of the COVID event, the Federal Reserve temporarily adjusted its supervisory
approach. From March through the beginning of June, examiners focused on monitoring and
reduced examination activities, with the greatest reduction occurring at the smallest banks. The
Federal Reserve’s supervisory approach gave firms time to adapt to the COVID event and provide
customers with needed assistance. Financial institutions implemented contingency operating
plans and adapted operations to the new environment. In June, examination activities resumed for
all firms. All examination activities are currently being conducted off site, until local conditions
improve to facilitate on-site examinations. For additional information on the Federal Reserve’s
COVID response, see box 4.2.

107th Annual Report | 2020

In 2020, the Federal Reserve conducted

Box 4.2. Supervisory and
Regulatory Response to
COVID-19

263 examinations of state member banks,

In response to the COVID event, the Federal
Reserve took a number of supervisory and
regulatory actions. These actions were
intended to help financial institutions deploy
their resources as efficiently as possible
while continuing to support their customers
and local economies in a prudent and
fair manner.

holding companies. Tables 4.2 and 4.3 pro-

For more information on the Federal
Reserve’s response to the COVID event, see
the Supervision and Regulation Report, which
is submitted semiannually to the Senate
Committee on Banking, Housing, and Urban
Affairs and to the House Committee on Financial Services. The reports are available on
the Board’s website at https://
www.federalreserve.gov/publications/
supervision-and-regulation-report.htm, and
are delivered concurrently with testimony
from the Federal Reserve Board Vice Chair
for Supervision.

The Federal Reserve conducts specialized

2,704 inspections of bank holding companies,
and 146 inspections at savings and loan
vide information on examinations and inspections conducted by the Federal Reserve during
the past five years.

Specialized Examinations
examinations of supervised financial institutions in the areas of capital planning and
stress testing, information technology, fiduciary activities, transfer agent activities, government and municipal securities dealing and
brokering, and cybersecurity and critical infrastructure. The Federal Reserve also conducts
specialized examinations of certain nonbank
entities that extend credit subject to the
Board’s margin regulations.

Table 4.2. Savings and loan holding companies, 2016–20
Entity/item

2020

2019

2018

2017

2016

Top-tier savings and loan holding companies
Assets of more than $1 billion
Total number

2,026

1,822

1,615

1,696

1,664

Number of inspections

By Federal Reserve System

On site

Off site

119

134

139

164

171

Total assets (billions of dollars)

Assets of $1 billion or less
Total number
Total assets (billions of dollars)

Number of inspections

102

107

165

181

By Federal Reserve System

102

107

165

181

On site

Off site

106

156

172

Supervision and Regulation

Table 4.3. State member banks and bank holding companies, 2016–20
Entity/item

2020

2019

2018

2017

2016

734

754

794

815

829

3,568

2,642

2,851

2,729

2,577

502

554

563

643

663

By Federal Reserve System

263

327

321

354

406

By state banking agency

239

227

242

289

257

State member banks
Total number
Total assets (billions of dollars)
Number of examinations

Top-tier bank holding companies
Assets of more than $1 billion
Total number

746

631

604

583

569

23,811

20,037

19,233

18,762

17,593

Number of inspections

875

805

549

597

659

By Federal Reserve System1

814

761

533

574

646

On site

452

466

325

394

438

Off site

362

295

208

180

208

2,887

3,094

3,273

3,448

3,682

883

870

893

931

914

Number of inspections

1,967

2,122

2,216

2,318

2,597

By Federal Reserve System

1,890

2,033

2,132

2,252

2,525

Total assets (billions of dollars)

By state banking agency
Assets of $1 billion or less
Total number
Total assets (billions of dollars)

On site

101

126

Off site

1,873

1,962

2,051

2,151

2,399

502

493

490

492

473

By state banking agency
Financial holding companies
Domestic
Foreign
1

For bank holding companies subject to continuous, risk-focused supervision, includes multiple targeted reviews.

Capital Planning and Stress Testing
Since the 2007–09 financial crisis, the Board has led a series of initiatives to strengthen the
capital planning practices and positions of the largest banking organizations. The Federal
Reserve’s Dodd-Frank Act stress test (DFAST) includes annual supervisory and company-run stress
tests. In March 2020, the Board integrated the stress test with its non-stress capital requirements
through the stress capital buffer into one forward-looking and risk-sensitive capital framework.
In 2020, the Federal Reserve evaluated the capital planning processes and capital positions of
33 of the largest banking firms. In June, the Board conducted its annual stress test and an additional assessment of bank capital during the COVID event. The results showed that large banks
had strong levels of capital, but considerable economic uncertainty remained. In response, the

107th Annual Report | 2020

Board required subject firms to resubmit their

Box 4.3. Capital Planning
and Stress Testing
Publications Released in
2020

capital plans and implemented capital distri-

More details on the 2020 DFAST results are
available at https://www.federalreserve.gov/
publications/files/2020-dfast-results20200625.pdf.

also found that large banks remained well-

More details on the 2020 sensitivity analysis
results are available at https://
www.federalreserve.gov/publications/files/
2020-sensitivity-analysis-20200625.pdf.
More details on the 2020 December stress
test results are available at https://
www.federalreserve.gov/publications/files/
2020-dec-stress-test-results-20201218.pdf.

bution restrictions to ensure that banks would
preserve capital. A second round of stress
test results were released in December, which
capitalized under two separate hypothetical
recessions. For stress tests and sensitivity
analysis results, see box 4.3.
Information Technology Activities
During 2020, the Federal Reserve conducted
examinations of information technology activities (inclusive of cyber risk management activities) at financial institutions. Additionally,
under the authority of the BSCA, the Federal
Reserve, FDIC, and OCC (the federal banking

agencies) examine and assign Uniform Rating System for Information Technology ratings to technology service providers that provide services for specific regulated financial institutions.
In 2020, the Federal Financial Institutions Examination Council (FFIEC), of which the Federal
Reserve is a member, issued guidance for the examination of financial institutions and their service providers.3
In April, the FFIEC also issued a statement to address the use of cloud computing services and
security risk management principles in the financial services sector.4
Fiduciary Activities
In 2020, Federal Reserve examiners conducted 70 fiduciary examinations of state member banks
and non-depository trust companies.
Transfer Agents
During 2020, the Federal Reserve conducted transfer agent examinations at two state member
banks and three BHCs that were registered as transfer agents.

The FFIEC is an interagency body of financial regulatory agencies established to prescribe uniform principles, standards,
and report forms and to promote uniformity in the supervision of financial institutions. The council has six voting members: the Board of Governors of the Federal Reserve System, the FDIC, the National Credit Union Administration, the
OCC, the Consumer Financial Protection Bureau, and the chair of the State Liaison Committee.
FFIEC Joint Statement on Security in a Cloud Computing Environment, https://www.ffiec.gov/press/PDF/
FFIEC_Cloud_Computing_Statement.pdf.

Supervision and Regulation

Government and Municipal Securities Dealers and Brokers
The Federal Reserve is responsible for examining state member banks and foreign banks for compliance with the Government Securities Act of 1986 and with Treasury regulations governing
dealing and brokering in government securities. During 2020, the Federal Reserve conducted four
examinations of government securities activities at these organizations.
The Federal Reserve is also responsible for ensuring that state member banks and BHCs that act
as municipal securities dealers comply with the Securities Act Amendments of 1975. Municipal
securities dealers are examined, pursuant to the Municipal Securities Rulemaking Board’s rule
G-16, at least once every two calendar years. During 2020, the Federal Reserve examined five
entities that dealt in municipal securities.
Securities Credit Lenders
Under the Securities Exchange Act of 1934, the Board is responsible for regulating credit in certain transactions involving the purchasing or carrying of securities. As part of its general examination program, the Federal Reserve examines the banks under its jurisdiction for compliance with
the Board’s Regulation U. In addition, the Federal Reserve maintains a registry of persons other
than banks, brokers, and dealers who extend credit subject to Regulation U. Throughout the year,
Federal Reserve examiners conducted specialized examinations of these lenders if they are not
already subject to supervision by the Farm Credit Administration or the National Credit Union
Administration.
Cybersecurity and Critical Infrastructure
The Federal Reserve collaborated with other financial regulators, the U.S. Treasury, private
industry, and international partners to promote effective safeguards against cyber threats to the
financial services sector and to bolster the sector’s cyber resiliency. Throughout the year, Federal
Reserve examiners conducted targeted cybersecurity assessments of the largest and most systemically important financial institutions, FMUs, and service providers. The Federal Reserve
worked closely with the OCC and FDIC to implement improved examination procedures for the
cybersecurity assessments of the largest, most systemically important banking organizations and
of service providers. Federal Reserve examiners also continued to conduct tailored cybersecurity
assessments at community and regional banking organizations.
The Federal Reserve actively participated in interagency groups, such as the Financial and Banking
Information Infrastructure Committee (FBIIC), to share information and collaborate on cybersecurity
and critical infrastructure issues affecting the financial sector. In coordination with FBIIC members,
the Federal Reserve collaborated with government and industry stakeholders to discuss strategies
to operate safely and effectively throughout the pandemic and plan for the return to normal
operations.

107th Annual Report | 2020

In addition, the Federal Reserve was actively involved in international policy coordination to
address cyber-related risks and efforts to bolster cyber resiliency. The Federal Reserve participated in the development of the Cyber Incident Response and Recovery Survey of Industry Practices issued by the Financial Stability Board (FSB). As part of the G-7 Cyber Expert Group, the Federal Reserve participated in activities to support the G-7 members’ preparedness to coordinate
communications in the event of a significant cross-border cyber incident.

Enforcement Actions
The Federal Reserve has enforcement authority over the financial institutions it supervises and
their affiliated parties. Enforcement actions may be taken to address unsafe and unsound practices or violations of any law or regulation. Formal enforcement actions include cease and desist
orders, written agreements, prompt corrective action directives, removal and prohibition orders,
and civil money penalties.
In 2020, the Federal Reserve completed 59 formal enforcement actions. Civil money penalties
totaling $192,179,939 were assessed. As directed by statute, all civil money penalties are
remitted to either the Treasury or the Federal Emergency Management Agency. The Reserve Banks
completed 38 informal enforcement actions. Informal enforcement actions include memoranda of
understanding, commitment letters, supervisory letters, and board of directors’ resolutions.
Enforcement orders and prompt corrective action directives, which are issued by the Board, and
written agreements, which are executed by the Reserve Banks, are made public and are posted on
the Board’s website (https://www.federalreserve.gov/apps/enforcementactions/search.aspx).
Other Laws and Regulation Enforcement Activity/Actions
The Federal Reserve’s enforcement responsibilities also extend to the disclosure of financial information by state member banks and the use of credit to purchase and carry securities.
Financial Disclosures by State Member Banks
Under the Securities Exchange Act of 1934 and the Federal Reserve’s Regulation H, certain state
member banks are required to make financial disclosures to the Federal Reserve using the same
reporting forms that are normally used by publicly held entities to submit information to the SEC.5

Under section 12(g) of the Securities Exchange Act, certain companies that have issued securities are subject to SEC
registration and filing requirements that are similar to those that apply to public companies. Per section 12(i) of the
Securities Exchange Act, the powers of the SEC over banking entities that fall under section 12(g) are vested with the
appropriate banking regulator. Specifically, state member banks with 2,000 or more shareholders and more than
$10 million in total assets are required to register with, and submit data to, the Federal Reserve. For more information
on the Board’s Regulation H policy action, see appendix E, “Record of Policy Actions.”

Supervision and Regulation

In 2020, two state member banks were required to submit data to the Federal Reserve. The information submitted by these two state member banks is available to the public upon request and is
primarily used for disclosure to the bank’s shareholders and public investors.

Assessments for Supervision and Regulation
On May 24, 2018, EGRRCPA amended provisions in the Dodd-Frank Act as well as other statutes
administered by the Board. One amendment made by EGRRCPA raised the minimum asset
threshold for assessing BHCs and SLHCs for the cost of supervision. Starting with 2018 assessments, BHCs and SLHCs with total consolidated assets between $50 billion and $100 billion were
no longer subject to assessments.
On November 19, 2020, the Board adopted a final rule to raise the minimum threshold for
assessed BHCs and SLHCs and adjusted the amount charged to assessed companies with total
consolidated assets between $100 billion and $250 billion. This aligns the Federal Reserve’s
assessment rule with its enhanced prudential standards framework for large banking organizations and EGRRCPA-related changes to the Federal Reserve’s supervision and regulation of those
companies.
As a collecting entity, the Board does not recognize the supervision and regulation assessments
as revenue nor does the Board use the collections to fund Board expenses; the funds are transferred to the U.S. Treasury. The Board collected and transferred $606,871,191 in 2020 for the
2019 supervision and regulation assessment.

Training and Technical Assistance
The Federal Reserve provides training and technical assistance to foreign supervisors and
minority-owned depository institutions, and engages in industry outreach in connection with supervisory objectives.
Current Expected Credit Losses Implementation
The Financial Accounting Standards Board issued an accounting standard in 2016 that overhauls
the accounting for credit losses with a new impairment model based on the Current Expected
Credit Losses (CECL) methodology. Approximately 200 banking organizations adopted the CECL
methodology in 2020. Remaining banking organizations will adopt through 2023. CECL’s implementation affects a broad range of supervisory activities, including regulatory reports, examinations, and examiner training.
During 2020, Board staff closely monitored the industry’s first year of CECL implementation, provided industry outreach materials on CECL capital transition, and updated examiner training materials and work programs for CECL. Separately, in May and September 2020, the Board along with

107th Annual Report | 2020

the OCC and FDIC issued an Interagency Policy Statement on Allowances for Credit Losses and a
Regulatory Capital Rule: Revised Transition of the CECL Methodology for Allowances, respectively.
International Training and Technical Assistance
In 2020, the Federal Reserve continued to provide training and technical assistance on supervisory matters to foreign central banks and supervisory authorities. Technical assistance normally
involves visits by Federal Reserve staff members to foreign authorities as well as consultations
with foreign supervisors who visit the Board of Governors or the Reserve Banks. Due to travel
restrictions resulting from the pandemic, the Federal Reserve offered a number of training programs virtually for the benefit of foreign supervisory authorities.
During 2020, Federal Reserve staff took part in training assignments led by the International Monetary Fund and the World Bank. Other training partners that collaborated with the Federal Reserve
during 2020 to organize regional training programs included the South East Asian Central Banks
Research and Training Centre and the Association of Bank Supervisors of the Americas.
Efforts to Support Minority-Owned Depository Institutions
The Federal Reserve System implements its responsibilities under section 367 of the Dodd-Frank
Act primarily through its Partnership for Progress (PFP) program. Established in 2008, this program
promotes the viability of minority depository institutions (MDIs) by facilitating activities designed to
strengthen their business strategies, maximize their resources, and increase their awareness and
understanding of supervisory expectations. The Federal Reserve has also taken MDIs into consideration when developing crisis response facilities.
In addition, the Federal Reserve continues to maintain the PFP website, which supports MDIs by
providing them with technical information and links to useful resources (https://www.fedpartnership.gov). Representatives from each of the 12 Federal Reserve Districts, along with staff
from the Divisions of Supervision & Regulation and Consumer & Community Affairs at the Board of
Governors, continue to offer technical assistance tailored to MDIs by providing targeted supervisory guidance, identifying additional resources, and fostering mutually beneficial partnerships
between MDIs and community organizations. As of year-end 2020, the Federal Reserve’s MDI portfolio consisted of 14 state member banks.
Throughout 2020, the System supported MDIs and conducted a number of outreach initiatives,
webinars, and conferences specific to MDIs, including the following:
• Throughout 2020, PFP staff hosted calls with a number of minority investor groups seeking
advice on how to navigate the complex regulatory and statutory requirements for organizing their
planned de novo banking organizations.

Supervision and Regulation

• Over the course of 2020, PFP staff also fielded inquiries from nonbank investors on how they
might best organize for investment into MDIs.
• In March and April, the PFP individually, and in collaboration with the National Bankers Association (NBA), organized conference calls with MDIs to discuss the Federal Reserve’s discount
window operations and explain the Federal Reserve’s newly expanded credit options.
• In April, Governor Michelle Bowman hosted a call with the NBA’s senior leadership to gather
their input on the impact of the COVID event on the NBA’s members and the communities they
serve. The NBA referenced the recommendations in its April 7, 2020, paper on the COVID event
legislative and regulatory agenda.
• In May, the PFP helped promote to the NBA’s MDI membership an “Ask the Regulator” call outlining the Federal Reserve’s Paycheck Protection Program Liquidity Facility.
• In May, PFP staff hosted the majority of the Federal Reserve’s 14 state-member MDIs on a conference call with Governors Lael Brainard and Michelle Bowman, where the MDIs’ executives
shared their perspectives on the effect of the COVID event on their organizations and on the
communities they serve.
• During May, the Community Development Financial Institutions Research Conference was transformed into a four-part webinar series, the second of which featured academic research on
MDIs and credit access for minority-owned firms. The NBA provided the practitioner perspective
as a respondent. Over 130 people attended the webinar.
• In July, the NBA invited its membership to listen in on an “Ask the Fed” session on the Federal
Reserve’s Main Street Lending Program that was targeted to nonprofit entities.
• In September, the Federal Reserve Bank of Kansas City, in partnership with the Board and several other Reserve Banks, hosted the fifth annual forum designed to provide minority bankers
with industry knowledge and development to enhance their careers and grow their professional
networks. The virtual forum included discussions on economic updates and professional development as well as diversity and inclusion strategies.

International Engagement on Supervisory Policies
As a member of several international financial standard-setting bodies, the Federal Reserve
actively participates in efforts to share information and advance sound supervisory policies for
internationally active financial organizations and to enhance the strength, stability, and resilience
of the international financial system.
Basel Committee on Banking Supervision
During 2020, the Federal Reserve contributed to supervisory policy recommendations, reports,
and papers issued for consultative purposes or finalized by the Basel Committee on Banking
Supervision (BCBS) that are designed to improve the supervision of banking organizations’ practices and to address specific issues that emerged during the 2007–09 financial crisis and, more

107th Annual Report | 2020

recently, the COVID event.6 In 2020, significant activity at the BCBS was focused on COVID-related
issues, including monitoring related risks and vulnerabilities of the global banking system.
Some examples of final BCBS documents issued in 2020 include
• Capital treatment of securitisations of non-performing loans (issued in November and available at
https://www.bis.org/bcbs/publ/d511.htm);
• Implementation of Basel standards—A report to G20 Leaders on implementation of the Basel III
regulatory reforms (issued in November and available at https://www.bis.org/bcbs/publ/
d510.htm);
• Sound management of risks related to money laundering and financing of terrorism: revisions to
supervisory cooperation (issued in July and available at https://www.bis.org/bcbs/publ/
d505.htm);
• Climate-related financial risks: a survey on current initiatives (issued in April and available at
https://www.bis.org/bcbs/publ/d502.htm); and
• Progress in adopting the Principles for effective risk data aggregation and risk reporting (issued in
April and available at https://www.bis.org/bcbs/publ/d501.htm).
Some examples of consultative BCBS documents issued in 2020 include
• Principles for operational resilience (issued in August and available at https://www.bis.org/bcbs/
publ/d509.htm);
• Revisions to the principles for the sound management of operational risk (issued in August and
available at https://www.bis.org/bcbs/publ/d508.htm); and
• Capital treatment of securitisations of non-performing loans (issued in June and available at
https://www.bis.org/bcbs/publ/d504.htm).
A comprehensive list of BCBS publications is available at https://www.bis.org/bcbs/
publications.htm.
Financial Stability Board
In 2020, the Federal Reserve continued its participation in a variety of activities of the FSB, an
organization whose mission is to promote international financial stability. The FSB helps coordinate the work of national financial authorities and international standard-setting bodies, and
shares information on supervisory and regulatory practice. As with the Basel Committee, a significant amount of FSB work in 2020 related to monitoring vulnerabilities and sharing information on

The BCBS provides a forum for regular cooperation on banking supervisory matters. Its 45 members comprise central
banks and bank supervisors from 28 jurisdictions.

Supervision and Regulation

COVID event-related developments. The full range of the Federal Reserve’s Financial Stability
Board activities is discussed in section 3, “Financial Stability.”
The FSB also produces a variety of publications, including progress reports, monitoring reports,
guidance, consultative documents, and compendia of better practice. Recent examples include
• Global Transition Roadmap for LIBOR (issued in October and available at https://www.fsb.org/
wp-content/uploads/P161020-1.pdf);
• Enhancing Cross-border Payments: Stage 3 roadmap (issued in October and available at https://
www.fsb.org/wp-content/uploads/P131020-1.pdf);
• Regulation, Supervision and Oversight of “Global Stablecoin” Arrangements (issued in October
and available at https://www.fsb.org/wp-content/uploads/P131020-3.pdf);
• The Use of Supervisory and Regulatory Technology by Authorities and Regulated Institutions:
Market developments and financial stability implications (issued in October and available at
https://www.fsb.org/wp-content/uploads/P091020.pdf);
• Effective Practices for Cyber Incident Response and Recovery: Final Report (issued in October
and available at https://www.fsb.org/wp-content/uploads/P191020-1.pdf);
• 2020 Status Report: Task Force on Climate-related Financial Disclosures (issued in October and
available at https://www.fsb.org/2020/10/2020-status-report-task-force-on-climate-relatedfinancial-disclosures/);
• Regulatory and Supervisory Issues Relating to Outsourcing and Third-Party Relationships: Discussion paper (issued in November and available at https://www.fsb.org/2020/11/regulatory-andsupervisory-issues-relating-to-outsourcing-and-third-party-relationships-discussion-paper/);
• Guidance on Financial Resources to Support CCP Resolution and on the Treatment of CCP Equity
in Resolution (issued in November and available at https://www.fsb.org/2020/11/guidance-onfinancial-resources-to-support-ccp-resolution-and-on-the-treatment-of-ccp-equity-in-resolution/);
• Update to G20 Leaders—COVID-19 pandemic: Financial stability impact and policy responses
(issued in November and available at https://www.fsb.org/2020/11/covid-19-pandemic-financialstability-impact-and-policy-responses/);
• Holistic Review of the March Market Turmoil (issued in November and available at
https://www.fsb.org/wp-content/uploads/P171120-2.pdf); and
• OTC Derivatives Market Reforms: Note on Implementation Progress for 2020 (issued in November
and available at https://www.fsb.org/wp-content/uploads/P251120.pdf).
A comprehensive list of FSB publications is available at https://www.fsb.org/publications.

107th Annual Report | 2020

Committee on Payments and Market Infrastructures
In 2020, the Federal Reserve continued its active participation in the activities of the Committee
on Payments and Market Infrastructures (CPMI), a forum in which central banks promote the
safety and efficiency of payment, clearing and settlement activities, and related arrangements.
The CPMI coordinated with the FSB to advance the G-20 priority to enhance global cross-border
payments. In addition to contributing to the FSB’s report on existing challenges (stage 1) and the
final roadmap (stage 3), the CPMI identified and published a report on the building blocks (stage
2) that can help address the frictions identified in stage 1 and shape the work going forward as
detailed in stage 3. The CPMI also continued its work on financial inclusion, publishing two
follow-up reports to its 2016 paper “Payment Aspects of Financial Inclusion.”
In addition, in conducting its work on financial market infrastructure and market-related reforms,
the CPMI often coordinated with the International Organization of Securities Commissions
(IOSCO). Over the course of 2020, CPMI-IOSCO continued to monitor implementation of the Principles for Financial Market Infrastructures and published an issues paper on central counterparty
default management auctions.
Some examples of 2020 CPMI publications include
• Enhancing cross-border payments: building blocks of a global roadmap (published in July and
available at https://www.bis.org/cpmi/publ/d193.pdf);
• Payment aspects of financial inclusion: application tools (published in September and available at
https://www.bis.org/cpmi/publ/d195.pdf);
• Payment aspects of financial inclusion in the fintech era (published in April and available at
https://www.bis.org/cpmi/publ/d191.pdf); and
• Central counterparty default management auctions—Issues for consideration (published in June
and available at https://www.bis.org/cpmi/publ/d192.pdf).
A comprehensive list of CPMI publications is available at https://www.bis.org/cpmi_publs.
International Association of Insurance Supervisors
The Federal Reserve continued its participation in 2020 in the development of international supervisory standards for the insurance industry. The Federal Reserve participates actively in standardsetting at the International Association of Insurance Supervisors (IAIS) in consultation and collaboration with state insurance regulators, the National Association of Insurance Commissioners, and
the Federal Insurance Office. The Federal Reserve’s participation focuses on those aspects most
relevant to financial stability and consolidated supervision.

Supervision and Regulation

In 2020, the IAIS focused on monitoring the impact of the COVID event on the insurance industry
and facilitating discussions among supervisors. It replaced its planned yearly monitoring of the
industry with more frequent and targeted monitoring. The IAIS published the results of the first
part of this monitoring on its website. This analysis concluded that the insurance industry showed
resilience during the crisis. Solvency ratios declined only slightly around the world from prepandemic levels. However, risks remained from the continued low-interest rate environment, potential for additional credit losses, and additional claims on some lines of business.
The IAIS also made progress on many other projects over the year by working remotely and
increasing the use of virtual conferences. The IAIS issued several final and consultative reports
in 2020.
Papers and reports:
• Issues Paper on Use of Big Data Analytics in Insurance (issued in February and available at
https://www.iaisweb.org/page/supervisory-material/issues-papers/file/89244/issues-paperon-use-of-big-data-analytics-in-insurance)
• Issues Paper on the Implementation of the Recommendations of the Task Force on Climate-related
Financial Disclosures (issued in February and available at https://www.iaisweb.org/page/
supervisory-material/issues-papers/file/88991/issues-paper-on-the-implementation-of-the-tcfdrecommendations)
• Level 2 Document: ICS Version 2.0 for the Monitoring Period (issued in March and available at
https://www.iaisweb.org/page/supervisory-material/insurance-capital-standard/file/89208/
level-2-document-for-ics-version-20-for-the-monitoring-period)
• Application Paper on Liquidity Risk Management (issued in June and available at https://
www.iaisweb.org/page/supervisory-material/application-papers/file/90720/application-paperon-liquidity-risk-management)
• Supervisory Issues Associated with Benchmark Transition from an Insurance Perspective (issued
in July and available at https://www.iaisweb.org/page/supervisory-material/other-supervisorypapers-and-reports/file/90888/iais-report-on-supervisory-issues-associated-with-benchmarktransition-from-an-insurance-perspective)
• Cyber Risk Underwriting Identified Challenges and Supervisory Considerations for Sustainable
Market Development (issued in December and available at https://www.iaisweb.org/page/
supervisory-material/other-supervisory-papers-and-reports/file/94255/cyber-risk-underwritingidentified-challenges-and-supervisory-considerations-for-sustainable-market-development)
• Global Insurance Market Report: Covid-19 Edition (issued in December and available at https://
www.iaisweb.org/page/supervisory-material/financial-stability/global-insurance-market-reportgimar/file/94221/iais-global-insurance-market-report-2020)

107th Annual Report | 2020

Consultative papers:
• Draft Application Paper on the Supervision of Climate-related Risks in the Insurance Sector
(issued in October and available at https://www.iaisweb.org/page/consultations/closedconsultations/2021/application-paper-on-the-supervision-of-climate-related-risks-in-theinsurance-sector/file/92570/application-paper-on-the-supervision-of-climate-related-risks-in-theinsurance-sector)
• Draft Definition and High-level Principles to Inform the Criteria that Will Be Used to Assess Whether
the Aggregation Method Provides Comparable Outcomes to the Insurance Capital Standard
(issued in November and available at https://www.iaisweb.org/page/consultations/closedconsultations/2021/draft-definition-of-comparable-outcomes-and-high-level-principles/file/
93092/public-consultation-on-the-draft-definition-of-comparable-outcomes-and-high-levelprinciples)
• Public Consultation on the Development of Liquidity Metrics: Phase 1—Exposure Approach
(issued in November and available at https://www.iaisweb.org/page/consultations/closedconsultations/2021/development-of-liquidity-metrics-phae-1-exposure-approach/file/93103/
pcd-on-development-of-liquidity-metrics-phase-1-exposure-approach-public)
• Draft Application Paper on Resolution Powers and Planning (issued in November and available at
https://www.iaisweb.org/page/consultations/closed-consultations/2021/application-paper-onthe-supervision-of-climate-related-risks-in-the-insurance-sector/file/93230/application-paper-onresolution-powers-and-planning)

Shared National Credit Program
The Shared National Credit (SNC) program is an interagency review and assessment of risk in the
largest and most complex credits shared by multiple regulated financial institutions. The SNC program is governed by an interagency agreement among the Board, FDIC, and OCC. SNC reviews are
completed in the first and third quarters of the calendar year. Large agent banks receive two
reviews each year while most other agent banks receive a single review each year.
More information on the 2020 Shared National Credit review is available at https://
www.federalreserve.gov/newsevents/pressreleases/bcreg20210225a.htm.

Bank Secrecy Act and Anti-Money Laundering Compliance
The Federal Reserve is responsible for examining institutions for compliance with the Bank
Secrecy Act (BSA) and applicable anti-money laundering (AML) laws and regulations and conducts
such examinations in accordance with the FFIEC’s Bank Secrecy Act/Anti-Money Laundering Examination Manual.

Supervision and Regulation

The Federal Reserve is currently participating in an ongoing interagency effort to update this
manual. Many of the revisions are designed to emphasize and enhance the risk-focused
approach to BSA/AML supervision and to continue to provide transparency into the BSA/AML
examination process.

International Coordination on Sanctions, Anti-Money Laundering, and Counter-Terrorism
Financing
The Federal Reserve participates in a number of international coordination initiatives related to
sanctions, money laundering, and terrorism financing. The Federal Reserve has a long-standing
role in the U.S. delegation to the intergovernmental Financial Action Task Force and its working
groups, contributing a banking supervisory perspective to the formulation of international standards. The Federal Reserve participated in the work of the FSB that resulted in the publication of a
roadmap to enhance cross-border payments in October 2020.
The Federal Reserve also continues to participate in committees and subcommittees through the
Bank for International Settlements. Specifically, the Federal Reserve actively participates in the
AML Experts Group under the BCBS that focuses on AML and countering financing of terrorism
(CFT) issues and assisted in amending, in July 2020, a BCBS publication on the sound management of risks related to money laundering and financing of terrorism, to introduce guidelines on
cooperation and information exchange among prudential and AML/CFT supervisors for banks. In
addition, the Federal Reserve participated in meetings and roundtables during the year to discuss
BSA/AML issues with foreign delegations from Mexico and the United Kingdom. These dialogues
are designed to promote information sharing and understanding of BSA/AML issues between U.S.
and country-specific financial sectors.

Role of Supervisory Guidance
On November 5, 2020, the Federal Reserve Board and the other federal financial regulatory agencies invited comment on a proposal that would codify, with amendments, a statement issued in
September 2018 confirming the role of supervisory guidance.7 The statement explained that
unlike a law or regulation, supervisory guidance does not have the force and effect of law. Accordingly, the statement also clarified that examiners will not criticize a financial institution for a “violation” of supervisory guidance as they would for a violation of a law or regulation.
The Federal Reserve has taken additional steps since issuance of the statement that further align
with its objectives. For instance, staff has conducted additional examiner training, more closely
reviewed draft supervisory communications to institutions, and coordinated with other banking

See proposed rule on the “Role of Supervisory Guidance,” available at https://www.federalregister.gov/documents/
2020/11/05/2020-24484/role-of-supervisory-guidance. See also final rule on the “Role of Supervisory Guidance,”
available at https://www.federalregister.gov/documents/2021/04/08/2021-07146/role-of-supervisory-guidance.

107th Annual Report | 2020

agencies on guidance-related practices. The Federal Reserve remains committed to ensuring the
proper role of guidance in the supervisory process.

Regulatory Reports
The Federal Reserve, along with the other member FFIEC agencies, requires banking organizations
to periodically submit reports that provide information about their financial condition and structure.

Federal Reserve Regulatory Reports
The Federal Reserve requires that U.S. holding companies periodically submit reports that provide
information about their financial condition and structure.8 This information is essential to formulating and conducting financial institution regulation and supervision. It is also used to respond to
information requests by Congress and the public about holding companies and their nonbank subsidiaries. Foreign banking organizations and other entities also are required to periodically submit
reports to the Federal Reserve. For more information on the various reporting forms, see https://
www.federalreserve.gov/apps/reportforms/default.aspx.
Effective during 2020, the following regulatory reporting forms had substantive revisions:
• Consolidated Financial Statements for Holding Companies (FR Y-9C)
– implemented instructions and report form revisions pertaining to capital simplification, the
community bank leverage ratio (CBLR), rules to modify regulations for large banking organizations to more closely align with measures of their risk, high volatility commercial real estate
(HVCRE), operating lease liabilities, and the standardized approach for counterparty credit risk
(SA-CCR);
– revised reporting instructions related to interim final rules issued in response to the COVID
event that included a three-to-five year CECL transition provision, a revised definition of “eligible retained income,” changes to the CBLR qualifying criteria, provisions for the early adoption of SA-CCR, a specific capital treatment for Paycheck Protection Program (PPP) loans, and
a specific capital treatment for participation in the Money Market Liquidity Facility and Paycheck Protection Program Liquidity Facility (MMLF and PPPLF);
– added four new data items related to PPP loans and PPPLF activity;
– consistent with section 4013 of the Coronavirus Aid, Relief, and Economic Security Act
(CARES Act), updated reporting instructions related to troubled debt restructurings and added
two new items to capture the volume and amount outstanding of modified loans;
– updated instructions consistent with the changes to the definition of savings deposits in the
Board’s Regulation D;

Holding companies are defined as BHCs, intermediate holding companies (IHCs), SLHCs, and securities holding
companies.

Supervision and Regulation

– updated instructions and added 11 new line items related to the stress capital buffer for
holding companies subject to the capital plan rule;
– clarified the reporting of shared fees for securities and insurance activities and the reporting
of pledged non-trading equity securities; and
– revised reporting instructions related to the Board’s interim final rule that provides temporary
relief for certain community banking organizations related to certain regulations and reporting
requirements as a result, in large part, of their growth in size from the coronavirus response
(the Temporary Asset Thresholds interim final rule).9
• Statements of Foreign Subsidiaries of U.S. Banks (FR 2314/2314S); Reports of Foreign
Banking Organizations (FR Y-7N/FR Y-7NS); Statements of U.S. Nonbank Subsidiaries of U.S.
Holding Companies (FR Y-11/FR Y-11S)—provided temporary changes associated with the
Temporary Asset Thresholds interim final rule, beginning with the annual FR 2314/FR 2314S,
FR Y-7N/FR Y-7NS, and FR Y-11/FR Y-11S respondents for the December 31, 2020, report
date, which allows for the use of the lesser of total assets as of December 31, 2019, or the
most recent applicable measurement period to determine the applicability of asset-based filing
thresholds for December 31, 2020, through the end of 2021.
• Consolidated Holding Company Report of Equity Investments in Nonfinancial Companies
(FR Y-12)—implemented new items and revisions to align the form and instructions with
Accounting Standards Update 2016-01, “Recognition and Measurement of Financial Assets and
Financial Liabilities.”
• Capital Assessments and Stress Testing Information Collection Q&As Reports (FR Y-14)—
implemented revisions to (1) collect items necessary to comply with the stress capital buffer
requirement; (2) temporarily capture data pertaining to certain aspects of the CARES Act,
including information on firm activity associated with various Federal Reserve lending facilities,
and information regarding emerging risks arising from the COVID event; (3) address questions
related to the reporting of certain CECL and capital data; (4) require firms to submit data necessary for the Board to conduct additional analysis in connection with the resubmission of firms’
capital plans; and (5) better identify risk as part of the stress tests, such as risks related to
wholesale, trading, and counterparty exposures, as well as information related to capital simplifications, total loss-absorbing capacity, and SA-CCR.
• Systemic Risk Report (FR Y-15)—implemented revisions to the report forms and instructions
in response to the enactment of EGRRCPA. These revisions included raising the reporting
threshold from $50 billion to $100 billion in total consolidated assets for U.S. BHCs and covered SLHCs. In addition, foreign banking organizations with combined U.S. assets of $100 billion or more must now file newly created Schedules H through N on behalf of their U.S. intermediate holding company (IHC), if any, and their combined U.S. operations. Further, three new
items were added to the memoranda section of Schedule A, two of which clarify the calculation
9

85 Fed. Reg. 77,345 (December 2, 2020), https://www.govinfo.gov/content/pkg/FR-2020-12-02/pdf/2020-26138.pdf.

107th Annual Report | 2020

of risk-based indicators. The third item captures total non-bank assets. The FR Y-15 forms and
instructions were also revised to add trading volume items to the memoranda section of
Schedule C to capture the trading of securities issued by public sector entities, other fixed
income securities, listed equities, and other securities.
• Complex Institution Liquidity Monitoring Report (FR 2052a)—implemented certain instructional revisions to better align the reporting requirements for large banking organizations with
their risk profiles and to implement a change in the agencies’ liquidity regulations associated
with an institution’s participation in the MMLF or PPPLF.
• Single Counterparty Credit Limits (FR 2590)—created a new form that will allow the Board to
monitor a covered company’s or covered foreign entity’s credit exposure to counterparties in
accordance with the Board’s Single-Counterparty Credit Limits rule.10 The FR 2590 report collects general information about the covered company or covered foreign entity, including its full
legal name, the amount of its capital stock and surplus, and whether it would be considered a
“major covered company” or “major foreign banking organization.” The report also collects
descriptive information about the covered company or covered foreign entity’s exposure to its
top 50 counterparties and the data required to calculate its gross credit exposure, net credit
exposure, and aggregate net credit exposure to those counterparties.
• Consolidated Report of Condition and Income for Edge and Agreement Corporations
(FR 2886b)—updated instructions consistent with the changes to the definition of savings
deposits in the Board’s Regulation D.11

FFIEC Regulatory Reports
The Federal Reserve, along with the other member FFIEC agencies, requires financial institutions
to submit various uniform regulatory reports.12 This information is essential to formulating and
conducting supervision and regulation and for the ongoing assessment of the overall soundness
of the nation’s financial system. For more information on FFIEC reporting forms, see https://
www.ffiec.gov/ffiec_report_forms.htm. During 2020, revisions were made to certain FFIEC
reporting forms to reflect actions taken by the member agencies to provide regulatory relief in
response to the COVID event, described in “Regulatory Developments” later in this section, and
certain sections of the CARES Act. The reporting also was revised to implement certain regulatory
capital and other rulemakings, and the impact of accounting standards. The following FFIEC
reports had substantive revisions:
• Consolidated Reports of Condition and Income (FFIEC 031, 041, 051, collectively “Call
Reports”)—implemented instructional and reporting form revisions related to simplification of
the agencies’ regulatory capital rule, the CBLR framework, HVCRE, SA-CCR, assets excluded
10
11
12

83 Fed. Reg. 38,460 (August 6, 2018), https://www.govinfo.gov/content/pkg/FR-2018-08-06/pdf/2018-16133.pdf.
85 Fed. Reg. 23,445 (April 28, 2020), https://www.govinfo.gov/content/pkg/FR-2020-04-28/pdf/2020-09044.pdf.
The law establishing the FFIEC and defining its functions requires the FFIEC to develop uniform reporting systems for
federally supervised financial institutions. See 12 U.S.C. § 3305.

Supervision and Regulation

from regulatory capital ratios, and the tailoring of requirements for large domestic banking organizations and IHCs. Consistent with the Board’s FR Y-9C report, additional data items were
incorporated related to troubled debt restructurings, PPP loans, and usage of the PPPLF. In addition, data items were added to the Call Reports to reflect usage of the MMLF and assist the
FDIC’s deposit insurance assessment. Instructional changes included the treatment of eligible
retained income, the definition of savings deposits, reporting of extensions of credit to insiders
consistent with the Board’s Regulation O, and transitions for the adoption of CECL and SA-CCR.
Recognizing that programs to address the COVID event may cause institutions to grow temporarily in 2020 and consistent with the Temporary Asset Thresholds interim final rule, instructional revisions permitted certain institutions to report under the CBLR framework that may otherwise have been excluded due to their asset size.
• Regulatory Capital Reporting for Institutions Subject to the Advanced Capital Adequacy
Framework (FFIEC 101)—implemented instructions and report form revisions related to the tailoring of capital requirements for large banking organizations and the exclusion of certain
assets from the supplementary leverage ratio requirements for custodial banks. Member agencies also made instructional revisions related to HVCRE, SA-CCR, transitions for the adoption of
CECL, and the exclusion from regulatory capital ratios of certain low-risk assets and assets
resulting from participation in the MMLF or PPPLF.
• Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks
(FFIEC 002)—added four new items and implemented revisions to the instructions related to
the reporting of troubled debt restructurings under section 4013 of the CARES Act, the impact
of participation in the MMLF and PPPLF on FDIC deposit insurance assessments, and the definition of savings deposits under the Board’s Regulation D.
Also, in response to business disruptions related to the COVID event, the Federal Reserve and
other member FFIEC agencies permitted reporting institutions to use electronic signatures to meet
signing requirements.

Staff Development Programs
The Federal Reserve’s staff development program supports the ongoing development of approximately 3,700 professional supervisory staff, ensuring that they have the requisite skills necessary
to meet their evolving supervisory responsibilities. The Federal Reserve also provides course offerings to staff at state banking agencies. Training activities in 2020 are summarized in table 4.4.

Examiner Commissioning Program
An overview of the Federal Reserve System’s Examiner Commissioning Program for assistant
examiners is set forth in SR 17-6/CA 17-1, “Overview of the Federal Reserve’s Supervisory Education Programs.” Three examiner commissioning tracks are available: (1) community banking organization (CBO), (2) consumer compliance, and (3) large financial institutions (LFI). On average, indi-

107th Annual Report | 2020

Table 4.4. Training for supervision and regulation, 2020
Number of enrollments
Course sponsor or type

Federal Reserve System
FFIEC
Rapid Response2
1

Instructional time
(approximate
training days)1

Number of course
offerings

630

126

380

302

168

22,564

8,245

Federal Reserve
personnel

State and federal
banking agency
personnel

1,639

Training days are approximate. System courses were calculated using five days as an average, with FFIEC courses calculated using four days
as an average.
Rapid Response is a virtual program created by the Federal Reserve System as a means of providing information on emerging topics to
Federal Reserve and state bank examiners.

viduals move through a combination of in-person training, self-paced learning, virtual instruction,
and on-the-job training over a period of about three to four years. Achievement is measured by
completing the required course content, demonstrating on-the-job knowledge, and passing a professionally validated proficiency examination.
In 2020, 99 examiners passed the proficiency examination (42 in CBO, 22 in consumer compliance, and 35 in LFI). Proactive measures were taken to ensure minimal disruption to assistant
examiner progress during the COVID event, including converting courses from in-person to virtual
delivery format.

Continuing Professional Development
Throughout 2020, the Federal Reserve continued to provide supervisory staff (and in many cases,
state examiners through existing partnerships with the Conference of State Banking Supervisors
and FFIEC) with opportunities to maintain job knowledge after commission, get exposure to
emerging concepts and practices, and expand knowledge into highly specialized supervisory
topics. A number of learning and communication solutions were developed, including Rapid
Response webinars, special COVID communications, self-guided learning plans on specialty topics,
and other content produced for just-in-time communication to supervisory staff about pandemicrelated and other emerging issues and policy guidance. Training, consultation, and materials were
also provided to quickly acclimate the Supervision workforce to virtual meeting tools and best
practices needed in the remote work environment.

Regulatory Developments
The Federal Reserve carries out its regulatory responsibilities by developing regulatory policy (rulemakings, supervision and regulation letters, policy statements, and guidance) and reviewing and
acting on a variety of applications filed by banking organizations.

Supervision and Regulation

Rulemakings and Guidance
The Federal Reserve issues new regulations or revises existing regulations in response to laws
enacted by Congress or because of evolving conditions in the financial marketplace. Over 2020,
the Federal Reserve, working with the other federal banking agencies, announced a variety of
policy actions related to addressing the economic effects of the COVID event and promoting the
safety and soundness of the financial system. The Federal Reserve issued the following rules and
statements in 2020 (see table 4.5).
Table 4.5. Federal Reserve or interagency rulemakings/statements (proposed and final), 2020
Date issued

Rulemaking/statement

1/30/2020

Federal Reserve finalizes rule to simplify and increase the transparency of the Board’s rules for determining control of a banking organization.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200130a.htm

1/30/2020

Agencies propose changes to modify Volcker rule “covered funds” restrictions.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200130b.htm

2/6/2020

Federal Reserve Board releases hypothetical scenarios for its 2020 stress test exercises.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200206a.htm

3/4/2020

Federal Reserve Board approves rule to simplify its capital rules for large banks, preserving the strong capital requirements already in place.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200304a.htm

3/6/2020

Agencies invite comment on updates to resolution plan guidance for large foreign banks.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200306b.htm

3/9/2020

Agencies encourage financial institutions to meet financial needs of customers and members affected by coronavirus.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200309a.htm

3/12/2020

Federal and state financial regulatory agencies issue interagency statement on supervisory practices regarding financial institutions affected by
tornadoes in Tennessee.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200312a.htm

3/16/2020

Federal banking agencies encourage banks to use Federal Reserve discount window.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200316a.htm

3/17/2020

Federal banking agencies provide banks additional flexibility to support households and businesses.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200317a.htm

3/22/2020

Agencies provide additional information to encourage financial institutions to work with borrowers affected by the COVID event.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200322a.htm

3/23/2020

Federal Reserve Board announces technical change to support the U.S. economy and allow banks to continue lending to creditworthy households
and businesses.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200323a.htm

3/24/2020

Federal Reserve provides additional information to financial institutions on how its supervisory approach is adjusting in light of the COVID event.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200324a.htm

3/26/2020

Federal agencies encourage banks, savings associations, and credit unions to offer responsible, small-dollar loans to consumers and small
businesses affected by the COVID event.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200326a.htm

3/26/2020

Federal Reserve offers regulatory reporting relief to small financial institutions affected by the COVID event.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200326b.htm

3/27/2020

Agencies announce two actions to support lending to households and business: permitting early adoption of SA-CCR, and providing an extension
of the transition to CECL.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200327a.htm

3/31/2020

Federal Reserve Board announces it will delay by six months the effective date for its revised control framework.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200331a.htm

4/1/2020

Federal Reserve Board announces temporary change to its supplementary leverage ratio rule to ease strains in the Treasury market resulting from
the COVID event and increase banking organizations’ ability to provide credit to households and businesses.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200401a.htm

4/2/2020

Agencies will consider comments on Volcker rule modifications following expiration of comment period.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200402a.htm
(continued)

107th Annual Report | 2020

Table 4.5. Federal Reserve or interagency rulemakings/statements (proposed and final), 2020—continued
Date issued

Rulemaking/statement

4/3/2020

Federal agencies encourage mortgage servicers to work with struggling homeowners affected by the COVID event.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200403a.htm

4/6/2020

Agencies announce changes to the community bank leverage ratio.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200406a.htm

4/7/2020

Agencies issue revised interagency statement on loan modifications by financial institutions working with customers affected by the COVID event.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200407a.htm

4/9/2020

Federal bank regulators issue interim final rule for Paycheck Protection Program Facility.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200409a.htm

4/14/2020

Federal banking agencies to defer appraisals and evaluations for real estate transactions affected by the COVID event.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200414a.htm

4/17/2020

Federal Reserve Board announces rule change to bolster the effectiveness of the Small Business Administration’s Paycheck Protection Program.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200417a.htm

4/24/2020

Federal Reserve Board announces interim final rule to delete the six-per-month limit on convenient transfers from the “savings deposit” definition
in Regulation D.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200424a.htm

4/27/2020

Agencies extend comment period on updates to resolution plan guidance for large foreign banks.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200427a.htm

5/1/2020

Federal Reserve Board finalizes rule to extend by 18 months the initial compliance dates for certain parts of its single-counterparty credit
limit rule.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200501a.htm

5/5/2020

Federal bank regulatory agencies modify liquidity coverage ratio for banks participating in Money Market Mutual Fund Liquidity Facility and
Paycheck Protection Program Liquidity Facility.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200505a.htm

5/6/2020

Agencies extend two resolution plan deadlines.
Joint Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200506a.htm

5/8/2020

Federal financial regulatory agencies issue interagency policy statement on allowances for credit losses and interagency guidance on credit risk
review systems.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200508a.htm

5/15/2020

Regulators temporarily change the supplementary leverage ratio to increase banking organizations’ ability to support credit to households and
businesses in light of the coronavirus response.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200515a.htm

5/20/2020

Federal agencies share principles for offering responsible small-dollar loans.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200520a.htm

5/29/2020

Federal Reserve Board releases annual determination of aggregate consolidated liabilities of financial companies as required by the
Dodd-Frank Act.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200529a.htm

6/2/2020

Agencies issue host state loan-to-deposit ratios.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200602a.htm

6/15/2020

Federal Reserve Board announces it will resume examination activities for all banks, after previously announcing a reduced focus on exam
activity in light of the COVID event.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200615a.htm

6/23/2020

Federal and state regulatory agencies issue examiner guidance for assessing safety and soundness considering the effect of the COVID event on
financial institutions.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200623a.htm

6/24/2020

Agencies release list of distressed or underserved nonmetropolitan middle-income geographies.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200624a.htm

6/25/2020

Financial regulators modify Volcker rule.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200625a.htm

6/25/2020

Agencies finalize amendments to swap margin rule.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200625b.htm

6/25/2020

Federal Reserve Board releases results of stress tests for 2020 and additional sensitivity analyses conducted in light of the COVID event.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200625c.htm

6/26/2020

Agencies release proposed revisions to interagency questions and answers regarding flood insurance.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200626a.htm
(continued)

Supervision and Regulation

Table 4.5. Federal Reserve or interagency rulemakings/statements (proposed and final), 2020—continued
Date issued

Rulemaking/statement

6/29/2020

Federal Reserve Board announces that it is seeking individuals to serve on its Insurance Policy Advisory Committee (IPAC).
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200629a.htm

7/1/2020

Agencies provide largest firms with information for next resolution plans.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200701a.htm

7/15/2020

Federal Reserve Board announces extension of rule change to bolster effectiveness of the Small Business Administration’s Paycheck
Protection Program.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200715a.htm

7/24/2020

Federal Reserve Board finalizes rule that implements technical, clarifying updates to Freedom of Information Act procedures and changes to rules
for the disclosure of confidential supervisory information.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200724a.htm

8/10/2020

Federal Reserve Board announces individual large bank capital requirements, which will be effective on October 1.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200810a.htm

8/13/2020

Federal banking agencies issue joint statement on enforcement of Bank Secrecy Act/Anti-Money Laundering requirements.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200813a.htm

8/21/2020

Agencies issue statement providing additional information for certain Bank Secrecy Act due diligence requirements.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200821a.htm

8/26/2020

Agencies issue three final rules: a final rule that temporarily modifies the community bank leverage ratio, as required by the CARES Act; a final
rule that makes more gradual, as intended, the automatic restrictions on distributions if a banking organization's capital levels decline below
certain levels; and a final rule that allows institutions that adopt the current expected credit losses (CECL) accounting standard in 2020 to
mitigate the estimated effects of CECL on regulatory capital for two years.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200826a.htm

9/1/2020

Federal and state financial regulatory agencies issue interagency statement on supervisory practices regarding financial institutions affected by
Hurricane Laura and California wildfires.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200901b.htm

9/1/2020

Agencies extend comment period on proposed revisions to interagency questions and answers regarding flood insurance.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200901a.htm

9/4/2020

Federal Reserve Board releases corrected stress test results stemming from an error in projected trading losses and as a result, revised the
capital requirements for two banks.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200904a.htm

9/17/2020

Federal Reserve Board releases hypothetical scenarios for second round of bank stress tests.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200917a.htm

9/21/2020

Federal Reserve Board issues Advance Notice of Proposed Rulemaking on an approach to modernize regulations that implement the Community
Reinvestment Act (CRA).
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200921a.htm

9/29/2020

Agencies issue two final rules: a final rule that temporarily defers appraisal and evaluation requirements, and a final rule that neutralizes the
regulatory capital and liquidity effects for banks that participate in certain Federal Reserve liquidity facilities.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200929a.htm

9/30/2020

Federal Reserve Board invites public comment on proposal that would update the Board’s capital planning requirements to be consistent with
other Board rules that were recently modified.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200930a.htm

9/30/2020

Federal Reserve Board announces it will extend for an additional quarter several measures to ensure that large banks maintain a high level of
capital resilience.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200930b.htm

10/20/2020

Agencies finalize rule to reduce the impact of large bank failures.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20201020a.htm

10/20/2020

Agencies issue final net stable funding ratio rule.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20201020b.htm

10/23/2020

Agencies invite comment on proposed rule under Bank Secrecy Act.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20201023a.htm

10/29/2020

Agencies propose regulation on the role of supervisory guidance.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20201029a.htm

10/30/2020

Agencies release paper on operational resilience.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20201030a.htm

11/18/2020

Agencies announce threshold for smaller loan exemption from appraisal requirements for higher-priced mortgage loans.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20201118a.htm
(continued)

107th Annual Report | 2020

Table 4.5. Federal Reserve or interagency rulemakings/statements (proposed and final), 2020—continued
Date issued

Rulemaking/statement

11/18/2020

Agencies announce dollar thresholds in Regulations Z and M for exempt consumer credit and lease transactions.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20201118b.htm

11/19/2020

Federal Reserve Board issues final rule modifying the annual assessment fees for its supervision and regulation of large financial companies.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20201119a.htm

11/19/2020

Agencies release fact sheet to clarify Bank Secrecy Act due diligence requirements for banks and credit unions that offer services to charities
and nonprofits.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20201119b.htm

11/20/2020

Agencies provide temporary relief to community banking organizations.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20201120a.htm

11/30/2020

Agencies issue statement on LIBOR transition.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20201130a.htm

11/30/2020

Federal Reserve Board welcomes and supports release of proposal and supervisory statements that would enable clear end date for U.S. Dollar
LIBOR and would promote the safety and soundness of the financial system.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20201130b.htm

12/3/2020

Federal Reserve Board announces members of its IPAC.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20201203a.htm

12/7/2020

Federal Reserve Board announces annual indexing of reserve requirement exemption amount and of low reserve tranche for 2021.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20201207a.htm

12/9/2020

Agencies announce several resolution plan actions.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20201209a.htm

12/17/2020

Agencies release annual CRA asset-size threshold adjustments for small and intermediate small institutions.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20201217a.htm

12/18/2020

Agencies propose requirement for computer security incident notification.
Joint press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20201218a.htm

12/18/2020

Federal Reserve Board releases second round of bank stress test results.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20201218b.htm

12/18/2020

Federal Reserve Board votes to affirm the Countercyclical Capital Buffer at the current level of 0 percent.
Press release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20201218c.htm

Banking Applications
The Federal Reserve reviews applications submitted by bank holding companies, state member
banks, savings and loan holding companies, foreign banking organizations, and other entities for
approval to undertake various transactions and to engage in new activities. In 2020, the Federal
Reserve acted on 824 applications filed under the six relevant statutes.
The Federal Reserve published the Semiannual Report on Banking Applications Activity, which provides aggregate information on proposals filed by banking organizations and reviewed by the Federal Reserve. The current report as well as historical reports are available at https://
www.federalreserve.gov/publications/semiannual-report-on-banking-applications-activity.htm.

Public Notice of Federal Reserve Decisions and Filings Received
The Board’s website provides information on orders and announcements (https://
www.federalreserve.gov/newsevents/pressreleases.htm) as well as a guide for U.S. and foreign

Supervision and Regulation

banking organizations that wish to submit applications (https://www.federalreserve.gov/
bankinforeg/afi/afi.htm).

Payment System and Reserve Bank
Oversight

The Federal Reserve performs key functions to maintain the integrity of the U.S. payment and
settlement system. These functions help keep cash, check, and electronic transactions moving
reliably through the U.S. economy on behalf of households and businesses and the U.S. Treasury.
This section discusses the key payment system and Reserve Bank oversight activities undertaken
by the Federal Reserve during 2020:
• providing payment services to depository and certain other institutions
• distributing the nation’s currency and coin to depository institutions (also see figure 5.1)
• serving as fiscal agents and depositories for the U.S. government and other entities
• serving as a catalyst for payment system improvements
• conducting Reserve Bank oversight to ensure effective internal controls, operations, and
management

Figure 5.1. The Federal Reserve experiences unprecedented demand for currency during the COVID-19
pandemic
During 2020, the Board monitored trends and revised the Federal Reserve note production order to meet demands for
currency from domestic and international customers. This demand is reflected in the 2021 print order. For more information, see https://www.federalreserve.gov/paymentsystems/coin_currency_orders.htm.

Billions of Pieces

9
8

$100s

Old-design
$100s

$50s

$20s
$10s

$5s

$2s

$1s

1
0
2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Note: In April 2020, the Board revised the FY 2020 order from 5.2 billion to 6.2 billion notes to meet increased demand
for currency due to the COVID-19 pandemic. In collaboration with the Bureau of Engraving and Printing (BEP), the print
order was revised a second time on August 3 to 5.8 billion notes with a change in denominational blend to better meet
the needs of commerce. These changes allowed the BEP to maximize production capacity on the highest priority
denominations.

107th Annual Report | 2020

Payment Services to Depository and Other Institutions
Reserve Banks provide a range of payment and related services to depository and certain other
institutions; these “priced services” include collecting checks, operating an automated clearinghouse (ACH) service, transferring funds and securities, and providing a multilateral settlement
service (see box 5.1).1

Commercial Check-Collection Service
The commercial check-collection service provides a suite of electronic and paper processing
options for forward and return collections.
In 2020, the Reserve Banks recovered 103.2 percent of the total costs of their commercial checkcollection service, including the related private-sector adjustment factor (PSAF) (see box 5.1). Revenue from operations totaled $113.9 million, resulting in net income of $4.8 million. The Reserve
Banks’ operating expenses and imputed costs totaled $109.4 million. Reserve Banks handled
3.8 billion checks in 2020, a decrease of 14.2 percent from 2019 (see table 5.1). The average
daily value of checks collected by the Reserve Banks in 2020 was approximately $30.8 billion, a
decrease of 7.2 percent from the previous year.

Table 5.1. Activity in Federal Reserve priced services, 2018–20
Thousands of items, except as noted

Service
Commercial check
Commercial ACH
Fedwire funds transfer
National settlement
Fedwire securities

Percent change

2020

2019

2018

2019–20

2018–19

3,766,523

4,389,011

4,739,534

-14.2

-7.4

16,548,795

15,583,792

14,691,615

6.2

6.1

184,010

172,435

162,980

9.8

5.8

551

558

579

-1.2

-3.7

4,600

3,246

3,510

41.7

-7.5

Note: Activity in commercial check is the total number of commercial checks collected, including processed and fine-sort items; in commercial
ACH, the total number of commercial items processed; in Fedwire funds transfer and securities transfer, the number of transactions originated
online and offline; and in national settlement, the number of settlement entries processed.

Commercial Automated Clearinghouse Service
The commercial ACH service provides domestic and cross-border batched payment options for
same-day and next-day settlement.
1

Depository institutions are defined as commercial banks, thrifts, and credit unions. Besides playing an important role in
the broader economy by providing transaction accounts, such as checking accounts, to consumers, households, and
businesses, these institutions play an important role in the Federal Reserve System’s payment and settlement system
function.
The ACH enables depository institutions and their customers to process large volumes of payments through electronic
batch processes.

Payment System and Reserve Bank Oversight

Box 5.1. Cost Recovery Requirements
The Federal Reserve must (under the Monetary Control Act of 1980) establish fees for “priced services” to recover, over the long run, all the direct and indirect costs associated with its payment and
settlement system service. Costs include those actually incurred as well as the imputed costs that
would have been incurred—including financing costs, taxes, and certain other expenses—and the
return on equity (profit) that would have been earned if a private business firm had provided the services.1 The imputed costs and imputed profit are collectively referred to as the private-sector adjustment factor (PSAF).
From 2011 through 2020, the Reserve Banks recovered 103.5 percent of the total priced services
costs, including the PSAF (see table A). In 2020, Reserve Banks recovered 101.6 percent of the total
priced services costs, including the PSAF (see table A). The Reserve Banks’ operating expenses and
imputed costs totaled $434.0 million. Revenue from operations totaled $446.9 million, resulting in net
income from priced services of $13.0 million. The Check Services, the Fedwire® Funds and National
Settlement Services, and the Fedwire Securities Service achieved full cost recovery. The FedACH® Service, however, did not achieve full cost recovery because of investment costs associated with the multiyear technology initiative to modernize its processing platform, which was recently implemented.
Table A. Priced services cost recovery, 2011–20
Millions of dollars, except as noted

Year

Revenue from
services1

Operating
Targeted return
expenses and
on equity3
2
imputed costs

Total costs

Cost recovery
(percent)4

2011

478.6

444.4

16.8

461.2

103.8

2012

449.8

423.0

8.9

432.0

104.1

2013

441.3

409.3

4.2

413.5

106.7

2014

433.1

418.7

5.5

424.1

102.1

2015

429.1

397.8

5.6

403.4

106.4

2016

434.1

410.5

4.1

414.7

104.7

2017

441.6

419.4

4.6

424.0

104.1

2018

442.5

428.1

5.2

433.3

102.1

2019

444.0

441.2

5.4

446.5

99.4

2020
2011–20

446.9

434.0

5.9

439.9

101.6

4,441.2

4,226.4

66.3

4,292.7

103.5

Note: Here and elsewhere in this section, components may not sum to totals or yield percentages shown because of rounding. Excludes
amounts related to development of the FedNow Service.
1
For the 10-year period, includes revenue from services of $4,438.1 million and other income and expense (net) of $3.1 million.
2
For the 10-year period, includes operating expenses of $4,094.6 million, imputed costs of $44.1 million, and imputed income taxes
of $87.7 million.
3
From 2011 to 2012, the PSAF was adjusted to reflect the actual clearing balance levels maintained; previously, the PSAF had been
calculated based on a projection of clearing balance levels.
4
Revenue from services divided by total costs. For the 10-year period, cost recovery is 95.6 percent, including the effect of accumulated other comprehensive income (AOCI) reported by the priced services under ASC 715. For details on changes to the estimation
of priced services AOCI and their effect on the pro forma financial statements, refer to note 3 to the “Pro Forma Financial Statements
for Federal Reserve Priced Services” at the end of this section.

According to the Accounting Standards Codification (ASC) Topic 715 (ASC 715), Compensation-Retirement Benefits, the Reserve
Banks recognized a $630.7 million reduction in equity related to the priced services’ benefit plans through 2020. Including this
reduction in equity, which represents a decline in economic value, results in cost recovery of 95.6 percent for the 10-year period. For
details on how implementing ASC 715 affected the pro forma financial statements, refer to note 3 to the pro forma financial
statements at the end of this section.

107th Annual Report | 2020

In 2020, the Reserve Banks recovered 97.5 percent of the total costs of their commercial ACH
services, including the related PSAF. Revenue from operations totaled $159.1 million, resulting in
a net loss of $2.1 million. The FedACH® Service did not achieve full cost recovery because of
investment costs associated with the multiyear technology initiative to modernize its processing
platform, which was recently implemented. The Reserve Banks’ operating expenses and imputed
costs totaled $161.5 million. The Reserve Banks processed 16.5 billion commercial ACH transactions in 2020, an increase of 6.2 percent from 2019 (see table 5.1). The average daily value of
FedACH transfers in 2020 was approximately $122.8 billion, an increase of 9.8 percent from the
previous year.

FedNowSM Service
The FedNow Service is a new real-time gross settlement service that will support nationwide
access to instant payments. The Federal Reserve’s provision of the FedNow Service will provide
core infrastructure to promote ubiquitous, safe, and efficient instant payments in the United
States. The development of the FedNow Service is a high priority of the Federal Reserve.
On August 11, 2020, the Federal Reserve published a Federal Register notice on the FedNow Service’s features and functionality.2 The features and functionality described in the notice represented a key milestone in the FedNow Service’s development and were based on input received
from the public in response to the Board’s 2019 request for comment.3 The build of the core
FedNow Service began in 2020 with a technology strategy that blends Federal Reserve resources
and external vendors and assesses opportunities to leverage emerging technologies. In addition,
the Reserve Banks began work to implement a pilot program in early 2021 to gather input from a
wide range of financial institutions and service providers, connection types, settlement arrangements, and experience levels. The pilot program will help the Federal Reserve further define the
service and industry readiness strategies, as well as help with testing of the service before general availability.
The FedNow Service will launch in 2023 and will be deployed in phases so that the initial service
can be launched expeditiously with additional features and enhancements released in stages after
the initial launch. This phased approach will allow for adjustments and improvements in response
to industry needs or changes in technology. As the Federal Reserve finalizes the service implementation timeline, information for depository institutions will be available through existing Federal
Reserve Bank communication channels.

Service Details on Federal Reserve Actions to Support Interbank Settlement of Instant Payments, 85 Fed. Reg. 48,522
(September 10, 2020).
Federal Reserve Actions to Support Interbank Settlement of Faster Payments, 84 Fed. Reg. 39,297 (August 9, 2019).

Payment System and Reserve Bank Oversight

Fedwire Funds and National Settlement Services
In 2020, the Reserve Banks recovered 105.3 percent of their costs of the Fedwire Funds and
National Settlement Service, including the related PSAF. Revenue from operations totaled
$144.4 million, resulting in a net income of $9.6 million. The Reserve Banks’ operating expenses
and imputed costs totaled $135.0 million in 2020.

Fedwire Funds Service
The Fedwire Funds Service allows its participants to send or receive domestic time-critical payments using their balances at Reserve Banks to transfer funds in real time.
From 2019 to 2020, the number of Fedwire funds transfers originated by depository institutions
increased 9.8 percent, to approximately 184 million (see table 5.1). The average daily value of
Fedwire funds transfers in 2020 was $3.3 trillion, an increase of 19.8 percent from the previous year.

National Settlement Service
The National Settlement Service is a multilateral settlement system that allows participants in
private-sector clearing arrangements to settle transactions using their balances at Reserve Banks.
In 2020, the service processed settlement files for 11 local and national private-sector arrangements. The Reserve Banks processed 9,468 files that contained about 551,000 settlement
entries (see table 5.1). Settlement file activity in 2020 decreased 2.1 percent from 2019, and
settlement entries decreased 1.2 percent. The total value of settlement processed by NSS
increased 7.9 percent, to $23.5 trillion.

Fedwire Securities Service
The Fedwire Securities Service allows its participants to transfer electronically to other service participants certain securities issued by the U.S. Department of the Treasury, federal government
agencies, government-sponsored enterprises, and certain international organizations.4
In 2020, the Reserve Banks recovered 101.1 percent of the costs of their Fedwire Securities Service, including the related PSAF. Revenue from operations totaled approximately $28.8 million,
resulting in a net income of $0.7 million. The Reserve Banks’ operating expenses and imputed
costs totaled $28.1 million in 2020. In 2020, the number of non-Treasury securities transfers processed via the service increased approximately 41.7 percent from 2019, to approximately 4.6 mil4

The expenses, revenues, volumes, and fees reported here are for transfers of securities issued by federal government
agencies, government-sponsored enterprises, and certain international organizations. Reserve Banks provide Treasury
securities services in their role as Treasury’s fiscal agent. These services are not considered priced services. For
details, see “Financing and Securities Services” later in this section.

107th Annual Report | 2020

lion (see table 5.1). The average daily value of Fedwire Securities priced-service transfers in 2020
was approximately $86.7 billion, an increase of 4.1 percent from the previous year.5 The average
daily value of Fedwire Securities transfers in 2020 was more than $1.4 trillion, an increase of
approximately 3.8 percent from the previous year.

FedLine Solutions: Access to Reserve Bank Services
The Reserve Banks’ FedLine Solutions provide depository institutions with a variety of connections
for accessing the Reserve Banks’ payment and information services.
For priced services, the Reserve Banks charge fees for these connections and allocate the associated costs and revenue to the various services. There are currently six FedLine Solutions through
which customers can access the Reserve Banks’ priced services: FedMail, FedLine Exchange,
FedLine Web, FedLine Advantage, FedLine Command, and FedLine Direct. These FedLine Solutions
are designed to meet the individual connectivity, security, and contingency requirements of depository institution customers.
The Reserve Banks continue to focus on increased resiliency and availability of the FedLine Solutions. In 2020, the Reserve Banks advanced the safety and security of FedLine Solutions by
making progress on key infrastructure upgrades and network modernization, as well as through
proactive monitoring of an evolving threat environment and by strengthening endpoint security policies.

Federal Reserve Intraday Credit
The Federal Reserve Board governs the use of Federal Reserve Bank intraday credit, also known
as daylight overdrafts.6 A daylight overdraft occurs when an institution’s account activity creates a
negative balance in the institution’s Federal Reserve account at any time in the operating day. Daylight overdrafts enable an institution to send payments more freely throughout the day than if it
were limited strictly by its available intraday funds balance, increasing efficiency and reducing payment system risk.
Institutions currently hold historically high levels of overnight balances at the Federal Reserve
Banks, while daylight overdrafts remained historically low, as shown in figure 5.2.7

5
6

These values do not include reversals.
See the Payment System Risk policy: https://www.federalreserve.gov/paymentsystems/psr_about.htm. The Payment
System Risk policy recognizes explicitly the role of the central bank in providing intraday balances and credit to healthy
institutions; under the policy, the Reserve Banks provide collateralized intraday credit at no cost.
Before the 2007–09 financial crisis, overnight balances were much lower and daylight overdrafts significantly higher than
levels observed since late 2008. Increases in the overnight balances institutions held at the Reserve Banks have
decreased the demand for intraday credit, and is expected to remain low given the FOMC’s decision to continue to implement monetary policy within a regime of ample reserves.

Payment System and Reserve Bank Oversight

Figure 5.2. Aggregate daylight overdrafts 2007–20

200

Billions of dollars

150

100

Peak daylight overdrafts
Average daylight overdrafts

0
2008

2010

2012

2014

2016

2018

2020

Source: PDR data, PubWeb quarterly PSR data.

Fees collected for daylight overdrafts are also at historically low levels.8 Fees as well as the use of
intraday credit are expected to remain relatively low given the historically high levels of overnight
balances under the ample reserves regime. Additionally, a 2011 policy revision that eliminated
fees for collateralized daylight overdrafts has further contributed to the decrease in fees.

Currency and Coin
The Federal Reserve Board issues the nation’s currency (in the form of Federal Reserve notes) to
28 Federal Reserve Bank offices. The Reserve Banks, in turn, distribute Federal Reserve notes to
depository institutions in response to public demand. Together, the Board and Reserve Banks work
to maintain the integrity of and confidence in Federal Reserve notes.
In 2020, the Board paid $783.4 million to the Treasury’s Bureau of Engraving and Printing (BEP)
for costs associated with the production of 6.4 billion Federal Reserve notes. The volume of Federal Reserve notes issued and outstanding at year-end 2020 totaled 50.3 billion pieces, a
12.2 percent increase from 2019. About 41 percent of this growth was attributable to growth in
demand for $20 notes, and an additional 38.9 percent was attributable to growth in demand for
$100 notes. In 2020, the Reserve Banks distributed 33.5 billion Federal Reserve notes into circulation, a 6.1 percent decrease from 2019, and received 28.1 billion Federal Reserve notes from
circulation, a 17.9 percent decrease from 2019. While there were decreases in both payments
and receipts in 2020, the significantly larger decrease in receipts than payments resulted in a net
8

In light of disruptions from the coronavirus pandemic, the Board took temporary actions to increase the availability of
intraday credit extended by Reserve Banks. Specifically, the Board temporarily (1) suspended net debit caps for primary
credit institutions, (2) authorized a streamlined procedure for secondary credit institutions to request collateralized
intraday credit under the max cap program, and (3) suspended two collections of information that are used to calculate
net debit caps.

107th Annual Report | 2020

payments increase of 3.9 billion notes, or a 258.4 percent increase from 2019. This increase is
from the high demand for currency resulting from the COVID-19 pandemic. The $20 through $100
denominations experienced greater increases in demand than the lower denominations of $1
through $10 notes.
The value of Federal Reserve notes issued and outstanding at year-end 2020 totaled $2,040.7 billion, a 16.0 percent increase from 2019. The year-over-year increase is attributable largely to
demand for $100 notes. The Board estimates that at least one-half of the value of Federal
Reserve notes in circulation is held abroad, mainly as a store of value.
The Reserve Banks also distribute coin to depository institutions on behalf of the U.S. Mint.9 In
2020, Reserve Banks distributed 51.9 billion coins into circulation, a 24.1 percent decrease from
2019, and received 34.0 billion coins from circulation, a 39.4 percent decrease from 2019. The
year-over-year decrease in coin activity is a result of the COVID-19 pandemic, which significantly
disrupted the supply chain and normal circulation patterns for U.S. coins.

Fiscal Agency and Government Depository Services
The Federal Reserve Banks, upon the direction of the Secretary of the Treasury, act as fiscal
agents of the U.S. government.10 The Reserve Banks, in their role as fiscal agents, provide services such as payment services, financing and securities services, and financial accounting and
reporting services, as well as maintain the Treasury’s operating cash account.
To support further the Treasury’s mission, the Reserve Banks develop, operate, and maintain a
number of automated systems and provide associated technology infrastructure services. The
Reserve Banks also provide certain fiscal agency and depository services to other entities.
In 2020, the Reserve Banks, as fiscal agents, supported the Treasury’s implementation of multiple
fiscal policy efforts in response to the COVID-19 pandemic. The Reserve Banks, as payment
system operator, processed and settled approximately 237 million ACH payments and cleared and
settled approximately 39.2 million checks associated with the first two rounds of Economic Impact
Payments (commonly referred to as stimulus checks). The Reserve Banks also processed unemployment benefit payments and auctioned Treasury securities to meet Treasury funding needs.
Reserve Bank expenses for providing fiscal agency and depository services totaled $732.4 million, an increase of $3.4 million, or 0.5 percent (see table 5.2). The Treasury and other entities
9

The Federal Reserve Board is the issuing authority for Federal Reserve notes, while the U.S. Mint, a bureau of the U.S.
Treasury, is the issuing authority for coin.
In accordance with section 15 of the Federal Reserve Act. See https://www.federalreserve.gov/aboutthefed/
section15.htm.

Payment System and Reserve Bank Oversight

Table 5.2. Expenses of the Federal Reserve Banks for fiscal agency and depository services, 2018–20
Thousands of dollars1

Agency and service

2020

2019

2018

Payment services

293,994

292,078

299,619

Financing and Treasury securities services

179,314

191,614

168,387

69,315

65,105

62,985

150,461

139,703

135,660

693,084

688,500

666,651

Department of the Treasury

Financial accounting and reporting services
Technology infrastructure services

Total, Treasury
Other entities
Total reimbursable expenses
1

39,321

40,471

39,344

732,406

728,971

705,995

Service costs include reimbursable pension costs, where applicable. Previous versions of the Annual Report provided a separate line item
for pension expenses.
These costs include the development and support costs of Treasury technology infrastructure.

reimburse the Reserve Banks for the expense of providing fiscal agency and depository services.
Support for Treasury programs accounted for 94.6 percent of expenses, and support for other entities accounted for the remaining 5.4 percent.

Payment Services
The Reserve Banks support the Treasury’s payment services by developing, operating, and maintaining electronic systems that allow the public to receive payments from and authorize payments
to federal agencies, as well as by providing operational and customer support.
The Reserve Banks process payments, such as federal payroll, Social Security benefits, and veterans’ benefits, from the Treasury’s account at the Federal Reserve and process payments made
to the Treasury’s account at the Federal Reserve, which include collections such as fees and debts
owed to the federal government.
In 2020, the Reserve Banks worked with the Treasury to develop modernized business processes
and applications to improve federal payments. The Reserve Banks also continued to support the
Treasury’s efforts to modernize electronic tax collection.
Reserve Bank expenses for providing Treasury payment services were $294.0 million in 2020, an
increase of $1.9 million, or 0.7 percent. The programs that contributed most to Reserve Bank
expenses in 2020 were the Stored Value Card program, the Pay.gov program, and the Invoice Processing Platform program.
The Reserve Banks work with the Treasury to support the Stored Value Card program, which comprises three military cash-management services: EagleCash, EZPay, and Navy Cash. These pro-

107th Annual Report | 2020

grams provide electronic payment methods for goods and services on military bases and Navy
ships. Stored-value cards are in use on more than 80 military bases and installations in 19 countries (including the United States) and on board more than 135 ships. In 2020, the Reserve
Banks continued to provide operations and customer support, replaced legacy equipment, and
developed new functionality and capability for stored-value cards.
The Reserve Banks also work with the Treasury to expand the use of electronic payment services
for payments made to the Treasury’s account at the Federal Reserve. The Reserve Banks operate
and maintain Pay.gov, an application that allows the public to use the internet to initiate and authorize payments to the federal government using a U.S.-held bank account (through ACH Debit), a
credit or debit card, or a digital wallet through services such as PayPal or Amazon Pay. In 2020,
Pay.gov processed 116.2 million online payments valued at $196.3 billion. In addition, the
Reserve Banks operated applications and worked with the Treasury to support the movement of
$59.0 billion in commercial deposits to the Treasury’s account at the Federal Reserve and processed and settled 173 million electronic payment transactions valued at $649.0 billion.
The Reserve Banks also work with the Treasury to support outreach, implementation, development, operations, and maintenance of the Invoice Processing Platform, which provides one integrated, secure system to simplify the management of vendor invoices.11 In 2020, the Invoice Processing Platform program continued to make enhancements and onboard additional federal
agencies and vendors. As more organizations worked remotely in 2020, the Treasury received
additional requests to onboard agencies and vendors to the program.

Financing and Securities Services
The Reserve Banks work closely with the Treasury in support of the financing needed to operate
the federal government, which includes forecasting, scheduling, auctioning, issuing, settling, maintaining, and redeeming marketable Treasury securities (for example, bills, notes, and bonds). The
Reserve Banks also support the Treasury’s efforts to encourage savings by issuing, maintaining,
and redeeming U.S. savings bonds, as well as providing fulfillment services. The Reserve Banks
provide customer service and operate the automated systems that support marketable Treasury
securities and U.S. savings bonds.
In 2020, the Reserve Banks supported record Treasury auction activity in part to support the government's fiscal response to the COVID-19 pandemic. The Reserve Banks, in partnership with the
Treasury, conducted a record 503 auctions, an increase of 178 auctions, or 54.8 percent, over the
previous record of 325 in 2019. Auction activity enabled the Treasury’s awarding a record
$19.7 trillion in wholesale Treasury marketable securities to investors, an increase of $8.0 trillion,
or 67.8 percent, over the previous record of $11.7 trillion awarded in 2019. The Reserve Banks
11

Additional information can be accessed at https://www.ipp.gov/about-ipp/index.

Payment System and Reserve Bank Oversight

also supported the issuance and servicing of $98.1 billion in savings bonds and marketable securities, which are held in the TreasuryDirect system and partnered with the Treasury to introduce the
20-year Treasury bond.
Reserve Bank expenses for financing and securities services were $179.3 million in 2020, a
decrease of $12.3 million, or 6.4 percent, primarily attributable to a change in approach to modernizing an application.

Accounting and Reporting Services
The Reserve Banks support the Treasury’s accounting and reporting functions by forecasting,
monitoring, and managing the government’s overall cash requirements, cash flow, and governmentwide accounting services. The Reserve Banks also support the Treasury’s publication of the daily
and monthly Treasury statements; the Combined Statement of Receipts, Outlays, and Balances of
the United States Government; and the Financial Report of the United States Government.12
Reserve Bank expenses for financial accounting and reporting services were $69.3 million in
2020, an increase of $4.2 million, or 6.5 percent. The programs that contributed most to Reserve
Bank expenses in 2020 were the Cash Accounting Reporting System (CARS) and G-Invoicing.
The Reserve Banks operate and maintain CARS, which handles accounting and reporting for all
federal agencies and is the electronic system of record for the government’s financial data. In
2020, the Reserve Banks worked with the Treasury to expand the transparency and availability of
federal government financial data by integrating CARS with the Treasury’s Data Transparency program. The Reserve Banks also supported the Treasury’s efforts to promote the availability of federal government financial data to the public by launching the Fiscal Data website, a one-stop shop
for federal financial data.13
In addition, the Reserve Banks operate and maintain the G-Invoicing application, which is the longterm solution for federal agencies to manage intragovernmental financial transactions. In 2020,
the Reserve Banks worked with the Treasury to coordinate federal agency outreach and implement

The Daily Treasury Statement summarizes the U.S. Treasury’s cash and debt operations for the federal government on a
modified cash basis and can be accessed at https://fiscal.treasury.gov/reports-statements/dts/. The Monthly Treasury
Statement summarizes the financial activities of the federal government and off-budget federal entities and can be
accessed at https://www.fiscal.treasury.gov/reports-statements/mts/. The Combined Statement of Receipts, Outlays,
and Balances of the United States Government is recognized as the official publication of the government’s receipts and
outlays and can be accessed at https://fiscal.treasury.gov/reports-statements/combined-statement/. The Financial
Report of the United States Government provides the President, Congress, and the American people with a comprehensive view of the federal government's finances and can be accessed at https://fiscal.treasury.gov/reports-statements/
financial-report/.
Fiscal Data can be accessed at https://fiscaldata.treasury.gov.

107th Annual Report | 2020

system enhancements, which will prepare agencies for a federal government mandate to adopt
G-Invoicing for all buy/sell intragovernmental transactions.14

Infrastructure and Technology Services
The Reserve Banks design, build, and maintain the technology infrastructure and environments
that host the majority of applications that the Reserve Banks develop, operate, or maintain on
behalf of the Treasury.
In 2020, the Reserve Banks launched a cloud platform and created a plan to begin migrating
applications into the environment. The Reserve Banks continued to effectively operate infrastructure, modernize aging systems, increase automation to increase efficiency, and implement Agile
management practices to streamline the development process. The Reserve Banks also continued
to strengthen their systems against a host of new and evolving cybersecurity threats.
Reserve Bank expenses for infrastructure and technology services were $150.5 million in 2020,
an increase of $10.8 million, or 7.7 percent.

Services Provided to Other Entities
The Reserve Banks, when permitted by federal statute or when required by the Secretary of the
Treasury, also provide other domestic and international entities with U.S.-dollar-denominated
banking services, which include funds, securities, and gold safekeeping; securities clearing, settlement, and investment; and correspondent banking.
The Reserve Banks also issue and maintain, in electronic form, many federal agency, governmentsponsored enterprise, and certain international organizations securities. The majority of securities
services are performed for the Federal Home Loan Mortgage Association (Freddie Mac), the Federal National Mortgage Association (Fannie Mae), and the Government National Mortgage Association (Ginnie Mae).
Reserve Bank expenses for services provided to other entities were $39.3 million in 2020, a
decrease of $1.2 million, or 2.8 percent.

Evolutions and Improvements to the System
The Federal Reserve performs many functions in the payment system, including payment system
operator, supervisor and regulator of financial institutions and systemically important financial
market utilities, researcher, and catalyst for system improvements.
14

Federal agencies must implement G-Invoicing for new orders by October 2022. Additional information can be accessed
at: https://fiscal.treasury.gov/g-invoice/.

Payment System and Reserve Bank Oversight

Digital Innovations
The Federal Reserve views developments in financial technology through the lens of its longstanding public policy goals of safety and soundness of financial institutions, consumer protection, safety and efficiency for the payment system, and financial stability. Within that framework,
the Federal Reserve is actively engaged in supporting responsible innovation while ensuring associated risks are appropriately identified and managed.
The Federal Reserve is studying the implications of emerging financial technologies, including distributed ledger technologies and associated financial products such as cryptocurrencies and
stablecoins. These technologies have raised fundamental questions about appropriate legal and
regulatory safeguards. The Federal Reserve continues to monitor developments and works with
domestic and international counterparts to better understand and manage the implications of
these innovations.

Payment System Regulatory Activity in 2020
Congress has assigned to the Board responsibility for implementing the Federal Reserve Act and
certain other laws pertaining to a wide range of banking and financial activities, including those
related to the payment and settlement system. The Board implements those laws in part through
its regulations (see the Board’s website at https://www.federalreserve.gov/supervisionreg/
reglisting.htm).

Regulation CC Amendments
In 2019, the Board and the Consumer Financial Protection Bureau jointly issued regulations that
amended Regulation CC.15
The agencies implemented a statutory requirement in the Electronic Funds Availability (EFA) Act to
adjust the dollar amounts under the EFA Act for inflation. The amendments for adjusting the dollar
amounts under the EFA Act for inflation went into effect July 1, 2020.

Other Improvements and Efforts
The Reserve Banks have been engaged in a number of multiyear technology initiatives that will
modernize their priced-services processing platforms. These investments are expected to enhance
efficiency, the overall quality of operations, and the Reserve Banks’ ability to offer additional services, consistent with the longstanding principles of fostering efficiency and safety, to depository
institutions. The Reserve Banks continued to enhance the resiliency and information security posture of the Wholesale Payment Systems through Reserve Bank led cyber initiatives to respond to

Availability of Funds and Collection of Checks, 84 Fed. Reg. 31,687 (July 3, 2019), https://www.govinfo.gov/content/
pkg/FR-2019-07-03/html/2019-13668.htm.

107th Annual Report | 2020

Box 5.2. The Federal Reserve’s Research Work on Central Bank
Digital Currency (CBDC)
Like other central banks, the Federal Reserve is engaged in research into CBDC. Its work does not indicate a decision to issue a CBDC; the research focuses on how a CBDC could improve on an already
safe, effective, dynamic, and efficient domestic payments system and recognizes that implications and
risks must be thought through very carefully. The design of a CBDC would raise important monetary
policy, financial stability, consumer protection, cybersecurity, legal, and privacy considerations that will
require careful thought and analysis.
The Federal Reserve has two core research initiatives currently under way, which are focused on better
understanding technical issues related to CBDC. The Technology Lab at the Federal Reserve Board is
looking at digital currencies broadly with a focus on understanding different technologies and design
implications. Project Hamilton at the Federal Reserve Bank of Boston is focused on developing a hypothetical general-purpose CBDC. These ongoing research and experimentation initiatives are focused on
how a CBDC might act as a complement to existing payment mechanisms—such as cash and bank
deposits—not as a replacement for them.
The Federal Reserve is also actively engaged with a wide variety of stakeholders, such as those from
government, academia, and the private sector, to gather perspectives and expertise about potential
CBDC uses, the range of design options, and other considerations. Additionally, the Federal Reserve is
in contact with international counterparts and is closely following developments in other jurisdictions.
In October 2020, the Federal Reserve, along with six other central banks and the Bank for International
Settlements, published a report that identifies foundational principles for a CBDC to help central banks
meet their public policy objectives.1
1

Bank for International Settlements, Central Bank Digital Currencies: Foundational Principles and Core Features (Bank for International
Settlements, October 2020), https://www.bis.org/publ/othp33.htm.

environmental threats and cyberthreats. The Reserve Banks also recently implemented a new
FedACH-processing platform to improve the efficiency and reliability of FedACH operations. In
2020, the Reserve Banks advanced the safety and security of FedLine Solutions by making progress on key infrastructure upgrades and network modernization, as well as through proactive monitoring of an evolving threat environment and by strengthening endpoint security policies.
During 2020, the Federal Reserve continued work to replace the aging high-speed currency processing equipment and sensors at the Reserve Banks for deployment through 2028. In 2020, the
Federal Reserve selected a vendor to develop the high-speed currency processing equipment for
delivery beginning in 2025. In advance of the production rollout, prototype and preliminary equipment will be installed and tested at pilot offices between 2021 and 2024. A research and development effort was initiated to update currency sensors and camera systems for integration with the
equipment.
The improvement of the efficiency, effectiveness, and security of information technology (IT) services and operations continued to be a central focus of the Reserve Banks. Under the leadership
of the Federal Reserve’s National IT organization and CIO, the System IT Strategic Plan was

Payment System and Reserve Bank Oversight

refreshed in 2020 for 2021–23 to set priorities, align IT direction and resources, and ensure IT
leaders and team members are working towards a common set of goals. The goals of the plan are
security, simplicity, and productivity with priorities in modernized application delivery, cloud and
modern infrastructure, digital work and collaboration, data management and analytics, cybersecurity, and IT workforce skills. National IT continues to guide the plan and track progress toward
the goals.
The Reserve Banks remained vigilant about their cybersecurity posture, investing in risk-mitigation
initiatives and programs and continuously monitoring and assessing cybersecurity risks to operations and protecting systems and data. The Federal Reserve implemented several cybersecurity
initiatives that enhanced identity and access management capabilities; enhanced the ability to
respond to evolving cybersecurity threats with agility, decisiveness, and speed by streamlining
decisionmaking during a cybersecurity incident; and continued to improve continuous monitoring
capabilities of critical assets.
Several Reserve Banks took action in 2020 to maintain and renovate their facilities. Major multiyear facility programs at several Reserve Bank offices continued, focused on updating obsolescent
building systems to ensure infrastructure resiliency and continuity of operations. The Philadelphia
Reserve Bank continued construction activities for its multiyear program to replace its entire
mechanical and electrical infrastructure. Other programs addressed the need to update office and
operations areas in support of efficiency and working environment.
For more information on the acquisition costs and net book value of the Reserve Banks and
Branches, see table G.13 in appendix G (“Statistical Tables”) of this annual report.

Oversight of Federal Reserve Banks
The combined financial statements of the Reserve Banks and the financial statements of each of
the 12 Reserve Banks are audited annually by an independent public accounting firm retained by
the Board of Governors.16 In addition, the Reserve Banks are subject to oversight by the Board of
Governors, which performs its own reviews (see box 5.3).
The Reserve Banks use the 2013 framework established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) to assess their internal controls over financial
reporting, including the safeguarding of assets. The management of each Reserve Bank annually
provides an assertion letter to its board of directors that confirms adherence to COSO standards.

See “Federal Reserve Banks Combined Financial Statements” at https://www.federalreserve.gov/aboutthefed/auditedannual-financial-statements.htm.

107th Annual Report | 2020

Box 5.3. Payment System Research and Analysis
The Federal Reserve conducts research on a wide range of topics related to the design and activities of
payment, clearing, and settlement systems and financial market infrastructures, as well as the role of
these systems in the commercial activities of consumers, businesses, and governments.
In 2020, topics examined in Federal Reserve research included the following:
• measurement and analysis of long-run trends and short-run developments in the use of established
payment methods1
• drivers and potential effects of innovations in the payment system, particularly those related to new
and emerging technologies, such as instant payments
• design, oversight, and regulation of financial market infrastructures
• developments related to payments fraud
For more information, see the Board’s Payment Research website at https://www.federalreserve.gov/
paymentsystems/payres_about.htm; see also Federal Reserve Bank Payments Groups at https://
www.federalreserve.gov/paymentsystems/payres_fedgroups.htm.
1

In particular, see information about recent releases by the Federal Reserve Payments Study, available at https://
www.federalreserve.gov/paymentsystems/fr-payments-study.htm.

The Federal Reserve Board engaged KPMG LLP (KPMG) to audit the 2020 combined and individual
financial statements of the Reserve Banks and the financial statements of the five limited liability
companies (LLCs) that are associated with the Board of Governors’ actions to address the coronavirus pandemic, of which four LLCs are consolidated in the statements of the Federal Reserve
Bank of New York and one LLC is consolidated in the statements of the Federal Reserve Bank of
Boston.17
In 2020, KPMG also conducted audits of internal controls over financial reporting for each of the
Reserve Banks. Fees for KPMG services totaled $10.3 million, of which approximately $3.0 million
was for the audits of the LLCs.18 To ensure auditor independence, the Board of Governors requires
that KPMG be independent in all matters relating to the audits. Specifically, KPMG may not perform services for the Reserve Banks or affiliated entities that would place it in a position of
auditing its own work, making management decisions on behalf of the Reserve Banks, or in any
other way impairing its audit independence. In 2020, the Reserve Banks did not engage KPMG for
significant non-audit services.

In addition, KPMG audited the Office of Employee Benefits of the Federal Reserve System (OEB), the Retirement Plan for
Employees of the Federal Reserve System (System Plan), and the Thrift Plan for Employees of the Federal Reserve
System (Thrift Plan). The System Plan and the Thrift Plan provide retirement benefits to employees of the Board, the Federal Reserve Banks, the OEB, and the Consumer Financial Protection Bureau.
Each LLC will reimburse the Board of Governors for the fees related to the audit of its financial statements from the
entity’s available assets.

Payment System and Reserve Bank Oversight

The Board’s reviews of the Reserve Banks include a wide range of oversight activities, conducted
primarily by its Division of Reserve Bank Operations and Payment Systems. Division personnel
monitor, on an ongoing basis, the activities of each Reserve Bank, Federal Reserve Information
Technology, and the System’s Office of Employee Benefits (OEB). The oversight program identifies
the most strategically important Reserve Bank current and emerging risks and defines specific
approaches to achieve a comprehensive evaluation of the Reserve Banks’ controls, operations,
and management effectiveness.
The comprehensive reviews include an assessment of the internal audit function’s effectiveness
and its conformance to the Institute of Internal Auditors’ (IIA) International Standards for the Professional Practice of Internal Auditing, applicable policies and guidance, and the IIA’s code
of ethics.
The Board also reviews System Open Market Account (SOMA) and foreign currency holdings annually to
• determine whether the New York Reserve Bank, while conducting the related transactions and
associated controls, complies with the policies established by the Federal Open Market Committee (FOMC); and
• assess SOMA-related IT project management and application development, vendor management, and system resiliency and contingency plans.
In addition, KPMG audits the year-end schedule of SOMA participated asset and liability accounts
and the related schedule of participated income accounts. The FOMC is provided with the external
audit reports and a report on the Board review.

Income and Expenses
Annually, the Board releases the Combined Reserve Banks financial statements with financial
information as of December 31 and includes the accounts and results of operations of each of the
12 Reserve Banks.
In 2020, income was $102.0 billion, compared with $103.2 billion in 2019; expenses totaled
$13.6 billion, compared with $47.7 billion in 2019; and net income before remittances to
Treasury totaled $88.6 billion in 2020, compared with $55.5 billion in 2019.
Table 5.3 summarizes the income, expenses, and distributions of net earnings of the Reserve
Banks for 2020 and 2019. Appendix G of this report, “Statistical Tables,” provides more detailed

107th Annual Report | 2020

Table 5.3. Income, expenses, and distribution of net earnings of the Federal Reserve Banks, 2020 and
2019
Millions of dollars

Item
Current income
Loan interest income
SOMA interest income
Other current income1
Net expenses
Operating expenses
Reimbursements
System pension service cost
Interest paid on depository institutions deposits and others
Interest expense on securities sold under agreements to repurchase
Other expenses
Current net income
Net additions to (deductions from) current net income
Treasury securities gains, net
Federal agency and government-sponsored enterprise mortgage-backed securities
(losses) gains, net
Foreign currency translation gains (losses), net
Other additions or deductions

2020

2019

102,036

103,220

358

101,184

102,737

494

482

13,455

45,423

4,926

4,690

-732

-729

662

510

7,883

34,939

711

6,012

88,581

57,797

2,197

-169

664

1,542

-168

-12

-10

2,295

2,170

For Board expenditures

947

814

For currency costs

831

837

Assessments by the Board of Governors2

For Consumer Financial Protection Bureau costs

517

519

Net income before providing for remittances to the Treasury

88,482

55,458

Consolidated variable interest entities: (Loss), net

-1,785

Consolidated variable interest entities: Non-controlling interest loss, net

1,854

Reserve Bank and consolidated variable interest entities net income before providing
for remittances to the Treasury

88,552

55,458

Earnings remittances to the Treasury

86,890

54,893

Net income after providing for remittances to the Treasury

1,662

565

Other comprehensive gain (loss)

-1,276

149

Comprehensive income
Total distribution of net income
Dividends on capital stock
Earnings remittances to the Treasury
1
2

386

714

87,276

55,607

386

714

86,890

54,893

Includes income from priced services and securities lending fees.
A detailed account of the assessments and expenditures of the Board of Governors appears in the Board of Governors Financial Statements (see https://www.federalreserve.gov/aboutthefed/audited-annual-financial-statements.htm).
The Board of Governors assesses the Reserve Banks to fund the operations of the Consumer Financial Protection Bureau.

Payment System and Reserve Bank Oversight

information on the Reserve Banks, including the consolidated LLCs.19 Additionally, appendix G
summarizes the Reserve Banks’ 2020 budget performance and 2021 budgets, budgeting processes, and trends in expenses and employment.

SOMA Holdings
The FOMC has authorized and directed the Federal Reserve Bank of New York to execute open
market transactions to the extent necessary to carry out the domestic policy directive adopted by
the FOMC. The Federal Reserve Bank of New York, on behalf of the Reserve Banks, holds in the
SOMA the resulting securities, which include U.S. Treasuries, federal agency and governmentsponsored enterprise debt securities, federal agency and government-sponsored enterprise
mortgage-backed securities, investments denominated in foreign currencies, and commitments to
buy or sell related securities.20
Table 5.4 summarizes the average daily assets (liabilities), current income (expenses), and
average interest rate of SOMA holdings for 2020 and 2019.

Lending
In 2020, the average daily balance and the average rate of interest earned for Reserve Bank
lending programs were as follows:
• Primary, secondary, and seasonal credit extended was $8,848 million and 0.25 percent.
• Primary Dealer Credit Facility (PDCF) was $6,419 million and 0.25 percent.
• Money Market Mutual Fund Liquidity Facility (MMLF) was $19,062 million and 1.23 percent.
• Paycheck Protection Program Liquidity Facility (PPPLF) was $56,994 million and 0.35 percent.
In addition, the Reserve Banks provided loans to special purpose vehicles (SPVs) that were established to administer liquidity programs created in response to the coronavirus pandemic. These
SPVs provided liquidity to market participants through the purchase of assets in accordance with
the terms of each liquidity program. More information about the SPVs and the related liquidity programs can be found in box 2 in section 3, “Financial Stability.”

Table G.8A is a statement of condition for each Reserve Bank, table G.9 details the income and expenses of each
Reserve Bank for 2020, table G.10 shows a condensed statement for each Reserve Bank for the years 1914 through
2020, and table G.12 gives the number and annual salaries of officers and employees for each Reserve Bank.
See table G.2 in appendix G for a list of Federal Reserve holdings of U.S. Treasuries and federal agency securities.

107th Annual Report | 2020

Table 5.4. System Open Market Account (SOMA) holdings and Loans of the Federal Reserve Banks,
2020 and 2019
Millions of dollars, except as noted

Average daily assets (+)/liabilities (–)
Item
2020

Year-overyear change

2019

Average interest rate
(percent)

Current income (+)/expense (–)
2020

Year-overyear change

2019

2020

2019

SOMA Holdings
Securities purchased under
agreements to resell

98,003

56,971

41,032

723

971

-248

0.74

1.70

4,061,849

2,233,384

1,828,465

67,539

58,532

9,007

1.66

2.62

2,646

2,682

-36

135

137

-2

5.10

Federal agency and GSE
mortgage-backed securities2

1,831,907

1,574,798

257,109

32,338

43,124

-10,786

1.77

2.74

Foreign currency denominated
investments3

21,127

20,744

383

-40

-33

-7

-0.19

-0.16

134,529

273

134,256

489

483

0.36

2.43

0.04

1.85

U.S. Treasury securities1
Government-sponsored enterprise
debt (GSE) securities1

Central bank liquidity swaps

Other SOMA assets5
Total SOMA assets

6,150,135

3,888,856

2,261,279

101,184

102,737

-1,553

1.65

2.64

Securities sold under agreements to
repurchase: primary dealers and
expanded counterparties

-8,749

-4,981

-3,768

-14

-102

0.16

2.04

Securities sold under agreements to
repurchase: foreign official and
international accounts

-226,215

-269,399

43,184

-697

-5,910

5,213

0.31

2.19

Total securities sold under
agreements to repurchase

-234,964

-274,380

39,416

-711

-6,012

5,301

-4,188

-97

-4,091

n/a

Total SOMA liabilities

-239,152

-274,477

35,325

-711

-6,012

5,301

0.30

2.19

Total SOMA holdings

5,910,983

3,614,379

2,296,604

100,473

96,726

3,747

1.70

2.68

Other SOMA liabilities6

0.30
n/a

2.19
n/a

Face value, net of unamortized premiums and discounts.
Face value, which is the remaining principal balance of the securities, net of unamortized premiums and discounts. Does not include
unsettled transactions.
3
Foreign currency denominated assets are revalued daily at market exchange rates.
4
Dollar value of foreign currency held under these agreements valued at the exchange rate to be used when the foreign currency is returned
to the foreign central bank. This exchange rate equals the market exchange rate used when the foreign currency was acquired from the foreign central bank.
5
Cash and short-term investments related to the federal agency and government-sponsored enterprise mortgage-backed securities (GSE
MBS) portfolio.
6
Represents the obligation to return cash margin posted by counterparties as collateral under commitments to purchase and sell federal
agency and GSE MBS, as well as obligations that arise from the failure of a seller to deliver securities on the settlement date.
n/a Not applicable.
* Less than $500,000.
2

Payment System and Reserve Bank Oversight

Pro Forma Financial Statements for
Federal Reserve Priced Services
Table 5.5. Pro forma balance sheet for Federal Reserve priced services, December 31, 2020 and 2019
Millions of dollars

Item

2020

2019

Short-term assets (note 1)
Imputed investments
Receivables
Materials and supplies
Prepaid expenses
Items in process of collection

569.2

656.2

40.8

39.3

0.7

0.6

12.4

12.2

131.7

80.7

Total short-term assets

754.8

789.0

Long-term assets (note 2)
Premises

116.7

111.5

Furniture and equipment

32.8

32.7

Leases, leasehold improvements, and long-term
prepayments

74.7

91.6

Deferred tax asset

178.1

Total long-term assets
Total assets

176.1
402.3

411.9

1,157.1

1,200.9

Short-term liabilities (note 3)
Deferred-availability items

701.0

736.9

Short-term debt

30.5

27.4

Short-term payables

23.4

Total short-term liabilities

24.7
754.8

789.0

Long-term liabilities (note 3)
Long-term debt
Accrued benefit costs
Total long-term liabilities
Total liabilities
Equity (including accumulated other comprehensive loss of
$630.7 million and $618.7 million at December 31,
2020 and 2019, respectively)
Total liabilities and equity (note 3)

6.3

10.1

338.2

341.8
344.5

351.9

1,099.2

1,140.9

57.9

60.0

1,157.1

1,200.9

Note: Components may not sum to totals because of rounding. The accompanying notes are an integral part of these pro forma priced
services financial statements.

107th Annual Report | 2020

Table 5.6. Pro forma income statement for Federal Reserve priced services, 2020 and 2019
Millions of dollars

Item

2020

2019

Revenue from services provided to depository institutions (note 4)

446.2

443.6

Operating expenses (note 5)

426.9

440.7

19.3

2.9

Income from operations
Imputed costs (note 6)
Interest on debt

0.3

Interest on float

-0.8

Sales taxes

3.9

0.3
-4.8
3.4

Income from operations after imputed costs

4.2

-0.3

15.9

3.2

Other income and expenses (note 7)
Investment income

0.7

0.5

Income before income taxes
Imputed income taxes (note 6)
Net income
Memo: Targeted return on equity (note 6)

16.6

3.7

0.8

13.0

2.9

5.9

5.4

Note: Components may not sum to totals because of rounding. The accompanying notes are an integral part of these pro forma priced
services financial statements.

Table 5.7. Pro forma income statement for Federal Reserve priced services, by service, 2020
Millions of dollars

Item
Revenue from services (note 4)
Operating expenses (note 5)

Income from operations
Imputed costs (note 6)
Income from operations after imputed costs
Other income and expenses, net (note 7)
Income before income taxes
Imputed income taxes (note 6)
Net income
Memo: Targeted return on equity (note 6)
Cost recovery (percent) (note 8)

Total

Commercial
check collection

Commercial
ACH

Fedwire
funds

Fedwire
securities

446.2

113.9

159.1

144.4

28.8

426.9

106.9

161.4

131.0

27.6

19.3

7.0

(2.3)

13.4

1.1

3.4

1.1

0.7

1.3

0.3

15.9

5.9

(3.0)

12.1

0.8

0.7

0.2

0.3

0.2

0.0

16.6

6.1

(2.7)

12.4

0.8

3.7

1.4

(0.6)

2.7

0.2

13.0

4.8

(2.1)

9.6

0.7

5.9

1.3

2.0

2.3

0.3

101.6

103.2

97.5

105.3

101.1

Note: Components may not sum to totals because of rounding. Excludes amounts related to development of the FedNow Service. The accompanying notes are an integral part of these pro forma priced services financial statements.
1
Operating expenses include pension costs, Board expenses, and reimbursements for certain nonpriced services.

Payment System and Reserve Bank Oversight

Notes to Pro Forma Financial Statements for Priced Services
(1) Short-Term Assets
Receivables are composed of fees due the Reserve Banks for providing priced services and the
share of suspense- and difference-account balances related to priced services.
Items in process of collection are gross Federal Reserve cash items in process of collection
(CIPC), stated on a basis comparable to that of a commercial bank. They reflect adjustments for
intra-Reserve Bank items that would otherwise be double-counted on the combined Federal
Reserve balance sheet and adjustments for items associated with nonpriced items (such as those
collected for government agencies). Among the costs to be recovered under the Monetary Control
Act is the cost of float, or net CIPC during the period (the difference between gross CIPC and
deferred-availability items, which is the portion of gross CIPC that involves a financing cost), valued
at the federal funds rate. Investments of excess financing derived from credit float are assumed to
be invested in federal funds.

(2) Long-Term Assets
Long-term assets consist of long-term assets used solely in priced services and the priced-service
portion of long-term assets shared with nonpriced services, including a deferred tax asset related
to the priced services pension and postretirement benefits obligation. The tax rate associated with
the deferred tax asset was 22.1 percent for 2020 and 22.2 percent for 2019.
Long-term assets also consist of an estimate of the assets of the Board of Governors used in the
development of priced services.

(3) Liabilities and Equity
Under the matched-book capital structure for assets, short-term assets are financed with shortterm payables and imputed short-term debt, if needed. Long-term assets are financed with longterm liabilities, imputed long-term debt, and imputed equity, if needed. To meet the Federal
Deposit Insurance Corporation (FDIC) requirements for a well-capitalized institution, in 2020 equity
is imputed at 5.0 percent of total assets and 10.3 percent of risk-weighted assets, and 2019
equity is imputed at 5.0 percent of total assets and 10.4 percent of risk-weighted assets.
The Board’s Payment System Risk policy reflects the international standards for financial market
infrastructures developed by the Committee on Payment and Settlement Systems and the Technical Committee of the International Organization of Securities Commissions in the Principles for
Financial Market Infrastructures. The policy outlines the expectation that the Fedwire Services will
meet or exceed the applicable risk-management standards. Although the Fedwire Funds Service
does not face the risk that a business shock would cause the service to wind down in a disorderly

107th Annual Report | 2020

manner and disrupt the stability of the financial system, in order to foster competition with privatesector financial market infrastructures, the Reserve Banks’ priced services will hold six months of
the Fedwire Funds Service’s current operating expenses as liquid net financial assets and equity
on the pro forma balance sheet and, if necessary, impute additional assets and equity to meet the
requirement. The imputed assets held as liquid net financial assets are cash items in process of
collection, which are assumed to be invested in federal funds. In 2020 and 2019, there was sufficient assets and equity such that additional imputed balances were not required.
In accordance with ASC 715, Compensation–Retirement Benefits, the Reserve Banks record the
funded status of pension and other benefit plans on their balance sheets. To reflect the funded
status of their benefit plans, the Reserve Banks recognize the deferred items related to these
plans, which include prior service costs and actuarial gains or losses, on the balance sheet. This
results in an adjustment to the pension and other benefit plan liabilities related to priced services
and the recognition of an associated deferred tax asset with an offsetting adjustment, net of tax,
to accumulated other comprehensive income (AOCI), which is included in equity. The Reserve Bank
priced services recognized a pension asset, which is a component of accrued benefit costs, of
$44.5 million in 2020 and $17.0 million in 2019. The change in the funded status of the pension
and other benefit plans resulted in a corresponding decrease in accumulated other comprehensive
loss of $6.6 million in 2020.

(4) Revenue
Revenue represents fees charged to depository institutions for priced services and is realized
from each institution through direct charges to an institution’s account.

(5) Operating Expenses
Operating expenses consist of the direct, indirect, and other general administrative expenses of
the Reserve Banks for priced services (that is, Check, ACH, FedWire Funds, and FedWire Securities) and the expenses of the Board related to the development of priced services. Board
expenses were $6.7 million in 2020 and $7.0 million in 2019. Operating expenses exclude
amounts related to the development of the FedNow Service.
In accordance with ASC 715, the Reserve Bank priced services recognized qualified pension-plan
service costs of $37.1 million in 2020 and $30.8 million in 2019.21 Operating expenses also
include the nonqualified service costs of $2.1 million in 2020 and $1.6 million in 2019.22 In
2019 Reserve Banks adopted an update to ASC 715 requiring disaggregation of other components of net benefit expense from service costs. ASC 715 does not change the systematic
21

The prior year qualified pension-plan operating expense was restated from $28.8 million to $30.8 million because of the
adoption of ASU 2017-07 in which other components of operating expense were disaggregated from service costs.
The prior year nonqualified net pension expense of $9.9 million was restated to $1.6 million because of the adoption of
ASU 2017-07 in which other components of operating expense were disaggregated from service costs.

Payment System and Reserve Bank Oversight

approach required by generally accepted accounting principles to recognize the expenses associated with the Reserve Banks’ benefit plans in the income statement. As a result, these expenses
do not include amounts related to changes in the funded status of the Reserve Banks’ benefit
plans, which are reflected in AOCI.
The income statement by service reflects revenue, operating expenses, imputed costs, other
income and expenses, and cost recovery. The tax rate associated with imputed taxes was
22.1 percent for 2020 and 22.2 percent for 2019.

(6) Imputed Costs
Imputed costs consist of income taxes, return on equity, interest on debt, sales taxes, and interest
on float. Many imputed costs are derived from the PSAF model. The 2020 cost of short-term debt
imputed in the PSAF model is based on nonfinancial commercial paper rates; the cost of imputed
long-term debt is based on Merrill Lynch Corporate and High Yield Index returns; and the effective
tax rate is derived from U.S. publicly traded firm data, which serve as the proxy for the financial
data of a representative private-sector firm. The after-tax rate of return on equity is based on the
returns of the equity market as a whole.23
Interest is imputed on the debt assumed necessary to finance priced-service assets. These
imputed costs are allocated among priced services according to the ratio of operating expenses,
less shipping expenses, for each service to the total expenses, less the total shipping expenses,
for all services.
Interest on float is derived from the value of float to be recovered for the check and ACH services,
Fedwire Funds Service, and Fedwire Securities Services through per-item fees during the period.
Float income or cost is based on the actual float incurred for each priced service.
The following shows the daily average recovery of actual credit float by the Reserve Banks for
2020 and 2019, in millions of dollars:24

Total float
Float not related to priced services1
Float subject to recovery through per-item fees
1

2020

2019

-248.1

-225.3

-5.4

-9.7

-242.7

-215.6

Float not related to priced services includes float generated by services to government agencies and by other central bank services.

See Federal Reserve Bank Services Private-Sector Adjustment Factor, 77 Fed. Reg. 67,007 (November 8, 2012),
https://www.gpo.gov/fdsys/pkg/FR-2012-11-08/pdf/2012-26918.pdf, for details regarding the PSAF methodology change.
Credit float occurs when the Reserve Banks debit the paying bank for checks and other items prior to providing credit to
the depositing bank.

107th Annual Report | 2020

Float that is created by account adjustments due to transaction errors and the observance of nonstandard holidays by some depository institutions was recovered from the depository institutions
through charging institutions directly. Float subject to recovery is valued at the federal funds rate.
Certain ACH funding requirements and check products generate credit float; this float has been
subtracted from the cost base subject to recovery in 2020 and 2019.

(7) Other Income and Expenses
Other income consists of income on imputed investments. Excess financing resulting from additional equity imputed to meet the FDIC well-capitalized requirements is assumed to be invested
and earning interest at the 3-month Treasury bill rate.

(8) Cost Recovery
Annual cost recovery is the ratio of revenue, including other income, to the sum of operating
expenses, imputed costs, imputed income taxes, and after-tax targeted return on equity.

Consumer and Community Affairs

The Federal Reserve is committed to promoting fair and transparent financial service markets, protecting consumers’ rights, and ensuring that its policies and research take consumer and community perspectives into account. The Board supports consumer financial inclusion and community
development through targeted work in supervision, regulatory policy, and research and analysis.
This section discusses the Federal Reserve’s key consumer and community affairs activities
during 2020:
• formulating and carrying out supervision and examination policy to ensure that financial institutions comply with consumer protection laws and regulations and meet requirements of community reinvestment laws and regulations;
• writing and reviewing regulations that implement consumer protection and community reinvestment laws;
• conducting research, analysis, and data collection to identify and assess emerging consumer and
community development issues and risks to inform policy decisions (also see figure 6.1); and
• identifying issues and advancing what works in community development by engaging, convening,
and informing key stakeholders.

Figure 6.1. Federal Reserve surveys examine the COVID-19 impact on economic well-being
To better understand the pandemic’s impact on consumer financial circumstances, the Federal Reserve conducted surveys in April and July 2020 to supplement the yearly Survey on Household Economics and Decisionmaking. For more on
our consumer and community research, see “Consumer Research and Analysis of Emerging Issues and Policy.”

100

Percent of adults doing at least okay since the pandemic
81

72
63

60
51

0
No employment disruption

Experienced employment disruption
April 2020

All adults

July 2020

Note: All respondents, n = 1,030 in April 2020; 4,174 in July 2020. Key identifies bars in order from left to right.
Employment disruption means a layoff, reduction of hours, or use of unpaid leave.

107th Annual Report | 2020

Consumer Compliance Supervision
The Federal Reserve’s consumer protection supervision program includes a review of state
member banks’ performance under the Community Reinvestment Act (CRA) as well as assessment of compliance with and enforcement of a wide range of consumer protection laws and regulations including, but not limited to, fair lending, unfair or deceptive acts or practices (UDAP), flood
insurance, the Home Mortgage Disclosure Act (HMDA), and the Real Estate Settlement Procedures
Act (RESPA).
The Board’s Division of Consumer and Community Affairs develops policies that govern, and establish requirements for oversight of, the Reserve Banks’ programs for consumer compliance supervision and examination of state member banks and bank holding companies (BHCs).
In addition, the Board coordinates with the prudential regulators and the Consumer Financial Protection Bureau (CFPB) as part of the supervisory coordination requirements under the Dodd-Frank
Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and ensures that consumer
compliance risk is appropriately incorporated into financial institutions’ consolidated riskmanagement programs.
The Board also oversees the development and delivery of examiner training and supervisionrelated budget and technology efforts; analyzes bank and BHC applications related to consumer
protection, convenience and needs, and the CRA; and oversees the handling of certain types of
consumer complaints by the Reserve Banks and directly processes certain consumer complaints
such as congressional complaints and appeals.

Consumer Compliance Examinations
Examinations are the Federal Reserve’s primary method of ensuring compliance with consumer
protection laws and assessing the adequacy of consumer compliance risk-management systems
within regulated entities.1 During 2020, the Board, in conjunction with the federal financial institution regulators and state regulators, took extraordinary measures to support financial institutions
in their efforts to meet the financial and economic needs of consumers and communities affected
by the COVID-19 emergency.

The Federal Reserve has examination and enforcement authority for federal consumer financial laws and regulations for
insured depository institutions with assets of $10 billion or less that are state member banks and not affiliates of covered institutions, as well as for conducting CRA examinations for all state member banks regardless of size. The Federal
Reserve Board also has examination and enforcement authority for certain federal consumer financial laws and regulations for insured depository institutions that are state member banks with $10 billion or less in assets, while the Consumer Financial Protection Bureau has examination and enforcement authority for many federal consumer financial laws
and regulations for insured depository institutions with over $10 billion in assets and their affiliates (covered institutions), as mandated by the Dodd-Frank Act. For data on state member banks and other institutions supervised by the
Federal Reserve (including number and assets of), see section 4, “Supervision and Regulation.”

Consumer and Community Affairs

Recognizing the potential impact of the coronavirus on the customers, members, and operations
of many financial institutions, the agencies in March issued supervisory letters encouraging financial institutions to meet the financial needs of customers and members affected by the coronavirus. and affirming the agencies’ intent to work with affected financial institutions in scheduling
examinations or inspections to minimize disruption and burden.2 This posture included a temporary reduction in examination activities to allow firms to focus on adapting to coronavirus containment actions and provide customers with needed assistance, with the greatest reduction at
smaller banks.3 This also allowed the Federal Reserve and other agencies to focus on outreach
and monitoring to help financial institutions of all sizes understand the challenges and risks of
this new operating environment.
In June, the Federal Reserve announced that examination activities would resume for all firms,
including financial institutions with total consolidated assets of less than $100 billion, since financial institutions had implemented contingency operating plans and adapted operations to the
COVID-19 operating environment.4
As a result of these actions, the number of examinations the Reserve Banks completed in 2020
decreased compared to 2019, from 479 to 311 . In 2020, the breakdown of examinations completed by Reserve Banks included 159 consumer compliance examinations of state member
banks, 138 CRA examinations of state member banks, 14 examinations of foreign banking organizations, and no examinations of Edge Act corporations or agreement corporations.5

Community Reinvestment Act
The CRA requires that the Federal Reserve and other federal banking regulatory agencies
encourage financial institutions to help meet the credit needs of the local communities where
they do business, consistent with safe-and-sound operations. To carry out this mandate, the
Federal Reserve
• examines state member banks to assess their performance under the CRA;
• considers banks’ CRA performance in context with other supervisory information when analyzing
applications for mergers and acquisitions; and

3
4
5

See https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200309a.htm and https://
www.federalreserve.gov/supervisionreg/srletters/SR2004.htm.
See https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200324a.htm.
See https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200615a.htm.
Agency and branch offices of foreign banking organizations, Edge Act corporations, and agreement corporations fall
under the Federal Reserve’s purview for consumer compliance activities. An agreement corporation is a type of bank
chartered by a state to engage in international banking. The bank agrees with the Federal Reserve Board to limit its
activities to those allowed by an Edge Act corporation. An Edge Act corporation is a banking institution with a special
charter from the Federal Reserve to conduct international banking operations and certain other forms of business
without complying with state-by-state banking laws. By setting up or investing in Edge Act corporations, U.S. banks are
able to gain portfolio exposure to financial investing operations not available under standard banking laws.

107th Annual Report | 2020

• disseminates information about community development practices to bankers and the public
through community development offices at the Reserve Banks.6
The Federal Reserve assesses and rates the CRA performance of state member banks in the
course of examinations conducted by staff at the 12 Reserve Banks. During the 2020 reporting
period, the Reserve Banks completed 137 CRA examinations of state member banks. Of those
banks examined, 18 were rated “Outstanding,” 117 were rated “Satisfactory,” 2 were rated
“Needs to Improve,” and none were rated “Substantial Non-Compliance.”
In response to actions taken by banks to support borrowers and communities during the COVID-19
pandemic, the agencies issued guidance to clarify how activities would be considered under the
CRA in March and May.7 The Joint Statement and the Frequently Asked Questions (FAQs) provided
clarification on how both retail and community development activities will be considered in examinations, as well as agency treatment of COVID-19 designated disaster areas. This guidance also
provided clarification on CRA eligibility and reporting standards for the Small Business Administration Paycheck Protection Program (PPP) and the Federal Reserve Main Street Lending Program.
In September, the Board issued an Advanced Notice of Proposed Rulemaking (ANPR) that invited
public comment on an approach to modernize the regulations that implement the CRA by strengthening, clarifying, and tailoring them to reflect the current banking landscape and better meet the
core purpose of the CRA. The ANPR sought feedback on ways to evaluate how banks meet the
needs of low-and moderate-income (LMI) communities and address inequities in credit access.8 By
reflecting significant stakeholder feedback and providing a long period for comment, one objective
of the ANPR is to build a foundation for the banking agencies to come together on a consistent
approach to CRA that has the broad support of the intended beneficiaries as well as banks of different sizes and business models.9
In an Open Board Meeting, Board members and staff spoke to the intent, structure, and goals of
the ANPR, which received unanimous approval by the Board members.10 The ANPR also solicited
feedback on ways to evaluate how banks meet the needs of LMI communities and address inequities in credit access. It sought public comment on an approach to modernize the CRA regulations
by strengthening, clarifying, and tailoring them to reflect the current banking landscape and better
6

8
9

For more information on various community development activities of the Federal Reserve System, see https://
www.fedcommunities.org/.
For more information, see CA 20-4: CRA Consideration for Activities in Response to the Coronavirus at https://
www.federalreserve.gov/supervisionreg/caletters/caltr2004.htm and CA 20-10: Community Reinvestment Act (CRA)
Consideration for Activities in Response to the Coronavirus at https://www.federalreserve.gov/supervisionreg/
caletters/caltr2010.htm.
For more information, see https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200921a.htm.
For comprehensive information related to CRA, see https://www.federalreserve.gov/consumerscommunities/
community-reinvestment-act-proposed-rulemaking.htm.
For the video and materials presented at the Open Board Meeting, see https://www.federalreserve.gov/aboutthefed/
boardmeetings/20200921open.htm.

Consumer and Community Affairs

meet the core purpose of the CRA. Through analysis and questions that contemplate potential
regulatory approaches for assessing performance under the CRA, the ANPR sets forth the goals of
tailoring regulations to bank size and business model while accounting for the different credit
needs of the local communities—including LMI areas—that are at the heart of the statute.11
To inform the analysis and drafting of the CRA ANPR, Board staff gathered extensive CRA performance data to inform potential policy options. The Board released datasets that informed its
analysis in March 2020.12 The Board also continued to update its website (https://
www.federalreserve.gov/consumerscommunities/cra_about.htm) to centralize access to all information regarding the CRA.

Consumer Compliance Enforcement Activities
Fair Lending and UDAP Enforcement
The Federal Reserve is committed to ensuring that institutions it supervises comply fully with the
federal fair lending laws: the Equal Credit Opportunity Act (ECOA), the Fair Housing Act (FHA), and
the Federal Trade Commission Act (FTC Act), which prohibits unfair or deceptive acts or practices.
The ECOA prohibits creditors from discriminating against any applicant, in any aspect of a credit
transaction, on the basis of race, color, religion, national origin, sex, marital status, or age. In addition, creditors may not discriminate against an applicant because the applicant receives income
from a public assistance program or has exercised, in good faith, any right under the Consumer
Credit Protection Act. The FHA prohibits discrimination in residential real-estate-related transactions, including the making and purchasing of mortgage loans, on the basis of race, color, religion,
sex, handicap, familial status, or national origin.
The Federal Reserve supervises all state member banks for compliance with the FHA. The Federal
Reserve and the CFPB have supervisory authority for compliance with the ECOA. For state member
banks with assets of $10 billion or less, the Board has the authority to enforce the ECOA. For
state member banks with assets over $10 billion, the CFPB has this authority.
With respect to the FTC Act and UDAP, the Federal Reserve has supervisory and enforcement
authority over all state member banks, regardless of asset size and consults with the CFPB with
regards to state member banks over $10 billion in assets.
The Board is committed to ensuring that the institutions it supervises comply fully with the prohibition on unfair or deceptive acts or practices as outlined in the FTC Act. An act or practice may be
11

For a list of speeches, see https://www.federalreserve.gov/consumerscommunities/community-reinvestment-actproposed-rulemaking.htm.
For remarks, see https://www.federalreserve.gov/newsevents/speech/brainard20200108a.htm. For press release and
data, see https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200306a.htm.

107th Annual Report | 2020

found to be unfair if it causes or is likely to cause substantial injury to consumers that is not reasonably avoidable by consumers and not outweighed by countervailing benefits to consumers or to
competition. A representation, omission, or practice is deceptive if it is likely to mislead a consumer acting reasonably under the circumstances and is material, and thus likely to affect a consumer’s conduct or decision regarding a product or service.
When examiners find evidence of potential discrimination or potential UDAP violations, they work
closely with the Board’s Fair Lending or UDAP Enforcement staff, who provide additional legal and
statistical expertise and ensure that fair lending and UDAP laws are enforced consistently and rigorously throughout the Federal Reserve System.
With respect to fair lending, pursuant to the ECOA, if the Board has reason to believe that a
creditor has engaged in a pattern or practice of discrimination in violation of the ECOA, the matter
must be referred to the Department of Justice (DOJ). The DOJ reviews the referral and determines
whether further investigation is warranted. A DOJ investigation may result in a public civil enforcement action. Alternatively, the DOJ may decide to return the matter to the Board for administrative
enforcement. When a matter is returned to the Board, staff ensure that the institution takes all
appropriate corrective action.
In 2020, the Board referred two fair lending matters to DOJ. One matter involved discrimination
based on marital status, in violation of the ECOA. This institution improperly required spousal guarantees on loans, in violation of Regulation B. The second matter involved discrimination based on
a pattern or practice of redlining in mortgage lending based on race or national origin.
If there is a fair lending violation that does not constitute a pattern or practice under the ECOA or
a UDAP violation, the Federal Reserve takes action to ensure that the violation is remedied by the
bank. The Federal Reserve frequently uses informal supervisory tools (such as memoranda of
understanding between banks’ boards of directors and the Reserve Banks, or board resolutions)
to ensure that violations are corrected. When necessary, the Board can bring public enforcement
actions.
The Board announced no public UDAP enforcement actions and the termination of two public
enforcement actions for UDAP violations in 2020. In June 2020, the Board terminated a consent
order, initially issued in 2017, against a bank for deceptive practices related to the bank’s mortgage origination services. The order required the bank to pay restitution of approximately $2.8 million to affected consumers and to take other corrective actions.13 In December 2020, the Board
terminated a consent order, initially issued in 2018, against a bank for unfair and deceptive prac-

For more information, see termination announcement at https://www.federalreserve.gov/newsevents/pressreleases/
enforcement20200630a.htm.

Consumer and Community Affairs

tices related to the bank’s offering of certain add-on products. The order required the bank to pay
restitution of approximately $4.75 million to more than 11,000 customers and to take other corrective actions.14
Given the complexity of this area of supervision, the Federal Reserve seeks to provide transparency on its perspectives and processes to the industry and the public. Fair Lending and UDAP
Enforcement staff meet regularly with consumer advocates, supervised institutions, and industry
representatives to discuss fair lending and UDAP issues and receive feedback. Through this outreach, the Board is able to address emerging fair lending and UDAP issues and promote sound fair
lending and UDAP compliance. This includes staff participation in numerous meetings, conferences, and trainings sponsored by consumer advocates, industry representatives, and interagency groups.
To better understand consumer concerns arising from the changes to delivery of financial services
during the pandemic, in 2020, the Board conducted a series of outreach meetings with consumer
advocate groups. These outreach sessions explored areas of concern with respect to existing laws
and policies, as well as potential policy gaps. In addition, outreach and technical assistance
included the annual Board-sponsored interagency webinar on fair lending supervision, which
attracted more than 5,700 registrants in 2020.15

Flood Insurance Enforcement
The National Flood Insurance Act imposes certain requirements on loans secured by buildings or
mobile homes located in, or to be located in, areas determined to have special flood hazards.
Under the Federal Reserve’s Regulation H, which implements the act, state member banks are
generally prohibited from making, extending, increasing, or renewing any such loan unless the
building or mobile home, as well as any personal property securing the loan, are covered by flood
insurance for the term of the loan. The law requires the Board and other federal financial institution regulatory agencies to impose civil money penalties when they find a pattern or practice of violations of the regulation.
In 2020, the Federal Reserve issued six formal consent orders and assessed approximately
$761,000 in civil money penalties against state member banks to address violations of the flood
regulations. These statutorily mandated penalties were forwarded to the National Flood Mitigation
Fund held by the Treasury for the benefit of the Federal Emergency Management Agency.

For more information, see termination announcement at, https://www.federalreserve.gov/newsevents/pressreleases/
enforcement20201208a.htm.
To view the webinar, see “Consumer Compliance Outlook Live” at https://consumercomplianceoutlook.org/outlook-live/
archives/.

107th Annual Report | 2020

Mergers and Acquisitions
The Board is required by law to consider specific factors when evaluating proposed mergers and
acquisitions, including competitive considerations, financial condition, managerial resources
(including compliance with laws and regulations), convenience and needs of the community to be
served (including the record of performance under the CRA), and financial stability.
In evaluating bank applications, the Federal Reserve relies on the banks’ overall compliance
record, including recent fair lending examinations. In addition, the Federal Reserve considers the
CRA records of the relevant depository institutions, assessments of other relevant supervisors,
the supervisory views of examiners, and information provided by the applicant and public commenters. If warranted, the Federal Reserve will also conduct pre-membership exams for a transaction in which an insured depository institution will become a state member bank or in which the
surviving entity of a merger would be a state member bank.16
The Board provides information on its actions associated with these merger and acquisition transactions, issuing press releases and Board Orders for each.17 The Federal Reserve also publishes
semiannual reports that provide pertinent information on applications and notices filed with the
Federal Reserve.18 The reports include statistics on the number of proposals that were approved,
denied, and withdrawn as well as general information about the length of time taken to process
proposals. Additionally, the reports discuss common reasons that proposals have been withdrawn
from consideration. Furthermore, the reports compare processing times for merger and acquisition
proposals that received adverse public comments and those that did not.

Coordination with Other Agencies
Coordination with the Consumer Financial Protection Bureau
During 2020, staff continued to coordinate on supervisory matters with the CFPB in accordance
with the Interagency Memorandum of Understanding on Supervision Coordination with the CFPB.
The agreement is intended to establish arrangements for coordination and cooperation among the
CFPB and the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Association (NCUA), and the Board of Governors. The
agreement strives to minimize unnecessary regulatory burden and to avoid unnecessary duplication of effort and conflicting supervisory directives amongst the prudential regulators. The regulators work cooperatively to share exam schedules for covered institutions and covered activities to
16

In October 2015, the Federal Reserve issued guidance providing further explanation on its criteria for waiving or conducting such pre-merger or pre-membership examinations. For more information, see https://www.federalreserve.gov/
supervisionreg/srletters/SR1511.htm.
To access the Board’s Orders on Banking Applications, see https://www.federalreserve.gov/newsevents/
pressreleases.htm.
For these reports, see https://www.federalreserve.gov/supervisionreg/semiannual-reports-banking-applicationsactivity.htm.

Consumer and Community Affairs

Box 6.1. Supervisory and Policy Responses to Address
COVID-19 Impacts on Consumers
In 2020, the Federal Reserve encouraged financial institutions to work with borrowers who may be
unable to meet their financial obligations and exercised its authority to provide supervisory relief measures to regulated entities. To help banks support consumers, the Board’s Division of Consumer and
Community Affairs worked with the Supervision and Regulation division and other federal banking agencies to issue numerous statements to provide banks with guidance on policy responses.
The agencies sought to provide relief in the areas most critical to households—mortgages, loan modifications, small-dollar loans, and unrestrained access to savings—with a focus on prudent and responsible credit and banking practices.
In addition, to ensure that bankers, consumer groups, and community organizations were informed and
understood the impact of these actions, the Board conducted extensive outreach and communications
through webinars (https://bsr.stlouisfed.org/connectingcommunities/), publications (https://
consumercomplianceoutlook.org/), and guidance and responses to FAQs (https://www.federalreserve
.gov/supervisionreg/caletters/2020.htm).
The supervisory and regulatory actions—including consumer-related actions—are summarized on the
Board’s COVID-19 webpage at https://www.federalreserve.gov/supervisory-regulatory-action-responsecovid-19.htm.

plan simultaneous exams, provide final drafts of examination reports for comment, and share
supervisory information.

Coordination with Other Federal Banking Agencies
The Board regularly coordinates with other federal banking agencies, including through the development of interagency guidance, in order to clearly communicate supervisory expectations. The
Federal Reserve also works with the other member agencies of the Federal Financial Institutions
Examination Council to develop consistent examination principles, standards, procedures, and
report formats.19 In addition, the Federal Reserve participates in the Joint Task Force on Fair
Lending, composed of all of the prudential regulators, the CFPB, the DOJ, and the Department of
Housing and Urban Development (HUD). In 2020, the banking agencies worked together to
develop numerous joint policy statements in response to the impact of COVID-19 in order to support regulatory relief and encourage financial institutions to support consumers and communities
(see box 6.1).

Updating Examination Procedures
In 2020, Board staff worked with other agencies to develop and revise examination procedures to
provide clarity about supervisor expectations regarding consumer compliance. In March, the
member agencies of the Federal Financial Institutions Examination Council (FFIEC) updated guid-

For more information, see https://www.ffiec.gov/.

107th Annual Report | 2020

ance identifying actions that financial institutions should take to minimize the potential adverse
effects of a pandemic.20 This guidance, the Interagency Statement on Pandemic Planning, provided financial institutions direction to periodically review related risk-management plans, including
business continuity plans, to ensure that they are able to continue to deliver products and services in a wide range of scenarios and with minimal disruption.
In July, the Board issued examination procedures for institutions supervised by the Federal
Reserve with total consolidated assets of $10 billion or less to implement credit reporting and
mortgage servicing provisions of the Coronavirus Aid, Relief, and Economic Security Act (CARES
Act).21 The CARES Act, signed into law in March to provide relief to those affected by the COVID-19
emergency, created new responsibilities for furnishers of certain credit information and for mortgage servicers of certain mortgage loans. In these procedures, the Board reiterated that when
exercising supervisory and enforcement responsibilities, it will consider the unique circumstances
impacting borrowers and institutions resulting from the COVID-19 emergency. The Board also will
consider an institution’s good-faith efforts demonstrably designed to support consumers and
comply with consumer protection laws.

Outreach
The Federal Reserve maintains a comprehensive public outreach program to promote consumer
protection, financial inclusion, and community reinvestment. During 2020, the Federal Reserve
continued to enhance its program, contributing to Consumer Compliance Outlook and Outlook Live
seminars to deliver timely, relevant compliance information to the banking industry as well as to
experienced examiners and other regulatory personnel.22
In 2020, four issues of Consumer Compliance Outlook were released, discussing regulatory and
supervisory topics of interest to compliance professionals. This publication is distributed to state
member banks as well as to bank and savings and loan holding companies supervised by the Federal Reserve, among other subscribers.23 In addition, the Federal Reserve offered one Outlook
Live seminar, “2020 Fair Lending Interagency Webinar.”

Examiner Training
The Federal Reserve’s Examiner Training program supports the ongoing professional development
of consumer compliance supervisory staff, from an initial introduction to the Federal Reserve
System through the development of proficiency in consumer compliance topics sufficient to earn

20
21
22
23

For more information, see https://www.federalreserve.gov/supervisionreg/srletters/SR2003.htm.
For more information, see https://www.federalreserve.gov/supervisionreg/caletters/caltr2011.htm.
For more information and to access the publications, see https://consumercomplianceoutlook.org/.
For more information and to download the seminars, see https://consumercomplianceoutlook.org/outlook-live/.

Consumer and Community Affairs

an examiner’s commission and beyond. The goal of these efforts is to ensure that examiners have
the skills necessary to meet their supervisory responsibilities now and in the future.

Consumer Compliance Examiner Commissioning Program
An overview of the Federal Reserve System’s Examiner Commissioning Program for assistant
examiners is set forth in supervision and regulation (SR)/community affairs (CA) letter
SR 17-6/CA 17-1, “Overview of the Federal Reserve’s Supervisory Education Programs.”24
The Consumer Compliance Examiner Commissioning Program is designed to provide an examiner
with (1) a foundation for supervision in the Federal Reserve System and (2) the skills necessary to
effectively perform examiner-in-charge responsibilities at a non-complex community bank. On
average, examiners progress through a combination of self-paced online learning, classroom offerings, virtual instruction, and on-the-job training over a period of two to three years. Achievement is
measured by completing the required course content, demonstrating adequate on-the-job knowledge, and passing a professionally validated proficiency examination.
In 2020, 22 examiners passed the Consumer Compliance Proficiency Examination. The combination of multiple training delivery channels offers learners and Reserve Banks an ability to customize learning and meet training demands more individually and cost effectively. Special instructional and curriculum solutions were deployed throughout 2020 to ensure uninterrupted learning
for supervisory staff at all levels during the pandemic.

Continuing Professional Development
In addition to providing core examiner training, continuing, career-long learning is offered. Opportunities for continuing professional development include online learning modules, special projects
and assignments, self-study programs, rotational assignments, instruction at System schools,
mentoring programs, and a consumer compliance examiner forum held every 18 months. Staff
have access to continuing professional development resources on a variety of topics, including
learning assets for examiners moving into examiner responsibilities at larger financial institutions
and other curated learning content.
In 2020, the System continued to offer Rapid Response sessions. Introduced in 2008, these sessions offer examiners webinars and case studies on emerging issues or urgent training needs that
result from, for example, the implementation of new laws or regulations. Three Rapid Response
sessions with an exclusive consumer compliance focus were designed, developed, and presented
to System staff during 2020. Additionally, 18 Rapid Response sessions were offered that
addressed a broader range of supervisory issues, including consumer compliance issues and spe-

See https://www.federalreserve.gov/supervisionreg/srletters/sr1706.htm.

107th Annual Report | 2020

cial topics to keep supervision function staff informed of the Federal Reserve’s actions during the
pandemic.

Responding to Consumer Complaints and Inquiries
The Federal Reserve investigates complaints against state member banks and selected nonbank
subsidiaries of BHCs (Federal Reserve regulated entities), and forwards complaints against other
creditors and businesses to the agency with relevant authority. Each Reserve Bank investigates
complaints against Federal Reserve regulated entities in its District. The Federal Reserve also
responds to consumer inquiries on a broad range of banking topics, including consumer protection
questions.
Federal Reserve Consumer Help (FRCH) processes consumer complaints and inquiries centrally. In
2020, FRCH processed 36,651 cases. Of these cases, 21,713 were inquiries and the remainder
(14,938) were complaints, with most cases received directly from consumers. Approximately
9.2 percent of cases were referred to the Federal Reserve from other federal and state agencies.
While consumers can contact FRCH by a variety of different channels, more than half of the FRCH
consumer contacts occurred by telephone (59.2 percent). Nevertheless, 40.8 percent (14,981) of
complaint and inquiry submissions were made electronically (via email, online submissions, and
fax), and the online form page received 33,176 visits during the year.

Consumer Complaints
Complaints against Federal Reserve regulated entities totaled 4,318 in 2020. Of the total, 89 percent (3,915) were investigated. Sixty-two percent (2,432) of the investigated complaints involved
unregulated practices, and 38 percent (1,483) involved regulated practices.
Approximately 4 percent of the total complaints were closed without investigation, pending the
receipt of additional information from consumers, referred to another regulatory agency, or withdrawn by the consumer. Six percent of the total complaints were still under investigation in February 2021. (Table 6.1 shows the breakdown of complaints about regulated practices by regulation
or act; table 6.2 shows complaints by product type.)
Complaints about Regulated Practices
The majority of regulated practices complaints concerned prepaid accounts (41 percent), credit
card accounts (30 percent), checking accounts (15 percent), and real estate (5 percent).25 The
most common prepaid complaints related to inability to withdraw funds on the card (49 percent),
error resolution (22 percent), and funds not being deposited on the card (4 percent). The most
25

Real estate loans include adjustable-rate mortgages, residential construction loans, open-end home equity lines of
credit, home improvement loans, home purchase loans, home refinance/closed-end loans, and reverse mortgages.

Consumer and Community Affairs

common credit card complaints related to
inaccurate credit reporting (80 percent), payment errors or delays (4 percent), and account

Table 6.1. Investigated complaints against
state member banks and selected nonbank
subsidiaries of bank holding companies about
regulated practices, by regulation/act, 2020

opening/closing problems (4 percent). The
most common checking account complaints

Regulation/act

Number

related to funds availability not as expected

Regulation AA (Unfair or Deceptive Acts or
Practices)

(42 percent), deposit error resolution (17 per-

Regulation B (Equal Credit Opportunity)

cent), and insufficient funds and overdraft

Regulation BB (Community Reinvestment)

charges (10 percent). The most common real
estate complaints related to payment errors or
delays (12 percent) and escrow problems
(10 percent).
Nineteen regulated practices complaints
alleging credit discrimination on the basis of
prohibited borrower traits or rights were
received in 2020. Fifteen discrimination complaints were related to the race, color, national

Regulation CC (Expedited Funds Availability)
Regulation D (Reserve Requirements)
Regulation DD (Truth in Savings)
Regulation E (Electronic Funds Transfers)

3
72
639

Regulation H (National Flood Insurance
Act/Insurance Sales)
Regulation P (Privacy of Consumer Financial
Information)
Regulation V (Fair and Accurate Credit
Transactions)
Regulation Z (Truth in Lending)

2
10
84
111

Check 21

Garnishment Rule

origin, or ethnicity of the applicant or borrower.

Fair Credit Reporting Act

Four discrimination complaints were related to

Fair Debt Collection Practices Act

either the age or sex of the applicant or bor-

Fair Housing Act

rower. Of the closed complaints alleging credit

Real Estate Settlement Procedures Act

discrimination based on a prohibited basis in

Servicemembers Civil Relief Act (SCRA)

2020, there were three with a violation; how-

4
51

Total

441
7
5
17
1
1,483

ever, they were not related to illegal credit discrimination.
In 69 percent of investigated complaints against Federal Reserve regulated entities, evidence
revealed that institutions correctly handled the situation. Of the remaining 31 percent of investigated complaints, 15 percent were identified errors that were corrected by the bank; 10 percent
were deemed violations of law; and the remainder included matters involving litigation or factual
disputes, internally referred complaints, or information was provided to the consumer.
Complaints about Unregulated Practices
The Board continued to monitor complaints about banking practices not subject to existing regulations. In 2020, the Board received 2,629 complaints against Federal Reserve regulated entities
that involved these unregulated practices. The majority of the complaints were related to electronic transactions/prepaid products (69 percent), checking account activity (12 percent), and
credit cards (9 percent).

107th Annual Report | 2020

Table 6.2. Investigated complaints against state member banks and selected nonbank subsidiaries of
bank holding companies about regulated practices, by product type, 2020
Subject of complaint/product type
Total

All complaints

Complaints involving violations

Number

Percent

Number

Percent

1,483

100

142

Discrimination alleged
Real estate loans

Credit cards

Other

Checking accounts

223

Real estate loans

Credit cards

496

Other

678

100

Nondiscrimination complaints

Note: Percentages may not sum to 100 due to rounding.

Complaint Referrals
In 2020, the Federal Reserve forwarded 10,558 complaints to other regulatory agencies and government offices for investigation. The Federal Reserve forwarded five complaints to HUD that
alleged violations of the FHA and were closed in 2020.26 The Federal Reserve’s investigation of
these complaints revealed no instances of illegal credit discrimination.

Consumer Inquiries
The Federal Reserve received 21,715 consumer inquiries in 2020 covering a wide range of topics.
Consumers were typically directed to other resources, including other federal agencies or written
materials, to address their inquiries.

Consumer Laws and Regulations
Throughout 2020, the Board continued to administer its regulatory responsibilities with respect to
certain entities and specific statutory provisions of the consumer financial services and fair
lending laws. This included drafting regulations and issuing compliance guidance for the industry
and the Reserve Banks and fulfilling its role in consulting with the CFPB on consumer financial services and fair lending regulations for which the CFPB has rulemaking responsibility.

A memorandum of understanding between HUD and the federal bank regulatory agencies requires that complaints
alleging a violation of the FHA be forwarded to HUD.

Consumer and Community Affairs

Small-Dollar Lending Principles
In May, the federal financial regulatory agencies issued Interagency Lending Principles for Offering
Responsible Small-Dollar Loans to encourage supervised banks, savings associations, and credit
unions to offer responsible small-dollar loans to customers for both consumer and small business
purposes.27 In doing so, the agencies recognized the important role that responsibly offered
small-dollar loans can play in helping customers meet their ongoing needs for credit due to temporary cash-flow imbalances, unexpected expenses, or income shortfalls, including during periods of
economic stress, national emergencies, or disaster recoveries. Well-designed small-dollar lending
programs can result in successful repayment outcomes that facilitate a customer’s ability to demonstrate positive credit behavior and transition into additional financial products.
The principles were offered due to the evolving conditions and products in the small-dollar loan
markets over the last several years. The lending principles describe the characteristics of responsible small-dollar loan programs and cover a variety of small-dollar loan structures.28

Interagency Questions and Answers for Flood Insurance Proposal
In July, five federal regulatory agencies, including the Board, issued for public comment new and
revised Interagency Questions and Answers Regarding Flood Insurance.29 The Interagency Questions and Answers, which provide information addressing technical flood insurance-related compliance issues, were last updated in 2011.30
The agencies proposed new questions and answers in light of changes to flood insurance requirements under the agencies’ 2015 joint rule regarding loans in special flood hazard areas. The proposal also revised existing questions and answers to improve clarity and reorganized questions
and answers by topic to make it easier for users to find and review information related to technical
flood insurance topics. The proposal is intended to help reduce the compliance burden for lenders
related to the federal flood insurance laws.
The proposal incorporated new questions and answers in several areas, including
• escrow of flood insurance premiums;
• detached structure exemption to the mandatory purchase of flood insurance requirement; and
• force-placement procedures.

27
28
29

The agencies are the Board of Governors of the Federal Reserve System, the FDIC, the NCUA, and the OCC.
For more information, see https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20200520a1.pdf.
The agencies are the Board of Governors of the Federal Reserve System, the Farm Credit Administration, the FDIC, the
NCUA, and the OCC.
For more information, see Federal Register notice 85 Fed. Reg. 40,442 (July 6, 2020) at https://www.govinfo.gov/
content/pkg/FR-2020-07-06/pdf/2020-14015.pdf and the press release at https://www.federalreserve.gov/
newsevents/pressreleases/files/bcreg20200520a1.pdf.

107th Annual Report | 2020

The public comment period for the proposed questions and answers was extended to November to
ensure adequate time for input.

Annual Indexing of Exempt Consumer Credit and Lease Transactions
In November 2020, the Board and the CFPB announced that the dollar thresholds in Regulation Z
(Truth in Lending) and Regulation M (Consumer Leasing) that will apply in 2021 for determining
exempt consumer credit and lease transactions will remain at $58,300. These thresholds are set
pursuant to statutory changes enacted by the Dodd-Frank Act that require adjusting these thresholds annually based on the annual percentage increase in the Consumer Price Index for Urban
Wage Earners and Clerical Workers (CPI-W). Transactions at or below the thresholds are subject to
the protections of the regulations.31

Annual Indexing of Threshold for Small Loan Exemption from Appraisal
Requirements for Higher-Priced Mortgage Loans
In November 2020, the Board, the CFPB, and the OCC announced that the threshold for exempting
loans from special appraisal requirements for higher-priced mortgage loans would remain the
same in 2021, at $27,200.32 The Dodd-Frank Act amended the Truth in Lending Act to add special
appraisal requirements for higher-priced mortgage loans, including a requirement that creditors
obtain a written appraisal based on a physical visit to the home’s interior before making a higherpriced mortgage loan. The rules implementing these requirements contain an exemption for loans
of $25,000 or less and also provide that the exemption threshold will be adjusted annually to
reflect increases in the CPI-W.

Annual Adjustment to Community Reinvestment Act (CRA) Asset-Size
Thresholds for Small and Intermediate Small Institutions
In December 2020, the Board and the FDIC announced the annual adjustment to the assetsize thresholds used to define “small bank,” and “intermediate small bank” under the CRA
regulations.33
Financial institutions are evaluated under different CRA examination procedures based on their
asset-size classification. Those meeting the small and intermediate small institution asset-size
thresholds are not subject to the reporting requirements applicable to large banks unless they
choose to be evaluated as a large institution.

31
32
33

For more information, see https://www.federalreserve.gov/newsevents/pressreleases/bcreg20201118b.htm.
For more information, see https://www.federalreserve.gov/newsevents/pressreleases/bcreg20201118a.htm.
For more information, see https://www.federalreserve.gov/newsevents/pressreleases/bcreg20201217a.htm.

Consumer and Community Affairs

Annual adjustments to these asset-size thresholds are based on the change in the average of the
CPI-W, not seasonally adjusted, for each 12-month period ending in November, with rounding to the
nearest million.
As a result of the 1.29 percent increase in the CPI-W for the period ending in November 2020, the
definitions of small and intermediate small institutions for CRA examinations were changed as
follows:
• Small bank means an institution that, as of December 31 of either of the prior two calendar
years, had assets of less than $1.322 billion.
• Intermediate small bank means a small institution with assets of at least $330 million as of
December 31 of both of the prior two calendar years and less than $1.322 billion as of
December 31 of either of the prior two calendar years.
These asset-size threshold adjustments took effect on January 1, 2021.

Consumer Research and Analysis of Emerging Issues
and Policy
Throughout 2020, the Board analyzed emerging issues in consumer financial services policies and
practices in order to understand their implications for the consumer risk analyses and supervisory
policies that are core to the Federal Reserve’s functions. This research and analysis also provided
insight into consumer financial decisionmaking.

Researching Issues Affecting Consumers and Communities
In 2020, the Board explored various issues related to consumers and communities by convening
experts, conducting original research, and fielding surveys as part of its continuing to commitment
to gain insights into consumers’ financial and communities’ economic development experiences.
The expansion of this work during 2020 was essential to informing the Board’s policy work in
responding to the COVID-19 emergency, particularly as these efforts were aimed at ameliorating
conditions for economically vulnerable households and areas. The information gleaned from these
outreach efforts provided insights that informed Federal Reserve actions in supervisory, economic,
and lending facilities responses.

Household Economics and Decisionmaking
In order to better understand consumer decisionmaking in the rapidly evolving financial services
sector, the Board periodically conducts internet panel surveys to gather data on consumers’ experiences and perspectives on various issues of interest.

107th Annual Report | 2020

Results of the Board’s seventh annual Survey of Household Economics and Decisionmaking
(SHED) were published in the Report on the Economic Well-Being of U.S. Households in 2019, Featuring Supplemental Data from April 2020, released in May 2020.34 The survey results reflected
the financial situation at the end of 2019; however, many families had their financial lives disrupted in 2020 due to the COVID-19 pandemic. To understand the extent of these disruptions, the
Federal Reserve Board implemented two smaller follow-up surveys. The first was fielded in the first
week of April 2020 with results included in the May report. The second was fielded in July 2020,
with results published in the Update on the Economic Well-Being of U.S. Households: July 2020
Results.35
The Board first launched the survey in 2013 to understand better consumer decisionmaking in the
wake of the Great Recession, with the aim to capture a snapshot of the financial and economic
well-being of U.S. households. In doing so, the SHED collects information on households that is
not readily available from other sources or is not available in combination with other variables of
interest.
The survey asked respondents about specific aspects of their financial lives, including the following areas:
• employment and informal work
• income and savings
• economic preparedness
• banking and credit
• housing and living arrangements
• education and human capital
• education debt and student loans
• retirement
Fielded in October 2019, the findings of the 2019 survey reflected that the financial experiences
of individual families were generally positive in the United States before the pandemic, consistent
with the economic improvements over the prior six years. The majority of families were faring substantially better than they were when the survey began in 2013. However, the results highlighted
areas of persistent challenges and economic disparities across financial measures, even before
the spread of COVID-19 in the United States. In particular, the substantial disparities in overall

For the report and related data from the Survey of Household Economics and Decisionmaking, see https://
www.federalreserve.gov/consumerscommunities/shed.htm.
For the July survey report, downloadable data, and a video summarizing the findings, see https://
www.federalreserve.gov/consumerscommunities/shed.htm.

Consumer and Community Affairs

well-being by race and ethnicity remained in 2019, and the disparity by education widened in
recent years.
While most adults were faring reasonably well financially, results also showed that a substantial
minority of adults were financially vulnerable at the time of the survey and either could not pay
their current month’s bills in full or would have struggled to do so if faced with an emergency
expense as small as $400. Even fewer had three months of emergency savings to cover expenses
in the event of a job loss. This highlights the precarious financial situation that some families were
in before the COVID-19 pandemic.
The 2019 survey also explored long-run financial circumstances, including returns to education,
housing satisfaction, and retirement savings. It included several new topics that have not been
asked in previous years of the survey. These new topics included self-perceptions of discrimination, differences in work locations by education level, and the repercussions of outstanding legal
expenses and court costs. Additionally, the survey continued to monitor emerging issues that may
be important to the economy in the future, such as experiences working in the gig economy.
Recognizing that these survey results reflected the financial situation at the end of 2019, the April
and July 2020 surveys provided insights into how families were faring after the community spread
of COVID-19 as well as measures implemented to limit its spread. In early April, the supplemental
survey demonstrated that a substantial number of people experienced layoffs or reductions in
hours worked and highlighted the extent to which some families dealing with layoffs have
struggled to pay their monthly bills. Yet, it also indicated that those not experiencing employment
disruptions generally were still faring relatively well financially as of early April.
The July 2020 survey subsequently showed that U.S. families were faring better financially in July
than in April, but many still faced uncertainty regarding layoffs and prospects for returning to work.
In July, 77 percent of adults said they were doing at least okay financially, up from 72 percent in
early April and 75 percent in October 2019. This increase was likely due to some people returning
to work as well as the availability of assistance programs either from the government or from
charitable organizations.
A substantial number of families received one or more forms of financial assistance, and the
effects of these programs were apparent in people’s overall financial well-being and ability to cover
expenses. The July survey demonstrated that people appeared better able to handle small financial emergencies than they were nine months prior in October 2019. Seventy percent of adults
said in July that they would be able to pay an unexpected $400 emergency expense entirely by
using cash, savings, or a credit card paid off at the next statement—an increase from 63 percent
in October.

100 107th Annual Report | 2020

In addition to fielding and analyzing these surveys, economists in the Division of Consumer and
Community Affairs published articles throughout the year in various publications and journals, contributing to body of research exploring issues impacting consumers and communities.36

Analysis of Emerging Issues
Board staff analyze data and anticipate trends, monitor legislative activity, form working groups,
and organize expert roundtables to identify emerging consumer risks and inform supervision,
research, and policy. In 2020, the Board analyzed a broad range of issues in financial services
markets that potentially pose risks to consumers:
• Consumer risk workshop: Hosted a consumer risk-focused workshop in July for staff from
across the Board, Reserve Banks, and other federal agencies. Discussion topics focused on
balancing macro- and micro-consumer risks with data-driven tools and innovative techniques for
identifying heightened risks to consumers.
• Retail banking: Published articles that explored two aspects of changes in retail banking: the
implications of faster payments for cash-flow-constrained consumers and the emergence of
online-only subsidiaries of traditional brick-and-mortar banks.37
• Mortgage credit: Analyzed the small-dollar mortgage market to understand the nature of banks’
engagement in this sector and to assess opportunities for improving access to credit and
reducing burden.
• Housing: Tracked general housing market trends, with a particular focus on the impact of
COVID-19 on homeownership and rental housing, including risk of foreclosure and evictions.
• Small business lending: Monitored credit availability for smaller firms that often lack the
financing options and in-house financial expertise of larger firms.
See box 6.2 for information about related publications presenting analyses of how consumers,
communities, and community development organizations responded to the pandemic. Much of this
work focused, in particular, on such issues as measuring the economic impact of the pandemic,
the role and operations of community development financial institutions in responding to the pandemic, trends in complaints consumers had about their experiences with financial institutions, and
survey results of organizations providing services to LMI communities during the pandemic.38

For papers by the Federal Reserve Board, see Theodore F. Figinski and Erin Troland, “Health Insurance and Hospital
Supply: Evidence from 1950s Coal Country,” FEDS working paper at https://www.federalreserve.gov/econres/feds/
health-insurance-and-hospital-supply-evidence-from-1950s-coal-country.htm; and Jeff Larrimore and Erin Troland,
“Improving Housing Payment Projections during the COVID-19 Pandemic,” at https://www.federalreserve.gov/econres/
notes/feds-notes/improving-housing-payment-projections-during-the-covid-19-pandemic-20201020.htm.
For the articles, see the August 2020 edition of Consumer and Community Context at https://www.federalreserve.gov/
publications/2020-August-consumer-community-context.htm.
For the publication, see Consumer & Community Context, November 2020, at https://www.federalreserve.gov/
publications/2020-November-consumer-community-context.htm.

Consumer and Community Affairs 101

Box 6.2. Meeting the Need for Real-Time Data and Insights on
Consumers’ Experiences
In mid-March, as the country confronted the public health crisis sparked by the coronavirus, federal,
state, and local governments began issuing stay-at-home orders to contain the virus. Many businesses
shuttered, workplaces and schools moved to full-time virtual operations, and consumers and communities were faced with financial uncertainty and loss of income.
As the magnitude of the potential economic fallout became clearer, the federal government and the
Federal Reserve launched emergency programs to provide immediate relief by providing fiscal support
to businesses and households so they could continue to meet financial obligations (see box 6.1).
Given the sudden onset and unprecedented nature of this crisis, there were limited data available to
guide policy; thus, policymakers sought to provide access to financial relief through many channels
while simultaneously working to understand the issues that consumers and communities were facing.
To help gather real-time data and community-level insights to inform the Board’s actions and decisions on how best to support the economic stability of consumers and communities, the Division of
Consumer and Community Affairs (DCCA) throughout the year conducted targeted research, surveys,
and data analysis as well as outreach to key community stakeholders.

Research, Data, and Analysis
To help provide insight into how households were faring financially, the Board issued two supplements
to its annual Survey of Household Economic and Decisionmaking in April and July 2020, to update the
2019 survey. These additional surveys, each of just over 1,000 adults, focused on the labor market
effects of households’ overall financial circumstances amid closures and stay-at-home orders, which
highlighted the impact of the pandemic’s unprecedented financial disruptions on the economic wellbeing of U.S. adults and their families.1 The April survey showed that a larger fraction of households
were facing financial hardship than in the fall of 2019, with concentrations of those who had lost a job
or had their hours cut reporting difficulty meeting financial obligations as a result of employment disruption.
Furthermore, Federal Reserve System Community Development Offices collaborated throughout 2020
to survey consumer groups, financial institutions, government agencies, and community organizations
to understand the effects of COVID-19 on low- to moderate-income communities and the entities
serving them. Analysis of four pulse surveys were published in a series of four reports entitled Perspectives from Main Street: The Impact of COVID-19 on Low- to Moderate-Income Communities and the Entities Serving Them.2 Additional information and data on the challenges stemming from the COVID-19
crisis, as well as other community development issues, were shared through various Connecting Communities webinars.3 And the Board’s November 2020 issue of Consumer and Community Context compiled additional research and analysis on the impact of COVID-19.4

Outreach and Stakeholder Engagement
Because actions to protect public health were sudden and varied across states and localities, on-theground information was essential to informing how the Board weighed challenges confronting the
economy, financial institutions, and consumers. To augment its community-level insights and feedback,
the Board convened its network of bankers, community organizations, consumer advocates, and
researchers so that they could share their perspectives with Board members and staff.
(continued on next page)
1
2
3
4

See https://www.federalreserve.gov/consumerscommunities/shed.htm.
See https://fedcommunities.org/data/main-street-covid19-survey-2020/.
See https://bsr.stlouisfed.org/connectingcommunities/.
See https://www.federalreserve.gov/publications/files/consumer-community-context-20201118.pdf.

102 107th Annual Report | 2020

Box 6.2. Meeting the Need for Real-Time Data and Insights on
Consumers’ Experiences—continued
In April, the Board convened a special meeting of the Community Advisory Council (CAC) to discuss the
public health and economic impacts of the pandemic, with members sharing their organizations’ experiences and observations. The regular May and October CAC provided additional opportunities for council
members to share insights on challenges facing their communities, including supporting small businesses and nonprofits, addressing housing instability and food security, and understanding the impacts
of these issues on economically vulnerable households.5
In addition, the Board also conducted outreach to a broad range of stakeholders, including financial
institutions, community organizations, consumer groups, small businesses and nonprofits, throughout
the year to gain their perspectives on trends and impacts they were seeing in their communities as
they worked to respond to the rapid pace of change. This included convening a group to advise and
encourage participation of community development financial institutions and minority depository institutions in the Paycheck Protection Program Lending Facility and Main Street Lending Program.6 In addition, the Board posted resources for consumers, communities, and small businesses on its COVID-19
webpage (https://www.federalreserve.gov/covid-19.htm) for those seeking assistance through various
programs.
5
6

Records of meetings with the CAC are available at https://www.federalreserve.gov/aboutthefed/cac.htm.
For access to webinars on these programs, see Ask the Fed at https://bsr.stlouisfed.org/askthefed/Home/AllCalls.

Community Development
The Federal Reserve System’s Community Development function promotes economic growth and
financial stability for underserved households and communities by informing research, policy, and
action. Community Development is a decentralized function within the Federal Reserve System,
and the Community Affairs Officers at each of the 12 Reserve Banks design strategies to respond
to the specific needs in their respective Districts. Board staff provide oversight for alignment with
Board objectives and coordination of System priorities.

Perspectives from Main Street
Through its work, the Community Development function also ensures the voices of consumers
and communities inform policy and research and solicits diverse views on issues affecting the
economy and financial markets. These perspectives help improve research, policies, and
transparency.
To that end, the Board partnered with Reserve Banks in 2020 to gain insight into the impact of
COVID-19 and how the many efforts to slow the spread of this disease affected communities
across the nation. In order to obtain information, the Federal Reserve conducted four surveys on
the effects of the coronavirus on communities and people in LMI households and the entities

Consumer and Community Affairs 103

serving them.39 Using a convenience sampling method that relied on contact databases, the
online survey sought input from representatives of nonprofit organizations, financial institutions,
government agencies, and other community organizations. Issued in April, June, August, and
October, these surveys provided an insightful and informative snapshot into how COVID-19 was
affecting LMI people and organizations that serve them on the dates the survey was administered.
In addition, the findings of the survey were discussed in webinar series that featured experts from
industry, government agencies, and community organizations. For more information on the results
of the survey and on webinar series, see box 6.2.
Similarly, the Federal Reserve supports access to credit and financial services for communities of
color by understanding and promoting the viability of minority depository institutions (MDIs). In
2020, in addition to releasing the Minority Depository Institutions (MDI) Annual Report to the Congress, the Board partnered with the Federal Reserve Bank of Kansas City on the development and
promotion of a virtual conference, “Banking and the Economy: A Forum for Minorities in
Banking.”40 This forum was designed to provide leaders of minority banks with industry, leadership, and professional development knowledge that will enhance their careers and networks, in fulfillment of the Federal Reserve’s commitment to supporting the success of MDIs as vital contributors to the diverse landscape of banks and providers of financial services through its Partnership
for Progress program.41

39
40

To access the surveys, see https://fedcommunities.org/data/main-street-covid19-survey-2020/.
For more information about the report to Congress and other activities relating to minority depository institutions, see
https://www.federalreserve.gov/supervisionreg/minority-depository-institutions.htm. For more information about the
forum, see https://www.stlouisfed.org/events/2019/09/cd-mbf0919.
For more information about the Federal Reserve System’s Partnership for Progress, see https://fedpartnership.gov/.

Appendixes

107

Federal Reserve System Organization

Congress designed the Federal Reserve System to give it a broad perspective on the economy and
on economic activity in all parts of the nation. As such, the System is composed of a central, governmental agency—the Board of Governors—in Washington, D.C., and 12 regional Federal Reserve
Banks. This section lists key officials across the System, including the Board of Governors, its officers, Federal Open Market Committee members, several System councils, and Federal Reserve
Bank and Branch directors and officers for 2020.

Board of Governors
Members
The Board of Governors of the Federal Reserve System is composed of seven members, who are
nominated by the President and confirmed by the Senate. The Chair and the Vice Chair of the
Board are also named by the President from among the members and are confirmed by the
Senate. This section lists Board members who served in 2020. For a full listing of Board members
from 1914 through the present, visit www.federalreserve.gov/aboutthefed/bios/board/
boardmembership.htm.
Jerome H. Powell

Randal K. Quarles

Chair

Vice Chair for Supervision

Richard H. Clarida

Michelle W. Bowman

Lael Brainard
Christopher J. Waller
(as of December 18, 2020)

Vice Chair

Divisions and Officers
Fifteen divisions support and carry out the mission of the Board of Governors, which is based in
Washington, D.C.

Office of Board Members
Michelle A. Smith

David W. Skidmore

Jon Faust

Assistant to the Board
and Director

Assistant to the Board
(through February 1, 2020)

Senior Special Adviser
to the Chair

Linda L. Robertson

Jennifer C. Gallagher

Joshua H. Gallin

Assistant to the Board

Special Assistant to the Board
for Congressional Liaison

Special Adviser to the Chair

Lucretia M. Boyer
Assistant to the Board

108 107th Annual Report | 2020

Legal Division
Mark E. Van Der Weide

Jean C. Anderson

Cary K. Williams

General Counsel

Associate General Counsel

Richard M. Ashton

Benjamin W. McDonough

Deputy Associate
General Counsel

Deputy General Counsel

Associate General Counsel

Patrick M. Bryan

Laurie S. Schaffer

Alvin Williams

Deputy General Counsel

Associate General Counsel
(as of August 31, 2020)

Assistant General Counsel
(through January 25, 2020)

Charles Gray
Senior Associate General Counsel
and Chief of Staff
(as of March 19, 2020)

Alicia S. Foster

Stephanie Martin

Alison M. Thro

Senior Associate
General Counsel

Deputy Associate
General Counsel

Jason A. Gonzalez
Assistant General Counsel
(as of August 16, 2020)

Deputy Associate
General Counsel

Office of the Secretary
Ann Misback

Michele T. Fennell

Yao-Chin Chao

Secretary of the Board

Deputy Associate Secretary

Assistant Secretary

Margaret M. Shanks
Deputy Secretary

Division of International Finance
Beth Anne Wilson

James A. Dahl

Daniel Beltran

Director
(as of June 1, 2020)

Associate Director

Assistant Director
(as of June 21, 2020)

Shaghil Ahmed

Associate Director

Viktors Stebunovs

Ricardo Correa

Assistant Director
(as of June 21, 2020)

Deputy Director

Sally M. Davies
Deputy Director

Brian M. Doyle1
Deputy Director

Paul Wood

Deputy Associate Director

Stephanie E. Curcuru
Matteo Iacoviello
Deputy Associate Director

Deputy Director
(through May 2, 2020)

Andrea Raffo
Deputy Associate Director

Senior Associate Director

Assistant Director

Deputy Associate Director

Joseph W. Gruber

Carol Bertaut

Robert Vigfusson
Brett Berger
Senior Adviser

Steven B. Kamin
Senior Adviser
(through June 1, 2020)

John H. Rogers
Senior Adviser

Brian M. Doyle served as an adviser to Vice Chair Clarida through April 2020 and was replaced by Chiara Scotti.

Federal Reserve System Organization 109

Division of Financial Stability
Andreas W. Lehnert

Luca Guerrieri

David Arseneau

Director

Deputy Associate Director

Michael T. Kiley

Kent C. Hiteshew

Assistant Director
(as of November 8, 2020)

Deputy Director

Deputy Associate Director
(as of March 25, 2020)

Andrew M. Cohen

Senior Associate Director

Namirembe Mukasa

Ceyhun Durdu

Elizabeth Klee

Deputy Associate and
Chief of Staff

Assistant Director
(as of November 8, 2020)

Chiara Scotti2

Uzma Wahhab

Deputy Associate Director

Special Adviser

William F. Bassett

Senior Associate Director

John W. Schindler

Assistant Director

Senior Associate Director

Skander J. Van den Heuvel
Deputy Associate Director

Division of Monetary Affairs
Thomas Laubach

Katherine Tom

Laura Lipscomb

Director
(through September 2, 2020)

Associate Director
(through October 11, 2020)

Assistant Director

Trevor A. Reeve

Min Wei

Director
(as of September 3, 2020)

Associate Director

Assistant Director
(as of March 29, 2020)

Eric C. Engstrom3

Zeynep Senyuz

James A. Clouse

Deputy Associate Director

Assistant Director

Christopher J. Gust

Rebecca Zarutskie

Deputy Associate Director

Assistant Director

Brian Bonis

Antulio Bomfim4

Assistant Director
(as of March 29, 2020)

Senior Adviser

Senior Associate Director

Gretchen C. Weinbach

Karen Brooks

Senior Adviser

Senior Associate Director

Assistant Director

Margaret G. DeBoer

Michiel De Pooter

Associate Director

Assistant Director

Mary T. Hoffman

Giovanni Favara

Associate Director

Assistant Director

J. David Lopez-Salido

Etienne Gagnon

Associate Director

Assistant Director

Matthew M. Luecke

Dan Li

Associate Director

Assistant Director

Deputy Director

Rochelle M. Edge
Deputy Director

David H. Bowman

Elizabeth Marx

Jane E. Ihrig
Don H. Kim
Senior Adviser

Ellen E. Meade
Senior Adviser

Edward M. Nelson
Senior Adviser

Robert J. Tetlow
Senior Adviser

Egon Zakrajsek
Senior Adviser

2
3
4

Chiara Scotti replaced Brian M. Doyle as an adviser to Vice Chair Clarida in April 2020.
Eric C. Engstrom served as a deputy associate director in Monetary Affairs and Research and Statistics.
Antulio Bonfim also served as an adviser to Governor Bowman in 2020.

110 107th Annual Report | 2020

Division of Research and Statistics
Stacey Tevlin

Timothy A. Mullen

Matthias Paustian

Director

Associate Director

Assistant Director and Chief

Jeffrey C. Campione

Burcu Duygan-Bump

Paul Lengermann

Deputy Director

Deputy Associate Director

Assistant Director

Daniel M. Covitz

Eric C. Engstrom5

Geng Li

Deputy Director

Deputy Associate Director

Assistant Director and Chief

William L. Wascher III

J. Andrew Figura

Byron Lutz

Deputy Director

Deputy Associate Director

Assistant Director

Nicole Bennett

Erik A. Heitfield

Raven Molloy

Senior Associate Director
(as of March 30, 2020)

Deputy Associate Director

Assistant Director

Patrick E. McCabe

Gustavo Suarez

Eric M. Engen

Deputy Associate Director

Assistant Director

Norman J. Morin

Clara Vega

Deputy Associate Director

Assistant Director

Karen M. Pence

S. Wayne Passmore

Deputy Associate Director

Senior Adviser

John M. Roberts

Robin A. Prager

Deputy Associate Director

Senior Adviser
(through April 1, 2020)

Senior Associate Director

Joshua H. Gallin
Senior Associate Director

Diana Hancock
Senior Associate Director

David E. Lebow
Senior Associate Director

Michael G. Palumbo
Senior Associate Director

John J. Stevens
Senior Associate Director

Glenn R. Follette
Associate Director

Elizabeth K. Kiser

Shane M. Sherlund
Deputy Associate Director

Lillian Shewmaker
Deputy Associate Director

Paul A. Smith
Deputy Associate Director

Gianni Amisano

Jeremy Rudd
Senior Adviser

Steven A. Sharpe
Senior Adviser

Charles Fleischman
Adviser

Assistant Director and Chief

Associate Director

Eric C. Engstrom served as a deputy associate director in Monetary Affairs and Research and Statistics.

Federal Reserve System Organization 111

Division of Supervision and Regulation
Michael S. Gibson

John Beebe

Dana Burnett

Director

Deputy Associate Director

Jennifer Burns

James Ray Diggs

Assistant Director
(as of October 25, 2020)

Deputy Director

Deputy Associate Director

Arthur W. Lindo

Mona Elliot

Deputy Director

Deputy Associate Director

Juan Climent

James Price

Constance Horsley

Assistant Director
(as of June 7, 2020)

Deputy Director

Deputy Associate Director

Mary L. Aiken

Kavita Jain

Senior Associate Director

Deputy Associate Director
(as of June 29, 2020)

Barbara J. Bouchard
Senior Adviser

Richard N. Ragan
Senior Associate Director

Lisa Ryu

Kathleen Johnson

Deputy Associate Director

David K. Lynch
Susan Motyka
Deputy Associate Director

T. Kirk Odegard
Deputy Associate Director

Associate Director

Jeffery Gunther

Catherine Piche

Associate Director

Deputy Associate Director
(through March 1, 2020)

Anna L. Hewko

Laurie Priest

Associate Director

Michael J. Hsu

Assistant Director

Keith A. Ligon
Assistant Director
(through June 1, 2020)

Ann McKeehan
Assistant Director

Deputy Associate Director

Associate Director

Christopher Finger

Christine Graham

Assistant Director
(as of April 26, 2020)

Todd Vermilyea

Nida Davis

Assistant Director

Ryan P. Lordos

Deputy Associate Director/
Chief Accountant

Associate Director

Keith Coughlin

Eric L. Kennedy

Lara Lylozian

Kevin M. Bertsch

Assistant Director

Deputy Associate Director

Senior Associate Director

Karen Caplan

Deputy Associate Director
(through July 1, 2020)

Brent Richards
Assistant Director

Vaishali Sack
Assistant Director

Emily Wells
Assistant Director
(as of November 8, 2020)

Robert Sarama
Assistant Director

Norah M. Barger
Senior Adviser

Associate Director

Steven Spurry

John Kolb

Deputy Associate Director

Robert T. Ashman

Associate Director
(through April 1, 2020)

Catherine A. Tilford

Adviser
(through October 1, 2020)

Molly Mahar

Joanne Wakim

Associate Director

Richard A. Naylor II

Deputy Associate Director

Deputy Associate Director
(through July 1, 2020)

Associate Director

Donna Webb

Thomas R. Sullivan

Deputy Associate Director

Associate Director

Suzanne L. Williams
Deputy Associate Director

Fang Du
Adviser

William F. Treacy
Adviser

112 107th Annual Report | 2020

Division of Consumer and Community Affairs
Eric S. Belsky

Joseph A. Firschein

Amy B. Henderson

Director

Associate Director

Assistant Director

V. Nicole Bynum

Phyllis L. Harwell

Minh-Duc T. Le

Deputy Director

Associate Director

Assistant Director

Anna Alvarez Boyd

Marisa A. Reid

Caterina Petrucco-Littleton

Senior Associate Director

Associate Director

Assistant Director

Suzanne G. Killian

David E. Buchholz

Allen Fishbein

Senior Associate Director
(through December 1, 2020)

Deputy Associate Director

Senior Adviser
(through June 1, 2020)

Carol A. Evans

Assistant Director

Angelyque Campbell

Associate Director

Division of Reserve Bank Operations and Payment Systems
Matthew J. Eichner

David C. Mills

Brian Lawler

Director

Associate Director

Assistant Director

Marta E. Chaffee

Timothy W. Maas

Mark Manuszak

Senior Associate Director

Deputy Associate Director

Assistant Director

Gregory L. Evans

Stuart E. Sperry

Travis D. Nesmith

Senior Associate Director

Deputy Associate Director

Assistant Director and Chief

Susan V. Foley

Jeffrey Walker

Mark J. Olechowski

Senior Associate Director

Deputy Associate Director

Assistant Director

Lawrence E. Mize

Casey Clark

Rebecca L. Royer

Senior Associate Director

Assistant Director

Michael J. Lambert

Sonja Danburg

Nick Trotta

Associate Director
(through November 1, 2020)

Assistant Director and Manager

Jennifer K. Liu
Associate Director

Assistant Director and Manager
(as of May 24, 2020)

Jennifer A. Lucier

Jason Hinkle

Associate Director

Assistant Director

Caio Peixoto

Federal Reserve System Organization 113

Office of the Chief Operating Officer
Patrick J. McClanahan

Sheila Clark

Jeffrey A. Monica

Chief Operating Officer

Diversity and Inclusion
Programs Director

Assistant Director
(through July 1, 2020)

Chief Data Officer
(through May 1, 2020)

Andrew Leonard

Steven Miranda

Associate Director

Adviser

Katherine Tom

Phillip C. Daher

Michell Clark

Chief Data Officer
(as of October 11, 2020)

Assistant Director

Senior Adviser
(through February 1, 2020)

Michael J. Kraemer

Division of Financial Management
Ricardo Aguilera

Monica Y. Manning

Jeffrey R. Peirce

Director and Chief
Financial Officer

Associate Director
(as of November 9, 2020)

Associate Director

Stephen J. Bernard

Thomas Murphy

Associate Director

Deputy Director

Deputy Associate Director
(as of March 2, 2020)

Kimberly Briggs

Winona Varnon

Donna J. Butler

Catherine Jack

Director

Deputy Associate Director and Chief
of Staff (as of January 21, 2020)

Assistant Director

Kendra Gastright

Assistant Director

Karen L. Vassallo

Assistant Director

Division of Management

Tara Tinsley-Pelitere
Senior Associate Director

Tameika L. Pope

Associate Director

Tim Ly
Jeffrey A. Martin

Senior Associate Director
and CTO

Timothy E. Markey
Deputy Associate Director

Assistant Director
(through April 22, 2020)

Curtis B. Eldridge

Reginald V. Roach

Stephen E. Pearson

Senior Associate Director
and Chief

Deputy Associate Director

Assistant Director

Katherine Perez-Grines

Jacqueline Raia

Ann Buckingham

Deputy Associate Director
and Assistant Chief

Assistant Director
(through August 29, 2020)

Associate Director

Keith F. Bates
Assistant Director

114 107th Annual Report | 2020

Division of Information Technology
Sharon L. Mowry

Charles B. Young

Scott Meyerle

Director

Associate Director

Assistant Director

Lisa M. Bell

William K. Dennison

Can Xuan Nguyen

Deputy Director

Deputy Associate Director

Assistant Director

Raymond Romero

Deborah Prespare

Langston Shaw

Deputy Director

Deputy Associate Director

Assistant Director

Kofi A. Sapong

Jonathan F. Shrier

Edgar Wang

Deputy Director

Deputy Associate Director

Assistant Director

Glenn S. Eskow

Eric C. Turner

Ivan K. Wun

Senior Associate Director

Deputy Associate Director

Assistant Director

Stephen Olden

Virginia M. Wall

Marietta Murphy

Senior Associate Director
(as of October 26, 2020)

Deputy Associate Director

Adviser
(through August 1, 2020)

Sheryl Lynn Warren

Assistant Director

Senior Associate Director

Rajasekhar R. Yelisetty
Senior Associate Director

Brian Lester
Amy Kelley

Theresa C. Palya
Adviser

Assistant Director
(as of August 16, 2020)

Office of Inspector General
Mark Bialek

Peter Sheridan

Cynthia Gray

Inspector General

Associate Inspector General

Fred Gibson

Michael VanHuysen

Assistant Inspector General
(as of August 30, 2020)

Deputy Inspector General

Associate Inspector General

Gerald Maye

Stephen Carroll

Associate Inspector General
(through May 1, 2020)

Deputy Associate
Inspector General

Jacqueline M. Becker
Senior Adviser

Federal Reserve System Organization 115

Federal Open Market Committee
The Federal Open Market Committee is made up of the seven members of the Board of Governors; the president of the Federal Reserve Bank of New York; and four of the remaining eleven
Federal Reserve Bank presidents, who serve one-year terms on a rotating basis. During 2020, the
Federal Open Market Committee held eight regularly scheduled and two unscheduled meetings
(see appendix B, “Minutes of Federal Open Market Committee Meetings”).

Members
Jerome H. Powell

Richard H. Clarida

Neel Kashkari

Chair, Board of Governors

Member, Board of Governors

John C. Williams

Patrick T. Harker

President, Federal Reserve
Bank of Minneapolis

Vice Chairman, President,
Federal Reserve Bank of New York

President, Federal Reserve
Bank of Philadelphia

Michelle W. Bowman

Robert S. Kaplan

Member, Board of Governors

President, Federal Reserve
Bank of Dallas

Randal K. Quarles

Thomas Barkin

Mary C. Daly

Helen E. Mucciolo

President, Federal Reserve
Bank of Richmond

President, Federal Reserve
Bank of San Francisco

Raphael W. Bostic

Charles L. Evans

First Vice President, Federal Reserve
Bank of New York
(as of November 11, 2020)

President, Federal Reserve
Bank of Atlanta

President, Federal Reserve
Bank of Chicago

Lael Brainard

Loretta J. Mester
President, Federal Reserve
Bank of Cleveland

Member, Board of Governors

Alternate Members

Michael Strine
First Vice President, Federal Reserve
Bank of New York
(through November 10, 2020)

116 107th Annual Report | 2020

Officers
James A. Clouse

Trevor A. Reeve

Joseph W. Gruber

Secretary

Economist
(as of October 1, 2020)

Associate Economist

Stacey Tevlin

Associate Economist

Matthew M. Luecke
Deputy Secretary

Michelle A. Smith
Assistant Secretary

Mark E. Van Der Weide
General Counsel

Michael A. Held
Deputy General Counsel

Richard M. Ashton

Economist

Beth Anne Wilson
Economist

Shaghil Ahmed
Associate Economist

Michael Dotsey
Associate Economist

Beverly Hirtle
David E. Lebow
Associate Economist

Ellis W. Tallman
Associate Economist

William L. Wascher
Associate Economist

Mark L.J. Wright

Assistant General Counsel

Rochelle M. Edge

Associate Economist

Thomas Laubach

Associate Economist
(as of October 1, 2020)

Lorie K. Logan

Economist
(through September 1, 2020)

Marc P. Giannoni
Associate Economist

Manager, System Open
Market Account

Federal Reserve System Organization 117

Board of Governors Advisory Councils
The Federal Reserve Board uses advisory committees in carrying out its varied responsibilities. To
learn more, visit https://www.federalreserve.gov/aboutthefed/advisorydefault.htm.

Federal Advisory Council
The Federal Advisory Council—a statutory body established under the Federal Reserve Act—
consults with and advises the Board of Governors on all matters within the Board’s jurisdiction. It
is composed of one representative from each Federal Reserve District, chosen by the Reserve
Bank in that District. The president and vice president of the council are selected from amongst
council members. The Federal Reserve Act requires the council to meet in Washington, D.C., at
least four times a year. In 2020, the council met on February 5–6, May 7–8, September 16–17,
and December 2–3. The council met with the Board on February 6, May 7, September 17, and
December 3, 2020.

Members
District 1

District 5

District 9

John R. Ciulla

Brian T. Moynihan

Kevin P. Riley

President and Chief Executive Officer,
Webster Financial Corporation and
Webster Bank, Waterbury, CT

Chairman and Chief Executive Officer,
Bank of America, Charlotte, NC

President and Chief Executive Officer,
First Interstate BancSystem, Inc.,
Billings, MT

District 6
District 2
Rene F. Jones

Rajinder P. Singh

Chairman and Chief Executive Officer,
M&T Bank Corporation, Buffalo, NY

Chairman, President and Chief
Executive Officer, BankUnited, Inc.,
Miami Lakes, FL

District 3

District 7

Jeffrey M. Schweitzer

Jeffrey J. Brown

Chief Executive Officer,
Univest Bank and Trust Co.,
Souderton, PA

Chief Executive Officer, Ally Financial
Inc., Detroit, MI

District 10
John B. Dicus
President and Chief Executive Officer,
Capitol Federal Financial, Inc.,
Topeka, KS

District 11
Phillip D. Green

District 8

Chairman and Chief Executive Officer,
Cullen/Frost Bankers Inc.,
San Antonio, TX

D. Bryan Jordan

District 12

Chairman, President and Chief
Executive Officer, First Horizon
National Corporation, Memphis, TN

James H. Herbert, II

Brian T. Moynihan

Jeffrey J. Brown

Herb Taylor

President

Vice President

Secretary

District 4
William S. Demchak
Chairman, President and Chief
Executive Officer, PNC Financial
Services Group, Pittsburgh, PA

Chairman and Chief Executive Officer,
First Republic Bank, San Francisco, CA

Officers

118 107th Annual Report | 2020

Community Depository Institutions Advisory Council
The Community Depository Institutions Advisory Council advises the Board of Governors on the
economy, lending conditions, and other issues of interest to community depository institutions.
Members are selected from among representatives of banks, thrift institutions, and credit unions
who are serving on local advisory councils at the 12 Federal Reserve Banks. One member of each
of the Reserve Bank councils serves on the Community Depository Institutions Advisory Council.
The president and vice president are selected from amongst council members. The council usually
meets with the Board twice a year in Washington, D.C. In 2020, the council met on April 1 and
November 19.

Members
District 1

District 5

District 8

Dorothy A. Savarese

Dabney T.P. Gilliam, Jr.

Marnie Older

Chairman, President and Chief
Executive Officer, Cape Cod 5,
Orleans, MA

President and Chief Executive Officer,
The Bank of Charlotte County,
Phenix, VA

Chief Executive Officer and Director,
Stone Bank, Little Rock, AR

District 2

District 6

Faheem A. Masood

David R. Melville III

President and Chief Executive Officer,
ESL Federal Credit Union,
Rochester, NY

President and Chief Executive Officer,
b1Bank, Baton Rouge, LA

District 9

Jeane M. Vidoni
President and Chief Executive Officer,
Penn Community Bank, Perkasie, PA

Chief Executive Officer, Viking Bank,
Alexandria, MN

District 10
District 7

District 3

Shari Laven

Douglas S. Gordon
President and Chief Executive Officer,
WaterStone Bank, SSB, Wauwatosa, WI

Brad Koehn
Regional President, Midwest Bank,
Lincoln, NE

District 11

District 4

Erik Beguin

T. Michael Price

Founder and Chief Executive Officer,
Austin Capital Bank, Austin, TX

President and Chief Executive Officer,
First Commonwealth Financial Corp.,
Indiana, PA

District 12
Andrew J. Ryback
President and Chief Executive Officer,
Plumas Bank, Quincy, CA

Officers
Dorothy A. Savarese

T. Michael Price

President

Vice President

Federal Reserve System Organization 119

Community Advisory Council
The Community Advisory Council was formed in 2015 to advise the Board of Governors on the economic circumstances and financial services needs of consumers and communities, with a particular focus on the concerns of low- and moderate-income populations. The council is composed
of a diverse group of experts and representatives of consumer and community development organizations and interests, including from such fields as affordable housing, community and economic
development, employment and labor, financial services and technology, small business, and asset
and wealth building. One member of the council serves as its chair. The council first met with the
Board in November 2015, and meets with the Board twice each year. In 2020, the council met
with the Board on for a special meeting on COVID-19 on April 13 and held their regular meetings
on May 14 and October 1.

Members
Juan Bonilla

Donald Hinkle-Brown

Jonny Price

Deputy Director, Lawrence Community
Works, Lawrence, MA

President and CEO, Reinvestment
Fund, Philadelphia, PA

Director of Business Development,
Wefunder, San Francisco, CA

Dr. Susan Bradbury

Barb Lau

Bethany Sanchez

Professor, Community and Regional
Planning, Iowa State University,
Ames, IA

Executive Director, Association of
Women Contractors, St. Paul, MN

Fair Lending Director, Metropolitan
Milwaukee Fair Housing Council,
Milwaukee, WI

Tawney Brunsch

Chief Innovation Officer,
Columbus Community Center,
Salt Lake City, UT

Bill Schlesinger

Executive Director, Lakota Funds,
Kyle, SD

Adrian M. Brooks

Andreanecia Morris

Lora Smith

CEO, Memorial Community Development Corporation, Evansville, IN

Executive Director, HousingNOLA,
New Orleans, LA

Executive Director, Appalachian Impact
Fund, Hazard, KY

Joshua Downey

Marc Norman

Jesse Van Tol

President, Denver Area Labor
Federation, AFL-CIO, Denver, CO

Associate Professor of Practice,
University of Michigan, Taubman
College of Architecture and Urban
Planning, Ann Arbor, MI

CEO, National Community Reinvestment Coalition, Washington, DC

Stephanie Mackay

Officers
Donald Hinkle-Brown

Marc Norman

Chair

Vice Chair

Co-Director, Project Vida,
El Paso, TX

120 107th Annual Report | 2020

Model Validation Council
The Model Validation Council was established in 2012 by the Board of Governors to provide expert
and independent advice on its process to rigorously assess the models used in stress tests of
banking institutions. The Dodd-Frank Wall Street Reform and Consumer Protection Act required the
Federal Reserve to conduct annual stress tests of large bank holding companies and systemically
important, nonbank financial institutions supervised by the Board. The Model Validation Council
provides input on the Board’s efforts to assess the effectiveness of the models used in the stress
tests. The council is intended to improve the quality of the Federal Reserve’s model assessment
program and to strengthen the confidence in the integrity and independence of the program.

Members
Andrew Atkeson

Victoria Ivashina

Andrew Patton

Professor, University of
California, Los Angeles

Professor, Harvard
Business School

Professor, Duke University

Paul Glasserman

Stijn Van Nieuwerburgh

Professor, Columbia University

Federal Reserve System Organization 121

Federal Reserve Banks and Branches
To carry out the day-to-day operations of the Federal Reserve System, the nation has been divided
into 12 Federal Reserve Districts, each with a Reserve Bank. The majority of Reserve Banks also
have at least one Branch.

Reserve Bank and Branch Directors
As required by the Federal Reserve Act, each Federal Reserve Bank is supervised by a ninemember board with three different classes of three directors each: Class A directors, who are
nominated and elected by the member banks in that District to represent the stockholding banks;
Class B directors, who are nominated and elected by the member banks to represent the public;
and Class C directors, who are appointed by the Board of Governors to represent the public. Class
B and Class C directors are selected with due, but not exclusive, consideration to the interests of
agriculture, commerce, industry, services, labor, and consumers. Each Federal Reserve Bank
Branch also has a board with either five or seven directors. A majority of the directors on each
Branch board are appointed by the Federal Reserve Bank, with the remaining directors appointed
by the Board of Governors.
For more information on Reserve Bank and Branch directors, see https://www.federalreserve.gov/
aboutthefed/directors/about.htm.
Reserve Bank and Branch directors are listed below. For each director, the class of directorship,
the director’s principal place of business, and the expiration date of the director’s current term are
shown. Also shown are maps that identify Federal Reserve Districts by their official number, city,
and letter designation. For more information on the Federal Reserve indicator letters, see
https://www.uscurrency.gov/denominations/bank-note-identifiers.

122 107th Annual Report | 2020

District 1–Boston
Covers the states of Maine, Massachusetts, New Hampshire, Rhode Island,

1—A

and Vermont; and all but Fairfield County in Connecticut.
VT

For more information on this District and to learn more about the Federal
MA

NH
RI

Boston

Reserve Bank of Boston’s operations, visit https://www.bostonfed.org/. Information on economic conditions for this District can be found in the Federal
Reserve System’s Beige Book at https://www.federalreserve.gov/monetary
policy/beigebook2020.htm. Also find the Reserve Bank’s financial statements
for 2020 at https://www.federalreserve.gov/aboutthefed/files/
bostonfinstmt2020.pdf.

Class A

Class B

Class C

Michael E. Tucker, 2020

Kimberly Sherman Stamler,

Kathleen E. Walsh, 2020

President and Chief Executive Officer,
Greenfield Cooperative Bank,
Greenfield, MA

2020, President, Related Beal,
Boston, MA

President and Chief Executive Officer,
Boston Medical Center, Boston, MA

Roger W. Crandall, 2021

Phillip L. Clay, 2021

Chandler Howard, 2021
Retired President and Chief Executive
Officer, Liberty Bank, Middletown, CT

Chairman, President, and Chief
Executive Officer, MassMutual
Financial Group, Springfield, MA

Professor Emeritus of City Planning,
Massachusetts Institute of
Technology, Cambridge, MA

Bruce Van Saun, 2022

Lizanne Kindler, 2022

Christina Hull Paxson, 2022

Chairman and Chief Executive Officer,
Citizens Financial Group,
Providence, RI

Chief Executive Officer, Talbots,
Hingham, MA

President, Brown University,
Providence, RI

Federal Reserve System Organization 123

District 2–New York
Covers the state of New York; Fairfield County in Connecticut; and 12 coun-

2—B

ties in northern New Jersey, and serves the Commonwealth of Puerto Rico

NY
CT

and the U.S. Virgin Islands.
Puerto Rico

For more information on this District and to learn more about the Federal
Reserve Bank of New York’s operations, visit https://www.newyorkfed.org/.
Information on economic conditions for this District can be found in the Fed-

Virgin Islands

New York

eral Reserve System’s Beige Book at https://www.federalreserve.gov/
monetarypolicy/beigebook2020.htm. Also find the Reserve Bank’s financial
statements for 2020 at https://www.federalreserve.gov/aboutthefed/files/
newyorkfinstmt2020.pdf.
Class A

Class B

Class C

Paul P. Mello, 2020

Vacancy, 2020

Rosa Gil, 2020

President and Chief Executive Officer,
Solvay Bank, Solvay, NY

Glenn H. Hutchins, 2021

Founder, President, and Chief
Executive Officer, Comunilife, Inc.,
New York, NY

James P. Gorman, 2021

Chairman, North Island, and
Co-Founder, Silver Lake, New York, NY

Chairman and Chief Executive Officer,
Morgan Stanley, New York, NY

Adena T. Friedman, 2022

Douglas L. Kennedy, 2022
President and Chief Executive Officer,
Peapack-Gladstone Bank,
Bedminster, NJ

President and Chief Executive Officer,
Nasdaq, New York, NY

Vincent Alvarez, 2021
President, New York City Central Labor
Council, AFL-CIO, New York, NY

Denise Scott, 2022
Executive Vice President, Local
Initiatives Support Corporation,
New York, NY

124 107th Annual Report | 2020

District 3–Philadelphia
Covers the state of Delaware; nine counties in southern New Jersey; and 48

3—C

counties in the eastern two-thirds of Pennsylvania.
PA

For more information on this District and to learn more about the Federal
DE

Reserve Bank of Philadelphia’s operations, visit https://www.philadelphia
fed.org/. Information on economic conditions for this District can be found

Philadelphia

in the Federal Reserve System’s Beige Book at https://www.federalreserve.
gov/monetarypolicy/beigebook2020.htm. Also find the Reserve Bank’s
financial statements for 2020 at https://www.federalreserve.gov/
aboutthefed/files/philadelphiafinstmt2020.pdf.

Class A

Class B

Class C

Jon S. Evans, 2020

Patricia Hasson, 2020

Madeline Bell, 2020

President and Chief Executive Officer,
Atlantic Community Bankers Bank,
Camp Hill, PA

Retired President and Executive
Director, Clarifi, Philadelphia, PA

President and Chief Executive Officer,
The Children’s Hospital of
Philadelphia–CHOP, Philadelphia, PA

Timothy Snyder, 2021
President and Chief Executive Officer,
Fleetwood Bank, Fleetwood, PA

Chairwoman and Chief Executive
Officer, C. H. Briggs Company,
Reading, PA

Christopher D. Maher, 2022

John Fry, 2022

Chairman and Chief Executive Officer,
OceansFirst Bank, N.A., Toms River, NJ

President, Drexel University,
Philadelphia, PA

Julia H. Klein, 2021

Vacancy, 2021
Anthony Ibarguen, 2022
Chief Executive Officer, Quench USA,
Inc., King of Prussia, PA

Federal Reserve System Organization 125

District 4–Cleveland
Covers the state of Ohio; 56 counties in eastern Kentucky; 19 counties in
western Pennsylvania; and 6 counties in northern West Virginia.

4—D Pittsburgh
PA
OH

For more information on this District and to learn more about the Federal
Reserve Bank of Cleveland’s operations, visit https://www.cleveland

WV
Cincinnati
KY

fed.org/. Information on economic conditions for this District can be found

Cleveland

in the Federal Reserve System’s Beige Book at https://www.federal
reserve.gov/monetarypolicy/beigebook2020.htm. Also find the Reserve
Bank’s financial statements for 2020 at https://www.federalreserve.gov/
aboutthefed/files/clevelandfinstmt2020.pdf.
Class A

Dawne S. Hickton, 2021

Holly B. Wiedemann, 2022

Dean J. Miller, 2020

Executive Vice President and Chief
Operating Officer, Critical Mission,
Jacobs, Pittsburgh, PA

Founder and President, AU Associates,
Inc., Lexington, KY

President and Chief Executive Officer,
First National Bank of Bellevue,
Bellevue, OH

Eddie L. Steiner, 2021
President and Chief Executive Officer,
CSB Bancorp, Inc., Millersburg, OH

Amy G. Brady, 2022
Chief Information Officer and Executive
Vice President, KeyBank,
Cleveland, OH

Dwight E. Smith, 2022
President and Chief Executive Officer,
Sophisticated Systems, Inc.,
Columbus, OH

Cincinnati Branch
Appointed by the Federal Reserve Bank

Alfonso Cornejo, 2020

Class B

President, Hispanic Chamber
Cincinnati USA, Cincinnati, OH

Charles H. Brown, 2020

David C. Evans, 2020

Pittsburgh Branch
Appointed by the Federal Reserve Bank

Audrey Dunning, 2020
President and Chief Executive Officer,
AMP Growth Advisors, LLC,
Cranberry Township, PA

Robert I. Glimcher, 2020
President, Glimcher Group Inc.,
Pittsburgh, PA

Vera Krekanova, 2021

Retired Executive Adviser, Toyota
Motor North America, Erlanger, KY

President and Chief Executive Officer,
TESSEC LLC, Dayton, OH

Chief Strategy and Research Officer,
Allegheny Conference on Community
Development, Pittsburgh, PA

Valarie L. Sheppard, 2021

Tucker Ballinger, 2021

Shelley L. Fant, 2022

President and Chief Executive Officer,
Forcht Bank, N.A., Lexington, KY

President and Chief Executive Officer,
FCG Solutions, Inc., Pittsburgh, PA

Darin C. Hall, 2022

Appointed by the Board of Governors

President and Chief Executive Officer,
Civitas Development Group,
Cincinnati, OH

Suzanne Mellon, 2020

Controller, Treasurer, and Executive
Vice President-Company Transition
Leader, The Procter & Gamble
Company, Cincinnati, OH

David Megenhardt, 2022
Executive Director, United Labor
Agency, Cleveland, OH

Class C
Doris Carson Williams, 2020
President and Chief Executive Officer,
African American Chamber of
Commerce of Western Pennsylvania,
Pittsburgh, PA

Appointed by the Board of Governors

Jenell R. Ross, 2020
President, Bob Ross Auto Group,
Centerville, OH

Rachid Abdallah, 2021
Chairman and Chief Executive Officer,
Jedson Engineering, Cincinnati, OH

President, Carlow University,
Pittsburgh, PA

Dmitri D. Shiry, 2021
Retired Partner Deloitte-Pittsburgh,
Deloitte LLP, Pittsburgh, PA

Kathryn Z. Klaber, 2022
Managing Partner, The Klaber Group,
Sewickley, PA

126 107th Annual Report | 2020

District 5–Richmond

5—E

Baltimore

Covers the states of Maryland, Virginia, North Carolina, and South CaroMD

VA
WV

NC
Charlotte
SC

Richmond

lina; 49 counties constituting most of West Virginia; and the District
of Columbia.
For more information on this District and to learn more about the Federal
Reserve Bank of Richmond’s operations, visit https://www.richmond
fed.org/. Information on economic conditions for this District can be
found in the Federal Reserve System’s Beige Book at https://
www.federalreserve.gov/monetarypolicy/beigebook2020.htm. Also find

the Reserve Bank’s financial statements for 2020 at https://www.federalreserve.gov/
aboutthefed/files/richmondfinstmt2020.pdf.
Class A

Eugene A. Woods, 2021

William J. McCarthy, 2022

Robert R. Hill, Jr., 2020

President and Chief Executive Officer,
Atrium Health, Charlotte, NC

Executive Director, Catholic Charities
of Baltimore, Baltimore, MD

Chief Executive Officer, South State
Corporation, Columbia, SC

Jodie McLean, 2022

James H. Sills, III, 2021

Chief Executive Officer, EDENS,
Washington, DC

President and Chief Executive Officer,
Mechanics and Farmers Bank,
Durham, NC

Baltimore Branch

Charlotte Branch
Appointed by the Federal Reserve Bank

Sepideh Saidi, 2020

Appointed by the Federal Reserve Bank

President and Chief Executive Officer,
SEPI Inc., Raleigh, NC

Richard Lloyd Willey, 2020

Michael D. Garcia, 2021

President, Perdue Agribusiness, LLC,
Salisbury, MD

President, Pulp and Paper Division,
Domtar Corp., Fort Mill, SC

Laura L. Gamble, 2021

Jerry L. Ocheltree, 2021

Regional President Greater Maryland,
PNC, Baltimore, MD

President and Chief Executive Officer,
United Bank, Lincolnton, NC

Chairman, President, and Chief
Executive Officer, National Gypsum
Company, Charlotte, NC

Tom Geddes, 2021

Michael C. Crapps, 2022

Partner and Portfolio Manager, Brown
Advisory, Baltimore, MD

President and Chief Executive Officer,
First Community Bank, Lexington, SC

Catherine A. Meloy, 2021

Cecilia A. Hodges, 2022

Appointed by the Board of Governors

Regional President Greater Washington and Virginia, M&T Bank,
Falls Church, VA

R. Glenn Sherrill, Jr., 2020

William A. Loving, Jr., 2022
President and Chief Executive Officer,
Pendleton Community Bank,
Franklin, WV

Class B
Thomas C. Nelson, 2020

President and Chief Executive Officer,
Goodwill of Greater Washington/
Goodwill Excel Center, Washington, DC

Wayne A. I. Frederick, MD,

Appointed by the Board of Governors

2022, President, Howard University,
Washington, DC

Susan J. Ganz, 2020

Class C

Chief Executive Officer, Lion Brothers
Company, Inc., Owings Mills, MD

Kathy J. Warden, 2020

Kenneth R. Banks, 2021

Chief Executive Officer and President,
Northrop Grumman Corporation,
Falls Church, VA

President and Chief Executive Officer,
Banks Contracting Company,
Greenbelt, MD

Chairman and Chief Executive Officer,
SteelFab Inc., Charlotte, NC

Bernette William Mazyck,
2021, President and Chief Executive
Officer, South Carolina Association for
Community Economic Development,
Charleston, SC

Vacancy, 2022

Federal Reserve System Organization 127

District 6–Atlanta
Covers the states of Alabama, Florida, and Georgia; 74
counties in the eastern two-thirds of Tennessee; 38 parishes of southern Louisiana; and 43 counties of southern

6—F
Nashville

TN
AL

Birmingham
MS

Mississippi.
For more information on this District and to learn more

LA
New Orleans

Jacksonville
FL

about the Federal Reserve Bank of Atlanta’s operations,
visit https://www.frbatlanta.org/. Information on economic

Miami

Atlanta

conditions for this District can be found in the Federal
Reserve System’s Beige Book at https://www.federal
reserve.gov/monetarypolicy/beigebook2020.htm. Also find the Reserve Bank’s financial statements for 2020 at https://www.federalreserve.gov/aboutthefed/files/atlantafinstmt2020.pdf.
Class A

Claire Lewis Arnold, 2021

Merrill H. Stewart, Jr., 2022

Kessel D. Stelling, Jr., 2020

Chief Executive Officer, Leapfrog
Services, Inc., Atlanta, GA

President, The Stewart/Perry
Company, Inc., Birmingham, AL

Chairman and Chief Executive Officer,
Synovus Financial Corporation,
Columbus, GA

Elizabeth A. Smith, 2022

Claire W. Tucker, 2021
Chief Executive Officer, CapStar
Financial Holdings, Inc., Nashville, TN

Robert W. Dumas, 2022
Chairman, President, and Chief
Executive Officer, AuburnBank,
Auburn, AL

Class B
Jonathan T.M. Reckford, 2020
Chief Executive Officer, Habitat for
Humanity International, Atlanta, GA

Michael Russell, 2021
Chief Executive Officer, H.J. Russell
and Company, Atlanta, GA

Mary A. Laschinger, 2022
Former Chairman and Chief Executive
Officer, Veritiv Corporation, Atlanta, GA

Class C
Myron A. Gray, 2020
Retired President, U.S. Operations,
United Parcel Service, Inc., Atlanta, GA

Former Executive Chair, Bloomin’
Brands, Inc., Tampa, FL

Birmingham Branch

Jacksonville Branch
Appointed by the Federal Reserve Bank

William O. West, 2020

Appointed by the Federal Reserve Bank

Chief Executive Officer, The Bank of
Tampa, Tampa, FL

Herschell L. Hamilton, 2020

John Hirabayashi, 2021

Chief Strategic Officer, BLOC Global
Group, Birmingham, AL

President and Chief Executive Officer,
Community First Credit Union of
Florida, Jacksonville, FL

David M. Benck, 2021
Vice President and General Counsel,
Hibbett Sports, Birmingham, AL

David L. Nast, 2021
President and Chief Executive Officer,
Progress Bank, Huntsville, AL

Brian C. Hamilton, 2022
President and Chief Executive Officer,
Trillion Communications Corp.,
Bessemer, AL

Dawn Lockhart, 2021
Director of Strategic Partnerships,
Office of the Mayor, City of
Jacksonville, Jacksonville, FL

Paul G. Boynton, 2022
President and Chief Executive Officer,
Rayonier Advanced Materials, Inc.,
Jacksonville, FL
Appointed by the Board of Governors

Appointed by the Board of Governors

Troy D. Taylor, 2020

Nancy C. Goedecke, 2020

Chairman and Chief Executive Officer,
Coca-Cola Beverages Florida, LLC,
Tampa, FL

Chairman and Chief Executive Officer,
Mayer Electric Supply Company, Inc.,
Birmingham, AL

Christy Thomas, 2021
Chief Financial Officer, Milo’s Tea
Company, Inc., Bessemer, AL

Timothy P. Cost, 2021
President, Jacksonville University,
Jacksonville, FL

128 107th Annual Report | 2020

Nicole B. Thomas, 2022

Nashville Branch

New Orleans Branch

Hospital President, Baptist Medical
Center South, Jacksonville, FL

Appointed by the Federal Reserve Bank

John W. Garratt, 2020

Lampkin Butts, 2020

Executive Vice President and Chief
Financial Officer, Dollar General,
Goodlettsville, TN

President and Chief Operating Officer,
Sanderson Farms, Inc., Laurel, MS

Beth R. Chase, 2021

Board Chair, Fidelity Bank,
New Orleans, LA

Miami Branch
Appointed by the Federal Reserve Bank

N. Maria Menendez, 2020
Chief Financial Officer, GL Homes of
Florida Holding, Sunrise, FL

Victoria E. Villalba, 2020
President and Chief Executive Officer,
Victoria & Associates Career Services,
Inc., Miami, FL

Abel L. Iglesias, 2021
President and Chief Operating Officer,
Professional Bank, Coral Gables, FL

Eduardo Arriola, 2022
Chairman and Chief Executive Officer,
Apollo Bank, Miami, FL

Former Senior Managing Director,
Ankura Consulting Group,
Nashville, TN

Katherine A. Crosby, 2021

David T. Darragh, 2021

Leif M. Murphy, 2021

Operating Partner, LongueVue Capital,
Metairie, LA

Chief Executive Officer, TeamHealth
Holdings, Inc., Knoxville, TN

Toni D. Cooley, 2022

Amber W. Krupacs, 2022

Chief Executive Officer, Systems
Companies, Jackson, MS

Chief Financial Officer and Executive
Vice President, Clayton Homes,
Maryville, TN

Appointed by the Board of Governors

Michael E. Hicks, Jr., 2020

Amanda Mathis, 2020

President and Chief Executive Officer,
Hixardt Technologies, Inc.,
Pensacola, FL

Keith T. Koenig, 2020

Chief Financial Officer, Bridgestone
Americas, Inc., Nashville, TN

Art E. Favre, 2021

President and Chief Executive Officer,
City Furniture, Tamarac, FL

Thomas Zacharia, 2021

Appointed by the Board of Governors

Michael A. Wynn, 2021
Board Chairman and President,
Sunshine Ace Hardware,
Bonita Springs, FL

Ana M. Menendez, 2022
Chief Financial Officer and Treasurer,
Watsco, Inc., Miami, FL

Appointed by the Board of Governors

Laboratory Director/ President and
Chief Executive Officer, Oak Ridge
National Laboratory/ UT-Battelle, LLC,
Oak Ridge, TN

Matthew S. Bourlakas, 2022
President and Chief Executive Officer,
Goodwill Industries of Middle
Tennessee, Inc., Nashville, TN

President and Chief Executive Officer,
Performance Contractors, Inc.,
Baton Rouge, LA

G. Janelle Frost, 2022
President and Chief Executive Officer,
AMERISAFE, Inc., DeRidder, LA

Federal Reserve System Organization 129

District 7–Chicago
Covers the state of Iowa; 68 counties of northern Indiana; 50

7—G

counties of northern Illinois; 68 counties of southern Michigan;

and 46 counties of southern Wisconsin.

Detroit

For more information on this District and to learn more about the

Federal Reserve Bank of Chicago’s operations, visit https://

www.chicagofed.org/. Information on economic conditions for

Chicago

this District can be found in the Federal Reserve System’s Beige
Book at https://www.federalreserve.gov/monetarypolicy/
beigebook2020.htm. Also find the Reserve Bank’s financial
statements for 2020 at https://www.federalreserve.gov/aboutthefed/files/
chicagofinstmt2020.pdf.
Class A

Class C

Rip Rapson, 2021

Michael O’Grady, 2020

E. Scott Santi, 2020

President and Chief Executive Officer,
The Kresge Foundation, Troy, MI

Chairman, President, and Chief
Executive Officer, Northern Trust,
Chicago, IL

Chairman and Chief Executive Officer,
Illinois Tool Works Inc., Glenview, IL

Ronald E. Hall, 2022

Wright L. Lassiter III, 2021

Christopher J. Murphy III, 2021

President and Chief Executive Officer,
Bridgewater Interiors, LLC, Detroit, MI

President and Chief Executive Officer,
Henry Ford Health System, Detroit, MI

Appointed by the Board of Governors

Chairman and Chief Executive Officer,
1st Source Bank, South Bend, IN

Susan Whitson, 2022
Chief Executive Officer, First National
Bank, and President, First of Waverly
Corporation, Waverly, IA

Class B
David Cyril Habiger, 2020
President and Chief Executive Officer,
J.D. Power, Troy, MI

Susan M. Collins, 2021
Interim Provost and Executive Vice
President for Academic Affairs,
University of Michigan, Ann Arbor, MI

Linda Jojo, 2022
Executive Vice President, Technology
and Chief Digital Officer, United
Airlines, Inc., Chicago, IL

Helene D. Gayle, 2022
President and Chief Executive Officer,
The Chicago Community Trust,
Chicago IL

Joseph B. Anderson, Jr., 2020
Chairman and Chief Executive Officer,
TAG Holdings, LLC, Wixom, MI

James M. Nicholson, 2021

Detroit Branch

Co-Chairman, PVS Chemicals, Inc.,
Detroit, MI

Appointed by the Federal Reserve Bank

Linda P. Hubbard, 2022

Sandy K. Baruah, 2020

President and Chief Operating Officer,
Carhartt, Inc., Dearborn, MI

President and Chief Executive Officer,
Detroit Regional Chamber, Detroit, MI

Sandra E. Pierce, 2020
Chairman & Senior Executive Vice
President, Private Client Group and
Regional Banking Director, Huntington
Michigan, Southfield, MI

130 107th Annual Report | 2020

District 8–St. Louis
Covers the state of Arkansas; 44 counties in southern Illinois; 24

8—H
IL
MO
AR
Little Rock

KY
IN

Louisville
TN
Memphis

counties in southern Indiana; 64 counties in western Kentucky; 39
counties in northern Mississippi; 71 counties in central and eastern
Missouri; the city of St. Louis; and 21 counties in western
Tennessee.

For more information on this District and to learn more about the

St. Louis

Federal Reserve Bank of St. Louis’s operations, visit https://
www.stlouisfed.org/. Information on economic conditions for this District can be found in the Federal Reserve System’s Beige Book at

https://www.federalreserve.gov/monetarypolicy/beigebook2020.htm. Also find the Reserve
Bank’s financial statements for 2020 at https://www.federalreserve.gov/aboutthefed/files/
stlouisfinstmt2020.pdf.
Class A

Suzanne Sitherwood, 2021

Jamie Henry, 2021

Elizabeth G. McCoy, 2020

President and Chief Executive Officer,
Spire Inc., St. Louis, MO

President and Chief Executive Officer,
Planters Bank, Hopkinsville, KY

Carolyn Chism Hardy, 2022

Vice President Finance, Emerging
Payments, Walmart Inc.,
Bentonville, AR

Patricia L. Clarke, 2021
President and Chief Executive Officer,
First National Bank of Raymond,
Raymond, IL

President and Chief Executive Officer,
Chism Hardy Investments, LLC,
Collierville, TN

Millie A. Ward, 2022
President, Stone Ward, Little Rock, AR

Louisville Branch
Little Rock Branch

Appointed by the Federal Reserve Bank

C. Mitchell Waycaster, 2022

Appointed by the Federal Reserve Bank

President and Chief Executive Officer,
Renassant Bank, Tupelo, MS

Keith Glover, 2020

Class B

President and Chief Executive Officer,
Producers Rice Mill, Inc., Stuttgart, AR

President and Chief Executive Officer,
Southwest Indiana Chamber of
Commerce, Evansville, IN

John N. Roberts III, 2020

Karama Neal, 2020

Blake B. Willoughby, 2020

President and Chief Executive Officer,
J.B. Hunt Transport Services, Inc.,
Lowell, AR

President, Southern Bancorp
Community Partners, Little Rock, AR

President, First Breckinridge
Bancshares, Inc., Irvington, KY

Jeff Lynch, 2021

Ben Reno-Weber, 2021

Alice K. Houston, 2021

President and Chief Executive Officer,
Eagle Bank and Trust, Little Rock, AR

Project Director, Greater Louisville
Project, Louisville, KY

R. Andrew Clyde, 2022

Patrick J. Glotzbach, 2022

President and Chief Executive Officer,
Murphy USA Inc., El Dorado, AR

Director, New Independent
Bancshares, Inc., Charlestown, IN

Appointed by the Board of Governors

Vickie D. Judy, 2020

Sadiqa N. Reynolds, 2020

Chief Financial Officer and Vice
President, America’s Car-Mart, Inc,
Bentonville, AR

President and Chief Executive Officer,
Louisville Urban League, Louisville, KY

Chief Executive Officer, HJI Supply
Chain Solutions, Louisville, KY

Penelope Pennington, 2022
Managing Partner, Edward Jones,
St. Louis, MO

Class C
James M. McKelvey, Jr., 2020
Chief Executive Officer, Invisibly, Inc.,
St. Louis, MO

Tara England Barney, 2020

Emerson M. Goodwin, 2021
Vice President of Operations, ARcare
d/b/a KentuckyCare, Paducah, KY

Federal Reserve System Organization 131

David Tatman, 2022

Michael Ugwueke, 2020

Appointed by the Board of Governors

Director of Engineering, Bendix Spicer
Foundation Brake, LLC,
Bowling Green, KY

President and Chief Executive Officer,
Methodist Le Bonheur Healthcare,
Memphis, TN

David T. Cochran, Jr., 2020

Memphis Branch
Appointed by the Federal Reserve Bank

Michael E. Cary, 2020
President and Chief Executive Officer,
Carroll Bank and Trust, Huntingdon, TN

Beverly Crossen, 2021
Owner, Farmhouse Tupelo, Tupelo, MS

R. Davy Carter, 2022
Regional President, Home
BancShares, Inc., Jonesboro, AR

Partner, CoCo Planting Co., Avon, MS

Eric D. Robertson, 2021
President, Community LIFT
Corporation, Memphis, TN

Katherine Buckman Gibson,
2022, Chief Executive Officer,
KBG Technologies, LLC,
Memphis, TN

132 107th Annual Report | 2020

District 9–Minneapolis
Covers the states of Minnesota, Montana,

9—I

North Dakota, and South Dakota; the Upper
MT
Helena

Peninsula of Michigan; and 26 counties in
MN

northern Wisconsin.

For more information on this District and to
learn more about the Federal Reserve Bank

Minneapolis

of Minneapolis’s operations, visit https://
www.minneapolisfed.org/. Information on
economic conditions for this District can be found in the Federal Reserve System’s Beige Book at
https://www.federalreserve.gov/monetarypolicy/beigebook2020.htm. Also find the Reserve
Bank’s financial statements for 2020 at https://www.federalreserve.gov/aboutthefed/files/
minneapolisfinstmt2020.pdf.
Class A

David R. Emery, 2022

Helena Branch

Thomas W. Armstrong, 2020

Executive Chairman, Retired, Black
Hills Corporation,
Rapid City, South Dakota

Appointed by the Federal Reserve Bank

Class C

Chief Executive Officer, Stockman
Financial Corporation, Billings, MT

Srilata Zaheer, 2020

Jason Adams, 2021

Dean, Carlson School of Management,
University of Minnesota,
Minneapolis, MN

Chief Financial Officer, Energy
Keepers, Inc., Polson, MT

Harry D. Melander, 2021

President and Chief Executive Officer,
Montana Community Foundation,
Helena, MT

Senior Vice President/Market
President, Forward Bank,
Park Falls, WI

Jeanne H. Crain, 2021
President and Chief Executive Officer,
Bremer Financial Corporation,
St. Paul, MN

Brenda K. Foster, 2022
Chairman, President, and Chief
Executive Officer, First Western Bank
and Trust, Minot, ND

President, Minnesota Building and
Construction Trades Council,
St. Paul, MN

Class B

Christopher M. Hilger, 2022

Kathleen Neset, 2020

Chairman, President, and Chief
Executive Officer, Securian Financial,
St. Paul, MN

President, Neset Consulting Service,
Tioga, ND

Sarah Walsh, 2021
Chief Operating Officer, PayneWest
Insurance, Helena, MT

William E. Coffee, 2020

Mary Rutherford, 2022

Appointed by the Board of Governors

Norma Nickerson, 2020
Director, Institute for Tourism &
Recreation Research, University of
Montana, Missoula, MT

Bobbi Wolstein, 2021
Chief Financial Officer, LHC, Inc.,
Kalispell, MT

Federal Reserve System Organization 133

District 10–Kansas City
Covers the states of Colorado, Kansas, Nebraska,

10—J

Oklahoma, and Wyoming; 43 counties in western

Missouri; and 14 counties in northern New Mexico.

NE
MO

For more information on this District and to learn

more about the Federal Reserve Bank of Kansas
City’s operations, visit https://www.kansas

Oklahoma City

cityfed.org/. Information on economic conditions for
this District can be found in the Federal Reserve

Kansas City

System’s Beige Book at https://www.federal
reserve.gov/monetarypolicy/beigebook2020.htm.
Also find the Reserve Bank’s financial statements for 2020 at https://www.federalreserve.gov/
aboutthefed/files/kansascityfinstmt2020.pdf.
Class A

Class C

Patricia J. Minard, 2020

James C. Farrell, 2020

Chairman, President, and Chief
Executive Officer, Southwest National
Bank, Wichita, KS

President, Farrell Growth Group LLC,
Omaha, NE

Kyle Heckman, 2021

President and Owner, Premier
Manufacturing, Inc., Frederick, CO

Chairman, President, and Chief
Executive Officer, Flatirons Bank,
Boulder, CO

Edmond Johnson, 2021

Patrick A. Dujakovich, 2022

Appointed by the Board of Governors

Navin Dimond, 2020
Chief Executive Officer, Stonebridge
Companies, Denver, CO

Jacqueline Baca, 2021
President, Bueno Foods,
Albuquerque, NM

Taryn Christison, 2022
Owner, Zimmerman Metals, Denver, CO

Gregory Hohl, 2022

President, Greater Kansas City
AFL-CIO, Kansas City, MO

Chairman and President, Wahoo State
Bank, Wahoo, NE

Denver Branch

Appointed by the Federal Reserve Bank

Brady Sidwell, 2020

Ashley J. Burt, 2020

Owner and Principal, Sidwell
Strategies, LLC, Enid, OK

Class B
Lilly Marks, 2020
Vice President for Health Affairs,
University of Colorado and Anschutz
Medical Campus, Aurora, CO

Brent A. Stewart, Sr., 2021
President and Chief Executive Officer,
United Way of Greater Kansas City,
Kansas City, MO

Douglas J. Stussi, 2022
Executive Vice President and
Managing Director, Love Family Office,
Oklahoma City, OK

President and Chief Executive Officer,
The Gunnison Bank and Trust
Company, Gunnison, CO

Nicole Glaros, 2021
Chief Investment Strategy Officer,
Techstars, Boulder, CO

Chris Wright, 2021
Chief Executive Officer, Liberty Oilfield
Services, Denver, CO

Jeffrey C. Wallace, 2022
Chief Executive Officer, Wyoming Bank
& Trust, Cheyenne, WY

Oklahoma City Branch

J. Walter Duncan IV, 2021
President, Duncan Oil Properties, Inc.,
Oklahoma City, OK

Susan Chapman Plumb, 2022
Board Chair and Chief Executive
Officer, Bank of Cherokee County,
Tahlequah, OK

Christopher C. Turner, 2022
President and Chief Financial Officer,
The First State Bank,
Oklahoma City, OK

134 107th Annual Report | 2020

Appointed by the Board of Governors

Omaha Branch

Appointed by the Board of Governors

Katrina Washington, 2020

Appointed by the Federal Reserve Bank

Eric L. Butler, 2020

Owner, Stratos Realty Group,
Oklahoma City, OK

Dwayne W. Sieck, 2020

Tina Patel, 2021

President, Middle Market Banking, CIT,
Omaha, NE

Retired Executive Vice President and
Chief Administrative Officer, Union
Pacific Railroad, Omaha, NE

Chief Financial Officer, Promise Hotels,
Inc., Tulsa, OK

Thomas J. Henning, 2021

Dana S. Weber, 2022

President and Chief Executive Officer,
Cash-Wa Distributing Co., Kearney, NE

Chief Executive Officer and Chairman
of the Board, Webco Industries, Inc.,
Sand Springs, OK

Zac Karpf, 2021
Chief Operating Officer, Platte Valley
Bank, Scottsbluff, NE

Annette Hamilton, 2022
Chief Operating Officer, Ho-Chunk, Inc.,
Winnebago, NE

Kimberly A. Russel, 2021
Chief Executive Officer, Russel
Advisors, Lincoln, NE

L. Javier Fernandez, 2022
Chief Financial Officer, Omaha Public
Power District, Omaha, NE

Federal Reserve System Organization 135

District 11–Dallas
Covers the state of Texas; 26 parishes in northern

11—K

Louisiana; and 18 counties in southern New Mexico.

NM
LA

For more information on this District and to learn

El Paso
Houston

more about the Federal Reserve Bank of Dallas’s
operations, visit https://www.dallasfed.org/. Infor-

San Antonio

mation on economic conditions for this District can
be found in the Federal Reserve System’s Beige

Dallas

Book at https://www.federalreserve.gov/
monetarypolicy/beigebook2020.htm. Also find the
Reserve Bank’s financial statements for 2020 at https://www.federalreserve.gov/aboutthefed/
files/dallasfinstmt2020.pdf.
Class A

Greg L. Armstrong, 2021

Christopher C. Doyle, 2020

Retired Chairman and Chief Executive
Officer, Plains All American Pipeline
L.P., Houston, TX

President and Chief Executive Officer,
Texas First Bank, Texas City, TX

Kelly A. Barclay, 2021
President and Chief Executive Officer,
Ozona National Bank, Wimberly, TX

Joe Quiroga, 2022
President, Texas National Bank,
Edinburg, TX

Class B
Gerald B. Smith, 2020
Chairman and Chief Executive Officer,
Smith, Graham & Company Investment
Advisors, L.P., Houston, TX

Renard U. Johnson, 2021

Thomas J. Falk, 2022
Retired Chairman and Chief Executive
Officer, Kimberly-Clark Corporation,
Dallas, TX

Community Foundation and Paso Del
Norte Health Foundation, El Paso, TX

Julio Chiu, 2022
Founder and Chief Executive Officer,
Seisa Group, El Paso, TX

Houston Branch
Appointed by the Federal Reserve Bank

El Paso Branch
Appointed by the Federal Reserve Bank

Sally A. Hurt-Deitch, 2020
Group CEO Mid-South, Memphis
Market CEO, and St. Francis Hospital
CEO, Tenet Healthcare, El Paso, TX

Albert Chao, 2020
President and Chief Executive Officer,
Westlake Chemical Corporation and
Westlake Chemical Partners GP LLC,
Houston, TX

Gina Luna, 2020

Teresa O. Molina, 2020

Chief Executive Officer, Luna
Strategies, LLC, Houston, TX

President, First New Mexico Bank,
Deming, NM

David Zalman, 2021

William Serrata, 2021

Chairman and Chief Executive Officer,
Prosperity Bancshares, Houston, TX

President, El Paso Community College,
El Paso, TX

Gary R. Petersen, 2022

Cynthia Taylor, 2022

Von C. Washington, Sr., 2022

Managing Partner and Founder, EnCap
Investments L.P., Houston, TX

President and Chief Executive Officer,
Oil States International Inc.,
Houston, TX

President, IDA Technology, El Paso, TX
Appointed by the Board of Governors

Class C

Managing General Partner, Colbridge
Partners Ltd., Midland, TX

President and Chief Executive Officer,
Management & Engineering
Technologies International, Inc.,
El Paso, TX

Claudia Aguirre, 2020
President and Chief Executive Officer,
BakerRipley, Houston, TX

Richard D. Folger, 2020

Tracy J. Yellen, 2021
Chief Executive Officer, Paso del Norte

Appointed by the Board of Governors

Ruth J. Simmons, 2020
President, Prairie View A&M University,
Prairie View, TX

Janiece Longoria, 2021
Vice Chairman, UT Board of Regents,
and Former Chairman, Port of Houston
Authority, Houston, TX

136 107th Annual Report | 2020

Darryl L. Wilson, 2022

Tyson Tuttle, 2020

Appointed by the Board of Governors

President and Founder, The Wilson
Collective, Houston, TX

President and Chief Executive Officer,
Silicon Labs, Austin, TX

Paula Gold-Williams, 2020

San Antonio Branch

Alfred B. Jones, 2021

Appointed by the Federal Reserve Bank

Director, American Bank Holding Corp.,
Corpus Christi, TX

Robert L. Lozano, 2020

Charles E. Amato, 2022

President, F&P Brands, Pharr, TX

Chairman and Co-Founder, Southwest
Business Corp., San Antonio, TX

President and Chief Executive Officer,
CPS Energy, San Antonio, TX

Jesús Garza, 2021
Retired President and Chief Executive
Officer, Seton Healthcare Family,
Austin, TX

Denise M. Trauth, 2022
President, Texas State University,
San Marcos, TX

Federal Reserve System Organization 137

District 12–San Francisco
Covers the states of Alaska, Arizona, California, Hawaii,

12—L

Idaho, Nevada, Oregon, Utah, and Washington, and serves
American Samoa, Guam, and the Commonwealth of the
Northern Mariana Islands.

Alaska

Seattle
Portland

For more information on this District and to learn more

about the Federal Reserve Bank of San Francisco’s operations, visit http://www.frbsf.org/. Information on economic
conditions for this District can be found in the Federal

Salt Lake
City
UT

Reserve System’s Beige Book at https://www.federal

Los Angeles

reserve.gov/monetarypolicy/beigebook2020.htm. Also find
the Reserve Bank’s financial statements for 2020 at
https://www.federalreserve.gov/aboutthefed/files/

Guam

Hawaii

San Francisco

sanfranciscofinstmt2020.pdf.
Class A

Class C

Steven W. Streit, 2022

S. Randolph Compton, 2020

Rosemary Turner, 2020

Chief Executive Officer and Co-Chair of
the Board, Pioneer Trust Bank, N.A.,
Salem, OR

Retired President, North California
District, United Parcel Service, Inc.,
Oakland, CA

Chief Innovation Officer, Green Dot
Bank and Green Dot Corporation,
Pasadena, CA

Greg Becker, 2021

David P. White, 2021

President and Chief Executive Officer,
SVB Financial Group, Chief Executive
Officer, Silicon Valley Bank,
Santa Clara, CA

National Executive Director, SAGAFTRA, Los Angeles, CA

President and Chief Executive Officer,
Evans Hotels, San Diego, CA

Barry M. Meyer, 2022

Anita V. Pramoda, 2021

Richard M. Sanborn, 2022
Retired President and Chief Executive
Officer, Seacoast Commerce Bank,
San Diego, CA

Retired Chairman and Chief Executive
Officer, Warner Bros., Founder and
Chairman, North Ten Mile Associates,
Los Angeles, CA

Los Angeles Branch
Class B
Tamara L. Lundgren, 2020
Chairman, President, and Chief
Executive Officer, Schnitzer Steel
Industries, Inc., Portland, OR

Arthur F. Oppenheimer, 2021
Chairman and Chief Executive Officer,
Oppenheimer Companies, Inc.,
President, Oppenheimer Development
Corporation, Boise, ID

Sanford L. Michelman, 2022
Chairman, Michelman & Robinson, LLP,
Los Angeles, CA

Appointed by the Federal Reserve Bank

Carl J.P. Chang, 2020
Chief Executive Officer, RedwoodKairos Real Estate Partners and
Pieology Pizzeria,
Rancho Santa Margarita, CA

Maritza Diaz, 2021
Chief Executive Officer, iTjuana,
San Marcos, CA

Luis Faura, 2021
President and Chief Executive Officer,
C&F Foods, Inc., City of Industry, CA

Appointed by the Board of Governors

Robert H. Gleason, 2020

Chief Executive Officer, Owned
Outcomes, Las Vegas, NV

Vacancy, 2022
Portland Branch
Appointed by the Federal Reserve Bank

Hilary K. Krane, 2020
Executive Vice President, Chief
Administrative Officer, and General
Counsel, Nike, Inc., Beaverton, OR

Cheryl R. Nester Wolfe, 2020
President and Chief Executive Officer,
Salem Health Hospital and Clinics,
Salem, OR

Stacey M.L. Dodson, 2021
Market President, Portland and
Southwest Washington, U.S. Bank,
Portland, OR

138 107th Annual Report | 2020

Maria Pope, 2022

O. Randall Woodbury, 2021

Laura Lee Stewart, 2020

President and Chief Executive Officer,
Portland General Electric Company,
Portland, OR

President and Chief Executive Officer,
Woodbury Corporation,
Salt Lake City, UT

President and Chief Executive Officer,
Sound Community Bank and Sound
Financial Bancorporation, Seattle, WA

Appointed by the Board of Governors

Deneece Huftalin, 2022

Cheryl B. Fambles, 2021

Charles A. Wilhoite, 2020

President, Salt Lake Community
College, Tayorsville, UT

Chief Executive Officer, Pacific
Mountain Workforce Development
Council, Tumwater, WA

Managing Director, Willamette
Management Associates,
Portland, OR

Gale Castillo, 2021
President, Cascade Centers, Inc.,
Portland, OR

Anne C. Kubisch, 2022
President and Chief Executive Officer,
The Ford Family Foundation,
Roseburg, OR

Salt Lake City Branch

Appointed by the Board of Governors

Patricia R. Richards, 2020
Retired President and Chief Executive
Officer, SelectHealth, Inc., Murray, UT

Robert C. Donegan, 2022
President, Ivar’s Inc., Seattle, WA
Appointed by the Board of Governors

Thomas K. Corrick, 2021

Elaine S. Couture, 2020

Chief Executive Officer, Boise Cascade
Company, Boise, ID

Executive Vice President and Chief
Executive Officer, Washington and
Montana Region, Providence St.
Joseph Health, Spokane, WA

Russell A. Childs, 2022
Chief Executive Officer and President,
SkyWest, Inc., St. George, UT

West Mathison, 2021

Appointed by the Federal Reserve Bank

Seattle Branch

President, Stemilt Growers, LLC,
Wenatchee, WA

Jas Krdzalic, 2020

Appointed by the Federal Reserve Bank

Craig Dawson, 2022

President and Chief Executive Officer,
Bodybuilding.com, Boise, ID

Carol Gore, 2020

Park Price, 2020

President and Chief Executive Officer,
Cook Inlet Housing Authority,
Anchorage, AK

President and Chief Executive Officer,
Retail Lockbox, Inc., Seattle, WA

Chief Executive Officer Emeritus and
Chairman, Bank of Idaho,
Idaho Falls, ID

Federal Reserve System Organization 139

Reserve Bank and Branch Leadership
Each year, the Board of Governors designates one Class C director to serve as chair, and one
Class C director to serve as deputy chair, of each Reserve Bank board. Reserve Banks also have a
president and first vice president who are appointed by the Bank’s Class C, and certain Class B,
directors, subject to approval by the Board of Governors. Each Reserve Bank selects a chair for
every Branch in its District from among the directors on the Branch board who were appointed by
the Board of Governors. For each Branch, an officer from its Reserve Bank is also charged with the
oversight of Branch operations.

Boston
Phillip L. Clay, Chair

Eric S. Rosengren,

Kenneth C. Montgomery,

Christina Hull Paxson,

President and Chief
Executive Officer

First Vice President and
Chief Operating Officer

John C. Williams, President and

Helen Mucciolo, Acting First

Chief Executive Officer

Vice President

Deputy Chair

New York
Denise Scott, Chair
Rosa Gil, Deputy Chair

Additional office at East Rutherford, NJ

Philadelphia
Madeline Bell, Chair

Patrick T. Harker, President and

James D. Narron, First Vice

Chief Executive Officer

President and Chief Operating Officer

Dawne S. Hickton, Chair

Cincinnati

Pittsburgh

Dwight E. Smith, Deputy Chair

Jenell R. Ross, Chair

Dmitri D. Shiry, Chair

Loretta J. Mester, President and

Rick Kaglic, Vice President and

Mekael Teshome, Vice President

Chief Executive Officer

Senior Regional Officer

and Senior Regional Officer

Anthony Ibarguen, Deputy Chair

Cleveland

Gregory L. Stefani, First Vice
President and Chief Operating Officer

140 107th Annual Report | 2020

Richmond
Kathy J. Warden, Chair

Baltimore

Charlotte

Eugene A. Woods, Deputy Chair

Susan J. Ganz, Chair

R. Glenn Sherrill, Jr, Chair

Thomas I. Barkin, President and

Andy Bauer, Vice President and

Matthew A. Martin, Senior Vice

Chief Executive Officer

Baltimore Regional Executive

President and Charlotte
Regional Executive

Myron A. Gray, Chair

Jacksonville

Nashville

Elizabeth A. Smith, Deputy Chair

Troy D. Taylor, Chair

Thomas Zacharia, Chair

Raphael W. Bostic, President

Christopher L. Oakley, Vice

Laurel Graefe, Vice President

and Chief Executive Officer

President and Regional Executive

and Regional Executive

Miami

New Orleans

Keith T. Koenig, Chair

Michael E. Hicks, Jr., Chair

Karen Gilmore, Vice President

Adrienne C. Slack, Vice President

and Regional Executive

Charles L. Evans, President and

Detroit

Becky Bareford, First Vice
President and Chief Operating Officer

Atlanta

André Anderson, First Vice
President and Chief Operating Officer

Birmingham
Merrill H. Stewart, Jr., Chair
Anoop Mishra, Vice President
and Regional Executive

Chicago
E. Scott Santi, Chair
Wright L. Lassiter, III,
Deputy Chair

Chief Executive Officer

Ellen Bromagen, First Vice
President and Chief Operating Officer

Joseph B. Anderson, Jr, Chair
Rick Mattoon, Vice President
and Regional Executive

Additional office at Des Moines, IA

St. Louis
Suzanne Sitherwood, Chair

Little Rock

James M. McKelvey, Jr.,

Vickie D. Judy, Chair

Deputy Chair

James B. Bullard, President and

Robert Hopkins, Senior Vice

President and Chief Operating Officer

President and Regional Executive

Memphis

President and Regional Executive

David T. Cochran, Jr., Chair

Louisville

Douglas G. Scarboro, Senior

Chief Executive Officer

Kathy O. Paese, First Vice

Nikki R. Lanier, Senior Vice

Emerson M. Goodwin, Chair

Vice President and Regional Executive

Federal Reserve System Organization 141

Minneapolis
Srilata Zaheer, Chair
Harry D. Melander, Deputy Chair

Neel Kashkari, President and
Chief Executive Officer

Ron Feldman, First Vice President

Helena
Norma Nickerson, Chair

Kansas City
James C. Farrell, Chair

Denver

Edmond Johnson, Deputy Chair

Taryn Christison, Chair

Esther L. George, President and

Nicholas Sly, Assistant Vice

Chief Executive Officer

President and Branch Executive

Kimberly A. Russel, Chair

Oklahoma City

Nathan Kauffman, Assistant Vice

Kelly J. Dubbert, First Vice
President and Chief Operating Officer

Tina Patel, Chair

Chad R. Wilkerson, Vice
President and Branch Executive

Omaha

President and Branch Executive

Dallas
Greg L. Armstrong, Chair

El Paso

Thomas J. Falk, Deputy Chair

Richard D. Folger, Chair

Robert S. Kaplan, President and

Roberto A. Coronado, Senior

Chief Executive Officer

Vice President in Charge

Jesús Garza, Chair

Houston

Blake Hastings, Senior Vice

Meredith N. Black, First Vice
President and Chief Operating Officer

Darryl L. Wilson, Chair

Daron D. Peschel, Senior Vice
President in Charge

San Antonio

President in Charge

San Francisco
Barry M. Meyer, Chair
Rosemary Turner, Deputy Chair
Mary C. Daly, President and Chief
Executive Officer

Mark A. Gould, First Vice
President and Chief Operating Officer

Roger W. Replogle, Executive

Becky Potts, Vice President

Vice President and Regional Executive

and Regional Executive

Portland

Seattle

Charles A. Wilhoite, Chair

Craig Dawson, Chair

Lynn Jorgensen, Vice President

Darlene Wilczynski, Vice

and Regional Executive

President and Regional Executive

Additional office at Phoenix, AZ

Salt Lake City
Los Angeles
Anita V. Pramoda, Chair

Russell A. Childs, Chair

142 107th Annual Report | 2020

Leadership Conferences
Conference of Chairs
The chairs of the Federal Reserve Banks are organized into the Conference of Chairs, which meets
to consider matters of common interest and to consult with and advise the Board of Governors.
Such meetings, also attended by the deputy chairs, were held in Washington, D.C., on May 6,
2020, October 6 and 9, 2020, and November 10, 2020. The conference’s executive committee
members for 2020 are listed below.6
Conference of Chairs Executive Committee—2020
Dawne S. Hickton, Chair,

Phillip L. Clay, Vice Chair,

Greg L. Armstrong, Member,

Federal Reserve Bank of Cleveland

Federal Reserve Bank of Boston

Federal Reserve Bank of Dallas

Conference of Presidents
The presidents of the Federal Reserve Banks are organized into the Conference of Presidents,
which meets periodically to identify, define, and deliberate issues of strategic significance to the
Federal Reserve System; to consider matters of common interest; and to consult with and advise
the Board of Governors. The chief executive officer of each Reserve Bank was originally labeled
governor and did not receive the title of president until the passage of the Banking Act of 1935.
Consequently, when the Conference was first established in 1914 it was known as the Conference
of Governors. Conference officers for 2020 are listed below.
Conference of Presidents—2020
Charles L. Evans, Chair,

Keri Trolson, Secretary,

Douglas Scarboro, Assistant

Federal Reserve Bank of Chicago

Secretary, Federal Reserve Bank of
St. Louis

James B. Bullard, Vice Chair,
Federal Reserve Bank of St. Louis

On November 10, 2020, the Conference of Chairs elected Greg L. Armstrong, chair of the Federal Reserve Bank of
Dallas, as chair of the conference’s executive committee for 2021. The conference also elected Elizabeth Smith, deputy
chair of the Federal Reserve Bank of Atlanta, as vice chair, and Eugene A. Woods, deputy chair of the Federal Reserve
Bank of Richmond, as the executive committee’s third member.

Federal Reserve System Organization 143

Conference of First Vice Presidents
The Conference of First Vice Presidents of the Federal Reserve Banks was organized in 1969 to
meet periodically for the consideration of operations and other matters. Conference officers for
2020 are listed below.7
Conference of First Vice Presidents—2020
Kelly J. Dubbert, Chair,

Laura Forman, Secretary,

Joshua Silverstein, Assistant

Federal Reserve Bank of Kansas City

Federal Reserve Bank of New York

Secretary, Federal Reserve Bank of
Philadelphia

Michael Strine, Vice Chair,
Federal Reserve Bank of New York

On December 8, 2020, the conference elected James Narron, Federal Reserve Bank of Philadelphia, as chair for 2021
and Ron Feldman, Federal Reserve Bank of Minneapolis, as vice chair. The conference also elected Josh Silverstein, Federal Reserve Bank of Philadelphia, as secretary and Jamica Quilin, Federal Reserve Bank of Minneapolis, as assistant
secretary.

145

Minutes of Federal Open Market
Committee Meetings

The policy actions of the Federal Open Market Committee, recorded in the minutes of its meetings, are available in the Annual Report of the Board of Governors pursuant to the requirements of
section 10 of the Federal Reserve Act. That section provides that the Board shall keep a complete
record of the actions taken by the Board and by the Federal Open Market Committee on all questions of policy relating to open market operations, that it shall record therein the votes taken in
connection with the determination of open market policies and the reasons underlying each policy
action, and that it shall include in its annual report to Congress a full account of such actions.
Links to the minutes for each of the eight regularly scheduled meetings held in 2020 are in the
list below.

Meeting Minutes
• Meeting held on January 28–29, 2020
https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20200129.pdf
• Meeting held on March 15, 2020
https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20200315.pdf
• Meeting held on April 28–29, 2020
https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20200429.pdf
• Meeting held on June 9–10, 2020
https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20200610.pdf
• Meeting held on July 28–29, 2020
https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20200729.pdf
• Meeting held on September 15–16, 2020
https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20200916.pdf
• Meeting held on November 4–5, 2020
https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20201105.pdf
• Meeting held on December 15–16, 2020
https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20201216.pdf
The minutes of the meetings contain the votes on the policy decisions made at those meetings,
as well as a summary of the information and discussions that led to the decisions. In addition, a
Summary of Economic Projections (SEP) was published as an addendum to the minutes of the

146 107th Annual Report | 2020

June and September 2020 meetings.1 The descriptions of economic and financial conditions in
the minutes and the SEP are based solely on the information that was available to the Committee
at the time of the meetings.
Members of the Committee voting for a particular action may differ among themselves as to the
reasons for their votes; in such cases, the range of their views is noted in the minutes. When
members dissent from a decision, they are identified in the minutes and a summary of the reasons for their dissent is provided.
Policy directives of the Federal Open Market Committee are issued to the Federal Reserve Bank of
New York as the Bank selected by the Committee to execute transactions for the System Open
Market Account. In the area of domestic open market operations, the Federal Reserve Bank of
New York operates under instructions from the Federal Open Market Committee that take the form
of an Authorization for Domestic Open Market Operations and a Domestic Policy Directive. (A new
Domestic Policy Directive is adopted at each regularly scheduled meeting.) In the foreign currency
area, the Federal Reserve Bank of New York operates under an Authorization for Foreign Currency
Operations and a Foreign Currency Directive. Changes in the instruments during the year are
reported in the minutes for the individual meetings.2
For more information about the Federal Open Market Committee’s meetings, statements, and minutes, visit the Board’s website at https://www.federalreserve.gov/monetarypolicy/
fomccalendars.htm.

No projections were submitted in conjunction with the March 2020 meeting. The December 2020 meeting was the first
meeting for which all the SEP exhibits were published at 2 p.m. on the second day of the meeting, instead of being
included as part of an addendum to the minutes. The written portion of the SEP that described the exhibits, which had
also previously been part of the addendum to the meeting minutes, was discontinued.
As of January 1, 2020, the Federal Reserve Bank of New York was operating under the Domestic Policy Directive
approved at the December 10–11, 2019, Committee meeting. The other policy instruments (the Authorization for
Domestic Open Market Operations, the Authorization for Foreign Currency Operations, and the Foreign Currency Directive)
in effect as of January 1, 2020, were approved at the January 29–30, 2019, meeting.

147

Federal Reserve System Audits

The Board of Governors, the Federal Reserve Banks, and the Federal Reserve System as a whole
are all subject to several levels of audit and review.
The Board’s financial statements and internal controls over financial reporting are audited annually
by an independent outside auditor retained by the Board’s Office of Inspector General (OIG). The
outside auditor also tests the Board’s compliance with certain provisions of laws, regulations, and
contracts affecting those statements.
The Reserve Banks’ financial statements are audited annually by an independent outside auditor
retained by the Board of Governors. In addition, the Reserve Banks are subject to annual examination by the Board. As discussed in section 5, “Payment System and Reserve Bank Oversight,” the
Board’s examination includes a wide range of ongoing oversight activities conducted on site and
off site by staff of the Board’s Division of Reserve Bank Operations and Payment Systems.
The audited annual financial statements of the Board of Governors, the Reserve Banks, and the
Federal Reserve System as a whole are available on the Board’s website at https://
www.federalreserve.gov/aboutthefed/audited-annual-financial-statements.htm.
In addition, the OIG conducts audits, evaluations, investigations, and other reviews relating to the
Board’s programs and operations as well as to Board functions delegated to the Reserve Banks.
Certain aspects of Federal Reserve operations are also subject to review by the Government
Accountability Office.

Office of Inspector General Activities
The OIG for the Federal Reserve Board, which is also the OIG for the Consumer Financial Protection Bureau (CFPB), operates in accordance with the Inspector General Act of 1978, as amended.
The OIG plans and conducts audits, inspections, evaluations, investigations, and other reviews
relating to Board and CFPB programs and operations, including functions that the Board has delegated to the Federal Reserve Banks. It also retains an independent public accounting firm to
annually audit the Board’s and the Federal Financial Institutions Examination Council’s financial
statements. These activities promote economy and efficiency; enhance policies and procedures;
and prevent and detect waste, fraud, and abuse. In addition, the OIG keeps the Congress, the
Board of Governors, and the CFPB director fully informed about serious abuses and deficiencies.

148 107th Annual Report | 2020

Most recently, the OIG has focused significant resources on oversight of the Board’s pandemic
response efforts. Specifically, the OIG has identified a new management challenge that has arisen
due to the creation of the Board’s new emergency lending programs and facilities and updated
three previously identified challenges to account for new aspects presented by the pandemic. The
OIG also initiated an audit and a monitoring effort, with other audits planned, in key risk areas and
opened investigations of alleged fraud related to these programs.
During 2020, the OIG issued 14 reports (table C.1). In addition, the OIG issued to the Board and
to the CFPB 18 memorandums on information technology and management and operations
issues. Because of the sensitive nature of some of the material, 14 of these memorandums are
nonpublic. The OIG also conducted follow-up reviews to evaluate actions taken on recommendations for corrective action. Regarding the OIG’s investigative work related to the Board and the
CFPB, 70 investigations were opened and 14 investigations were closed during the year. OIG investigative work resulted in 21 arrests, 12 criminal complaints, 15 criminal informations, 15 indictments, 13 convictions, and 4 prohibitions from the banking industry, as well as $7,767,550 in
criminal fines and restitution and $3,011,250,000 in civil judgments. The OIG also issued a
review on the CFPB’s budget and funding processes and two semiannual reports to Congress. The

Table C.1. OIG reports issued in 2020
Report title

Month issued

Federal Financial Institutions Examination Council Financial Statements as of and for the Years Ended
December 31, 2019 and 2018, and Independent Auditors’ Reports

February

The Bureau’s Office of Enforcement Has Centralized and Improved Its Final Order Follow-Up Activities, but
Additional Resources and Guidance Are Needed

March

The Board Should Finalize Guidance to Clearly Define Those Considered Senior Examiners and Subject to
the Associated Postemployment Restriction

March

Board of Governors of the Federal Reserve System Financial Statements as of and for the Years Ended
December 31, 2019 and 2018, and Independent Auditors’ Reports

March

The Board’s Oversight of Its Designated Financial Market Utility Supervision Program Is Generally Effective,
but Certain Program Aspects Can Be Improved

March

The Board Can Enhance Certain Aspects of Its Enforcement Action Monitoring Practices

March

The Board Can Strengthen Its Oversight of the Protective Services Unit and Improve Controls for Certain
Protective Services Unit Processes

March

The Board Can Further Enhance the Design and Implementation of Its Operating Budget Process

March

The Board Can Improve Its Contract Administration Processes

March

Independent Accountants’ Report on the Bureau Civil Penalty Fund’s 2019 Compliance With the Improper
Payments Information Act of 2002, as Amended

April

The Bureau Can Improve Its Periodic Monitoring Program to Better Target Risk and Enhance Training for
Examiners

June

The Board’s Approach to the Cybersecurity Supervision of LISCC Firms Continues to Evolve and Can
Be Enhanced

September

2020 Audit of the Board’s Information Security Program

November

2020 Audit of the Bureau’s Information Security Program

November

Federal Reserve System Audits 149

OIG performed approximately 37 reviews of legislation and regulations related to the operations of
the Board, the CFPB, or the OIG.
For more information and to view the OIG’s publications, visit the OIG’s website at https://
oig.federalreserve.gov. Specific details about the OIG’s body of work also may be found in the
OIG’s Work Plan and semiannual reports to Congress.

Government Accountability Office Reviews
The Federal Banking Agency Audit Act (Pub. L. No. 95–320) authorizes the Government Accountability Office (GAO) to audit certain aspects of Federal Reserve System operations. The Dodd-Frank
Wall Street Reform and Consumer Protection Act of 2010, as well as the Coronavirus Aid, Relief,
and Economic Security Act of 2020, directs the GAO to conduct additional audits with respect to
these operations. In 2020, the GAO completed 16 projects that involved the Federal Reserve
(table C.2). Twenty-one projects were ongoing as of December 31, 2020 (table C.3).
For more information and to view GAO reports, visit the GAO’s website at https://www.gao.gov.

Table C.2. GAO reports issued in 2020
Report title

Report number

Month issued

Counternarcotics: Treasury Reports Some Results from Designating Drug Kingpins, but
Should Improve Information on Agencies’ Expenditures

GAO-20-112

January

Countering Illicit Finance and Trade: U.S. Efforts to Combat Trade-Based Money
Laundering

GAO-20-314R

January

Economic Sanctions: Treasury and State Have Received Increased Resources for
Sanctions Implementation but Face Hiring Challenges

GAO-20-324

March

Trade-Based Money Laundering: U.S. Government Has Worked with Partners to
Combat the Threat, but Could Strengthen Its Efforts

GAO-20-333

May

COVID-19: Opportunities to Improve Federal Response and Recovery Efforts

GAO-20-625

June

Financial Company Bankruptcies: Congress and Regulators Have Updated Resolution
Planning Requirements

GAO-20-608R

July

Retirement Security: DOL Could Better Inform Divorcing Parties About Dividing Savings

GAO-20-541

August

COVID-19: Brief Update on Initial Federal Response to the Pandemic

GAO-20-708

August

Critical Infrastructure Protection: Treasury Needs to Improve Tracking of Financial
Sector Cybersecurity Risk Mitigation Efforts

GAO-20-631

September

COVID-19: Federal Efforts Could Be Strengthened by Timely and Concerted Actions

GAO-20-701

September

Anti-Money Laundering: Opportunities Exist to Increase Law Enforcement Use of Bank
Secrecy Act Reports, and Banks’ Costs to Comply with the Act Varied

GAO-20-574

September

Financial Audit: Bureau of the Fiscal Service’s FY 2020 and FY 2019 Schedules of
Federal Debt

GAO-21-124

November

Consumer Privacy: Better Disclosures Needed on Information Sharing by Banks and
Credit Unions

GAO-21-36

November

COVID-19: Urgent Actions Needed to Better Ensure an Effective Federal Response

GAO-21-191

November
(continued)

150 107th Annual Report | 2020

Table C.2. GAO reports issued in 2020—continued
Report title

Report number

Month issued

Federal Reserve Lending Programs: Use of CARES Act-Supported Programs Has Been
Limited and Flow of Credit Has Generally Improved

GAO-21-180

December

Financial Stability: Agencies Have Not Found Leveraged Lending to Significantly
Threaten Stability but Remain Cautious Amid Pandemic

GAO-21-167

December

Table C.3. Projects active at year-end 2020
Subject of project

Month initiated

Status

Macroprudential regulation

August 2019

Closed 1/28/2021

Compliance with the National Flood Insurance Program mandatory purchase
requirement

September 2019

Open

Debt held by older Americans

September 2019

Open

U.S. efforts to combat trade-based money laundering (continued)

January 2020

Open

HMDA exemptions

June 2020

Open

Women in financial services

June 2020

Open

CFPB’s enforcement of fair lending

July 2020

Open

Alternative data in mortgage lending

July 2020

Open

FinCEN’s Customer Due Diligence Rule

August 2020

Terminated 1/29/2021

The housing finance system in the pandemic

August 2020

Open

CARES Act provisions to assist mortgage borrowers and renters

September 2020

Federal Reserve
removed as agency
participant 3/31/2021

Welfare of federal working dogs

September 2020

Open

Access to banking services

October 2020

Open

Treasury’s debt management response to the COVID-19 pandemic

October 2020

Open

HMDA loan volume thresholds

October 2020

Open

FIRREA title XI appraisal requirement exemptions

October 2020

Open

Financial regulator privacy practices

October 2020

Open

Monitoring and oversight of response to COVID-19 pandemic (January 2021 report)

October 2020

Closed 1/28/2021

Monitoring and oversight of response to COVID-19 pandemic (March 2021 report)

October 2020

Closed 3/31/2021

CARES Act report on loans, guarantees, and other investments (2021 report)

December 2020

Open

Native American Direct Loan program

December 2020

Open

151

Federal Reserve System Budgets

The Federal Reserve Board of Governors and the Federal Reserve Banks prepare annual budgets
as part of their efforts to ensure appropriate stewardship and accountability.1 This section presents information on the 2020 budget performance of the Board and Reserve Banks and on their
2021 budgets, budgeting processes, and trends in expenses and employment. This section also
presents information on the costs of new currency.

System Budgets Overview
Tables D.1 and D.2 summarize the Federal Reserve Board of Governors’ and Federal Reserve
Banks’ 2020 budgeted, 2020 actual, and 2021 budgeted operating expenses and employment.2

2020 Budget Performance
In carrying out its responsibilities in 2020, the Federal Reserve System incurred $5,255.4 million
in net expenses. Total System operating expenses of $6,437.1 million were offset by
$1,181.7 million in revenue from priced services, claims for reimbursement, and other income.
Total 2020 System operating expenses were $67.1 million, or 1.3 percent, less than the amount
budgeted for 2020.

2021 Operating Expense Budget
Budgeted 2021 System operating expenses of $5,877.9 million, net of revenue and reimbursements, are $622.5 million, or 11.8 percent, higher than 2020 actual expenses. The Reserve Bank
budgets comprise almost three-quarters of the System budget (figure D.1). Budgeted 2021 revenue from priced services is 1.8 percent lower than 2020 actual revenue, primarily reflecting a
continual decline in check volume, which recently has been hastened by the COVID-19 pandemic.3
1

Before 2013, information about the budgeted expenses of the Board and Reserve Banks was presented in a separate
report titled Annual Report: Budget Review. Copies of that report are available at https://www.federalreserve.gov/
publications/budget-review/default.htm.
Each budget covers one calendar year.
Substantially all employees of the Board and Reserve Banks participate in the Retirement Plan for Employees of the
Federal Reserve System (System Plan). Reserve Bank employees at certain compensation levels participate in the Benefit Equalization Plan, and certain Reserve Bank officers participate in the Supplemental Retirement Plan for Select Officers of the Reserve Banks. The operating expenses of the Reserve Banks presented in this section do not include
expenses related to the retirement plans; however, the 2020 claims for reimbursement include the allocated portion of
the pension. Additional information about these expenses can be found in appendix G, “Statistical Tables.”
Board employees also participate in the Benefit Equalization Plan, and Board officers participate in the Pension
Enhancement Plan for Officers of the Board of Governors of the Federal Reserve System (PEP). The operating expenses
of the Board presented in this section include expenses related to Board participants in the Benefit Equalization Plan
and PEP but do not include expenses related to the System Plan.
The COVID-19 pandemic emerged as a profound health emergency in early 2020 that disrupted the national and global
economy and necessitated widespread social distancing measures, such as full-time telework for many workers within
the United States, including most Federal Reserve System employees.

152 107th Annual Report | 2020

Table D.1. Total operating expenses of the Federal Reserve System, net of receipts and claims for
reimbursement, 2020–21
Millions of dollars, except as noted

Item

2020
budget

2020
actual

Variance
2020 actual to
2020 budget
Amount

Board
Office of Inspector General
1

Reserve Banks
Currency

Total System operating expenses2

2021
budget

Percent

Variance
2021 budget to
2020 actual
Amount

Percent

814.4

811.0

-3.4

-0.4

869.5

58.5

7.2

28.9

32.0

3.1

10.8

35.1

3.1

9.7

4,771.2

4,763.0

-8.2

-0.2

5,029.8

266.8

5.6

877.2

831.1

-46.1

-5.3

1,095.8

264.8

31.9

6,491.7

6,437.1

-54.6

-0.8

7,030.2

593.1

9.2

Revenue from priced services

443.8

446.9

3.1

0.7

439.1

-7.8

-1.8

Claims for reimbursement3

722.5

731.9

9.3

1.3

710.4

-21.5

-2.9

2.8

2.9

0.1

4.7

2.8

-0.1

-3.8

1,169.2

1,181.7

12.6

1.1

1,152.3

-29.4

-2.5

5,322.5

5,255.4

-67.1

-1.3

5,877.9

622.5

11.8

Other income4
Revenue and claims for reimbursement5
Total System operating expenses, net of
revenue and claims for reimbursement

Note: Here and in subsequent tables, components may not sum to totals and may not yield percentages shown because of rounding.
1
Excludes Reserve Bank assessments by the Board of Governors for costs related to currency and the operations of the Board of Governors,
Office of Inspector General, and the Consumer Financial Protection Bureau.
2
Includes total operating expenses of the Federal Reserve Information Technology support function and the System’s Office of Employee Benefits, the majority of which are in the Reserve Banks.
3
Reimbursable claims include the expenses of fiscal agency. In 2020 actual, the fiscal agency allocated portion of the pension is also
included but is not included for the budget. The fiscal agency budgeted pension expense is $48.0 million in 2020 and $68.3 million in
2021.
4
Fees that depository institutions pay for the settlement component of the Fedwire Securities Service transactions for Treasury securities
transfers.
5
Excludes annual assessments for the supervision of large financial companies pursuant to Regulation TT, which are not recognized as revenue or used to fund Board expenses. (See section 4, “Supervision and Regulation,” for more information.)

Table D.2. Employment in the Federal Reserve System, 2020–21

Item

2020
budget

2020
actual

Variance
2020 actual to
2020 budget
Amount

Board
Office of Inspector General
1

Reserve Banks
Currency

Total System employment

2021
budget

Percent

Variance
2021 budget to
2020 actual
Amount

Percent

2,903

2,896

-7

-0.2

2,971

2.6

131

127

-5

-3.7

136

7.6

19,898

20,128

230

1.2

20,652

524

2.6

-2.6

31.6

22,947

23,165

218

0.9

23,778

613

2.6

Note: Employment numbers are average number of personnel (ANP). ANP is the average number of employees expressed in terms of full-time
positions for the period and includes outside agency help. In prior Annual Reports, the Board reported authorized position counts.
1
Includes employment of the Federal Reserve Information Technology support function and the Office of Employee Benefits.

Federal Reserve System Budgets 153

Trends in Expenses and Employment
From the actual 2011 amount to the budgeted

Figure D.1. Distribution of budgeted expenses
of the Federal Reserve System, 2021

2021 amount, the total operating expenses of
Board of Governors and OIG
12.9%

the Federal Reserve System have increased
an average of 4.9 percent annually

Reserve Banks
71.5%

(figure D.2). This rate is up 0.6 percent from

Currency
15.6%

the 10-year growth rate between 2010 and
2020, reflecting technology investments. The
total rate of growth in Federal Reserve System
expenses reflects the staffing increases in
information technology (IT) to support large
application development projects, information
security efforts, end-user services, and the
central computing environment. Supervision
resource levels were augmented to meet

OIG: Office of Inspector General.

requirements of the Dodd-Frank Wall Street
Reform and Consumer Protection Act (DoddFrank Act) and to support portfolio growth

Figure D.2. Total expenses of the Federal
Reserve System, 2011–21

(figure D.3).
Growth in supervision expenses over the past

10 years has been driven by implementation

of expanded responsibilities mandated by the

Dodd-Frank Act, changes in the state member

bank portfolio, building out the cybersecurity

supervision program, and supporting other

strategic national initiatives. However, supervi-

sion growth has moderated because of the

Economic Growth, Regulatory Reform and Con-

Billions of dollars
Current dollars

2011 dollars1

2011

2013

2015

2017

2019

2021

sumer Protection Act, and as supervisory con-

Note: For 2021, budgeted. Includes expenses of the
OIG.

ditions improved, efficiencies were found and

1. Calculated with the GDP price deflator.

resources were shifted toward higher-risk
activities and emerging risks. In particular,
resources were temporarily shifted from supervision to support the credit and liquidity facilities
responding to the COVID-19 pandemic in 2020.
Expense growth in the monetary policy area during the financial crisis has been followed more
recently by increased investment in financial stability monitoring, operational activities, and the
dedication of additional resources to regional economic research.

154 107th Annual Report | 2020

Figure D.3. Employment in the Federal Reserve
System, 2011–21

Growth in fee-based services are primarily for
investments in the payment infrastructure
modernization efforts, including the FedNowSM

Service initiative, and investments associated

Thousands of persons

with multiyear technology initiatives to mod23

ernize processing platforms for Fedwire and
automated clearinghouse (ACH).4

Expenses for services to financial institutions

continue to increase as a result of the nextgeneration currency-processing program

(NextGen).5 More recently, increased demand
15
2011

2013

2015

2017

2019

2021

Note: For 2021, budgeted. From 2011 to 2018,
employment numbers presented include position
counts for the Board and the OIG and average number
of personnel (ANP) for the Reserve Banks. For 2019
through 2021, employment numbers for all entities
are represented in ANP.

for cash and social distancing protocols
related to the COVID-19 pandemic have
resulted in higher cash operations personnel
costs and other related expenses for essential on-site staff, such as hazard pay, rapid
COVID-19 testing, and frequent and in-depth
cleaning services. Growth in services to financial institutions and the public is also attribut-

able to the addition of resources in support of the credit and liquidity facilities created in response
to the COVID-19 pandemic.
Treasury services expenses have increased to meet expanding scope and evolving needs,
including business and technology modernization of payment services, financing and securities
services, and accounting and reporting services, as well as significant investment in infrastructure
and technology services.

2021 Capital Budgets
The capital budgets for the Board and Reserve Banks total $180.8 million and $598.9 million,
respectively.6 As in previous years, the 2021 capital budgets include funding for projects that support the strategic direction outlined by the Board, System leadership, and each Reserve Bank.

The Federal Reserve is developing a new round-the-clock, real-time payment and settlement service, called the FedNow
Service, to support faster payments in the United States. The initiative to modernize the ACH processing platform was
completed in early 2021.
The Cash Product Office is implementing a strategy to transition the current fleet of high-speed currency processing
machines and the associated sensor suite from the Banknote Processing System platform to the future next-generation
(NextGen) processing technologies (machines and sensor technologies).
The capital budget reported for the Board includes single-year capital expenditures and 2021 expected capital expenditures from multiyear projects of the Board and the Office of Inspector General. The capital budget reported for the
Reserve Banks includes the amounts budgeted for the Federal Reserve Information Technology support function and the
Office of Employee Benefits.

Federal Reserve System Budgets 155

These strategic goals emphasize investments that continue to improve operational efficiencies,
enhance services to Bank customers, and ensure a safe and productive work environment. Additionally, because several programs experienced pandemic-related delays in 2020, Reserve Banks’
2021 capital investments account for “COVID catch-up” work (that is, planned 2020 projects that
were delayed or deferred to 2021 as a result of the pandemic).

Board of Governors Budgets
Board of Governors
The Board’s budget is based on the principles established by the Strategic Plan 2020–23 and provides funding to advance the plan’s goals and objectives.7 This functional alignment helps ensure
organizational resources are used to advance the Board’s mission and provide a structure to fund
strategic priorities over the four-year time horizon.
The Board’s budget process is as follows:
• At the start of the budget process, the chief operating officer and chief financial officer meet
with the Committee on Board Affairs (CBA) to recommend a specific growth target for the
Board’s operating budget. For 2021, the recommended growth target included known changes in
the run-rate of the Board’s continuing operations, projected increases to retirement and postretirement benefits, and strategic priorities for 2021. After endorsement by the CBA, Division of
Financial Management (DFM) staff communicates the target to the Executive Committee, which
comprises the directors of each division.
• To manage growth across the Board, the CBA identifies specific growth rates for each functional
area: Monetary Policy and Financial Stability, Supervision, Payment System and Reserve Bank
Oversight, Public Engagement and Community Development, and Mission Enablement (Support
and Overhead).
• To achieve the CBA’s growth target, divisions allocate resources to their highest priorities and
seek tradeoffs and efficiencies.
• DFM staff review initial budget requests submitted by divisions and work collaboratively with all
divisions and functional areas to achieve the growth target.
• The chief operating officer and chief financial officer subsequently brief the CBA on the budget
submissions. Once the budget is finalized, the administrative governor submits the budget to
the full Board for review and final approval.

The Board approved the plan published in December 2019 and located at https://www.federalreserve.gov/publications/
files/2020-2023-gpra-strategic-plan.pdf.

156 107th Annual Report | 2020

Table D.3. Operating expenses of the Board of Governors, by operating area, 2020–21
Millions of dollars, except as noted

Variance
2020 actual to
2020 budget

2020
actual

Amount

Percent

Amount

Percent

Monetary policy and financial stability1

335.3

335.2

-0.1

0.0

364.1

28.9

8.6

Supervision

368.3

367.0

-1.3

-0.4

384.1

17.1

4.7

62.5

61.5

-0.9

-1.5

73.6

12.1

19.6

Item

Payment system and Reserve Bank
oversight
Public engagement and community
development
Total, Board operations
Office of Inspector General

2021
budget

Variance
2021 budget to
2020 actual

2020
budget

48.3

47.2

-1.1

-2.3

47.7

0.5

1.0

814.4

811.0

-3.4

-0.4

869.5

58.5

7.2

28.9

32.0

3.1

10.8

35.1

3.1

9.7

Note: This table presents financial performance for the Board's operating areas, which align with the Reserve Banks. Monetary policy and
financial stability aligns with monetary and economic policy within the Reserve Banks; growth in 2021 is driven by employment growth. Supervision aligns with supervision and regulation within the Reserve Banks. Payment system and Reserve Bank oversight is an operating area
unique to the Board; growth in 2021 is driven by shifting work from Supervision for several new Reserve Bank oversight programs. Public
engagement and community development algins with services to financial institutions and the public within the Reserve Banks. Office of
Inspector General growth in 2021 is driven by new positions driven by the COVID-19 pandemic response and the continually increasing importance of and risk associated with cybersecurity and information technology operations.
1
Includes the Survey of Consumer Finances.

• DFM staff monitor expenses throughout the year. Quarterly financial forecasts provide insight
into budgetary pressures. Staff analyze variances and reports the variances to senior
management.
Tables D.3, D.4, and D.5 summarize the Board’s 2020 budgeted and actual expenses and its
2021 budgeted expenses by operating area; division, office, or special account; and account classification, respectively. Table D.6 summarizes the Board’s 2020 budgeted and actual authorized
positions and its budgeted positions for 2021. Each table includes a line item for the Office of
Inspector General (OIG), which is discussed later in this section.

2020 Budget Performance
Total expenses for Board operations were $811.0 million, which was $3.4 million, or 0.4 percent,
lower than the approved 2020 budget of $814.4 million.
Personnel services expenses were $14.4 million, or 2.4 percent, higher than the approved budget,
driven by higher accrued annual leave expenses as staff used less leave as a result of the
COVID-19 pandemic. Goods and services expenses were $17.8 million, or 8.1 percent, lower than
the approved budget as the COVID-19 pandemic resulted in less-than-planned travel and training
activities and lower utilization of contractual professional services. The overrun in depreciation

Federal Reserve System Budgets 157

Table D.4. Operating expenses of the Board of Governors, by division, office, or special account,
2020–21
Millions of dollars, except as noted

Division, office, or special account

2020
budget

2020
actual

Variance
2020 actual to
2020 budget
Amount

Percent

2021
budget

Variance
2021 budget to
2020 actual
Amount

Percent

Research and Statistics

89.0

88.3

-0.7

-0.8

92.9

4.6

5.2

International Finance

36.4

34.7

-1.7

-4.5

37.1

2.4

6.8

Monetary Affairs

40.0

39.5

-0.6

-1.4

42.4

2.9

7.4

Financial Stability

14.3

14.6

0.3

2.1

16.3

1.7

11.4

Supervision and Regulation

122.6

116.4

-6.3

-5.1

123.2

6.9

5.9

Consumer and Community Affairs

34.4

34.2

-0.2

-0.7

35.7

1.6

4.6

Reserve Bank Operations and Payment
Systems

45.0

43.5

-1.4

-3.2

46.7

3.2

7.3

Board Members

26.4

24.6

-1.9

-7.0

26.2

1.7

6.8

9.4

0.0

-0.2

9.7

0.3

3.4

Legal

33.3

32.7

-0.6

-1.9

34.4

1.7

5.2

Chief Operating Officer

14.8

13.9

-0.9

-5.9

15.0

1.1

7.9

Secretary

Financial Management

14.2

13.8

-0.4

-2.6

14.5

0.7

4.8

Information Technology

127.6

132.9

5.2

4.1

139.6

6.8

5.1

Management

163.6

163.8

0.1

167.3

3.5

2.2

Special projects1

13.0

23.9

10.9

83.5

11.4

-12.5

-52.4

Centrally managed benefits2

24.7

25.5

0.8

3.1

34.8

9.3

36.6
218.1

Extraordinary items

Savings and reallocations4

25.9

12.7

-13.2

-50.9

40.4

27.7

-21.0

-14.0

7.0

-33.5

-20.3

-6.3

45.5

0.7

0.0

2.1

1.4

202.3

814.4

811.0

-3.4

-0.4

869.5

58.5

7.2

28.9

32.0

3.1

10.8

35.1

3.1

9.7

Survey of Consumer Finances5
Total, Board operations
Office of Inspector General
1
2
3

Includes centralized Boardwide benefit programs such as accrued annual leave.
Includes retirement and post-retirement benefits, which fluctuate due to changes in actuarial assumptions and demographics.
Includes several strategic projects, including the Martin renovation; replacement of the Board's human capital, finanical management, and
procurement systems; and a centralized position pool.
Includes negative adjustments to reflect measured budget risks for large, complex projects and historical under execution. In addition,
includes Board support and overhead allocations to the OIG (and Currency starting with the 2021 budget).
The survey collects information about family incomes, net worth, balance sheet components, credit use, and other financial outcomes, and
is conducted every three years.

expenses is due to the write-off of a capital asset ahead of the planned renovation and the acceleration of IT hardware purchases.
The Board’s 2020 single-year capital spending was less than budgeted by $2.3 million, or
11.8 percent. Multiyear capital projects remained within their overall project budgets; however,
actual spending in 2020 was less than budgeted by $21.1 million, or 13.1 percent, due to delays

158 107th Annual Report | 2020

Table D.5. Operating expenses of the Board of Governors, by account classification, 2020–21
Millions of dollars, except as noted

Account classification

2020
budget

2020
actual

Variance
2020 actual to
2020 budget
Amount

2021
budget

Percent

Variance
2021 budget to
2020 actual
Amount

Percent

Personnel services
Salaries

477.4

489.8

12.4

2.6

500.8

11.0

2.2

Retirement/Thrift plans

62.8

64.0

1.2

1.9

70.2

6.2

9.7

Employee insurance and other benefits

42.3

42.4

0.1

0.3

43.8

1.4

3.3

Net periodic benefits costs1

11.1

11.8

0.7

6.1

16.5

4.7

39.9

593.6

608.0

14.4

2.4

631.3

23.3

3.8

Subtotal, personnel services
Goods and services
Postage and shipping

0.4

0.3

-0.2

-36.0

0.6

0.4

130.3

15.7

4.5

-11.2

-71.3

9.4

4.9

108.7

Telecommunications

7.3

7.7

0.4

5.4

8.3

0.7

8.6

Printing and binding

0.6

0.5

-0.1

-16.6

0.7

0.2

47.3

Publications

0.4

0.3

-0.1

-17.7

0.3

0.0

5.3

Stationery and supplies

1.3

1.2

-0.1

-5.5

1.0

-0.1

-12.5

21.7

21.1

-0.6

-2.9

29.2

8.2

38.7

6.2

7.1

0.9

14.1

6.1

-0.9

-13.0

Rentals

38.0

37.3

-0.6

-1.7

38.0

0.6

1.7

Data, news, and research

15.9

15.1

-0.8

-4.8

18.3

3.2

20.9

Utilities

1.7

1.9

0.2

12.1

1.7

-0.2

-10.3

Repairs and alterations—building

4.2

4.1

-0.2

-4.1

4.7

0.6

14.1

Repairs and maintenance—F&E

5.0

5.2

0.2

4.8

5.0

-0.2

-3.7

Contractual professional services

64.7

57.6

-7.1

-11.0

67.6

10.0

17.4

Interest

0.0

-587.4

0.0

-119.4

Training and dues

5.2

3.1

-2.0

-39.1

4.9

1.7

54.1

Subsidies and contributions

3.1

2.9

-0.1

-4.7

3.2

0.2

7.4

All other

3.5

3.2

-0.3

-8.8

4.0

0.8

23.8

Travel

Software
Furniture and equipment (F&E)

Depreciation/amortization

44.2

47.6

3.4

7.8

56.2

8.6

18.1

Support and overhead allocations2 ,

-14.0

0.0

-16.9

-3.0

21.2

-0.3

-0.2

0.1

-42.5

-0.3

-0.1

81.0

-3.9

-3.6

0.3

-7.9

-3.9

-0.3

8.5

220.8

203.0

-17.8

-8.1

238.2

35.2

17.3

814.4

811.0

-3.4

-0.4

869.5

58.5

7.2

Personnel services

28.5

28.9

0.5

1.6

30.9

2.0

6.8

Goods and services4

18.1

16.7

-1.4

-7.7

19.2

2.5

15.0

IT income

Income
Subtotal, goods and services
Total, Board operations
Office of Inspector General

Subtotal, excluding operating income

46.6

45.6

-0.9

-2.0

50.1

4.5

9.8

Operating income5

-17.7

-13.6

4.0

-22.9

-15.0

-1.4

10.2

Total, OIG operations

28.9

32.0

3.1

10.8

35.1

3.1

9.7

1
2

3
4
5

Net periodic benefits costs other than services costs related to pension and post-retirement benefits.
Includes a net zero transfer of costs from the Board operating budget to the OIG and Currency operating budgets for Board support and
overhead expenses attributable to the OIG and Currency.
Includes other earned income collected from the Currency budget.
Includes Board support and overhead allocations to the OIG.
Starting with the 2020 budget, the OIG operating budget incorporated earned income from the Consumer Financial Protection Bureau.

Federal Reserve System Budgets 159

Table D.6. Positions authorized by the Board of Governors, by division, office, or special account,
2020–21

Division, office, or special account

2020
budget

2020
actual

Variance
2020 actual to
2020 budget
Amount

2021
budget

Percent

Variance
2021 budget to
2020 actual
Amount

Percent

Research and Statistics

356

0.0

356

0.0

International Finance

158

0.0

158

0.0

Monetary Affairs

171

0.0

171

0.0

Financial Stability

3.6

0.0

Supervision and Regulation

489

0.0

489

0.0

Consumer and Community Affairs

131

0.0

131

0.0

Reserve Bank Operations and Payment
Systems

182

0.0

182

0.0

Board Members

121

0.0

121

0.0

129

0.0

129

0.0

Secretary
Legal
Chief Operating Officer
Financial Management

0.0

Information Technology

413

0.0

413

0.0

Management

477

478

0.2

478

0.0

-3

-23.1

40.0

2,879

0.0

2,883

0.1

133

134

0.8

140

4.5

Extraordinary items1
Total, Board operations
Office of Inspector General

Note: Budget represents authorized position count at the beginning of the year and actual represents authorized position count at year-end.
1
Centralized position pool used for strategic areas of growth.

in building improvement and automation projects. Table D.7 summarizes the Board’s budgeted and
actual capital expenditures for 2020 and 2021.

2021 Operating Expense Budget
The 2021 budget for Board operations is $869.5 million, which is $58.5 million, or 7.2 percent, higher
than 2020 actual expenses. Staff formulated the operating budget to advance the Board’s strategic priorities, and it includes initiatives that support policy deliberations; promote safety, soundness, and stability of financial institutions; foster a safe, efficient, and accessible payment and settlement system;
promote broader, ongoing engagement with the public; and optimize operations.
In addition, the 2021 budget includes employment growth expected to occur in 2021; funding for
the Board’s compensation and benefit programs; projected increases to centrally managed retirement and post-retirement benefits, which fluctuate with changes in actuarial assumptions and
demographics; and ongoing facilities and automation projects.

160 107th Annual Report | 2020

Table D.7. Capital expenditures of the Board of Governors, by capital type, 2020–21
Millions of dollars, except as noted

Item

2020
budget

Variance
2020 actual to
2020 budget

2020
actual

Amount

Percent

2021
budget

Variance
2021 budget to
2020 actual
Amount

Percent

Board
Single-year capital expenditures

19.2

17.0

-2.3

-11.8

18.4

1.5

8.6

Multiyear capital expenditures

160.8

139.7

-21.1

-13.1

162.3

22.6

16.2

Total capital expenditures

180.0

156.6

-23.4

-13.0

180.7

24.1

15.4

Single-year capital expenditures

0.8

0.6

-0.2

-23.7

0.1

-0.5

-88.1

Multiyear capital expenditures

0.0

n/a

0.0

n/a

Total capital expenditures

0.8

0.6

-0.2

-23.7

0.1

-0.5

-88.1

180.8

157.2

-23.6

-13.0

180.8

23.6

15.0

Office of Inspector General

Board and OIG total capital
expenditures

Note: The amount reported for the multi-year capital budget represents the expected expenditure for the budget year.
n/a Not applicable.

Authorized positions for 2021 are 2,883, an increase of 4 over the 2020 authorized number, to
replenish positions allocated to divisions from the centralized position pool.

2021 Capital Budgets
The Board’s 2021 single-year capital budget totals $18.4 million, which is $1.5 million, or 8.6 percent, higher than 2020 actual capital expenditures. The increase reflects routine lifecycle replacements of equipment and building components.
The Board’s multiyear capital budget is driven by facilities projects. Expected capital expenditures
in 2021 total $162.3 million and reflect the Board’s commitment to provide a secure, modern
environment that meets the needs of the workforce and leverages opportunities to increase collaboration, efficiency, productivity, and sustainability. Table D.7 summarizes the Board’s budgeted
and actual capital expenditures for 2020 and 2021.

Office of Inspector General
The budget for the Board’s OIG is grounded in the goals established in its strategic plan.8 The
goals are to deliver results that promote agency excellence; promote a diverse, skilled, and
engaged workforce and foster an inclusive, collaborative environment; optimize external stake-

The plan is located at https://oig.federalreserve.gov/strategic-plan.htm.

Federal Reserve System Budgets 161

holder engagement; and advance organizational effectiveness and model a culture of continuous
improvement.
In keeping with its statutory independence, the OIG prepares its proposed budget apart from the
Board’s budget. The OIG presents its budget directly to the Board for approval.

2020 Budget Performance
Expenses for OIG operations, excluding operating income, were $45.6 million, which was $0.9 million, or 2.0 percent, lower than the approved 2020 budget of $46.6 million. Personnel services
expenses exceeded the approved budget amount by $0.5 million, or 1.6 percent, driven by higher
accrued annual leave expenses as staff used less leave as a result of the COVID-19 pandemic.
Goods and services expenses were $1.4 million, or 7.7 percent, lower than the approved budget
amount, driven by the effect of the COVID-19 pandemic on travel and training activities. Operating
income was $4.0 million, or 22.9 percent, lower than the approved budget amount, because the
office conducted less work related to the Consumer Financial Protection Bureau than planned.
Including operating income, total expenses for OIG operations were $32.0 million in 2020. The
OIG’s single-year capital spending was $0.2 million, or 23.7 percent, lower than the approved
budget amount.

2021 Operating Expense Budget
The 2021 budget for OIG operations, excluding operating income, is $50.1 million, which is
$4.5 million, or 9.8 percent, higher than 2020 actual expenses. This increase is driven by
expected employment growth in 2021, funding for the Board’s compensation and benefit programs, and escalations for goods and services. Employment growth is expected to cause accompanying increases in support and overhead expenses. Including operating income, the 2021
budget for OIG operations is $35.1 million.
The OIG has 140 authorized positions for 2021, an increase of 6 over the authorized number for
2020. The increase in authorized positions is driven by anticipated oversight work associated with
the Board’s COVID-19 pandemic response and the continually increasing importance of and risk
associated with cybersecurity and information technology operations.

2021 Capital Budget
The OIG’s 2021 single-year capital budget totals $0.1 million, which is $0.5 million, or 88.1 percent, lower than 2020 actual capital expenditures. The decrease is driven by fewer anticipated
equipment replacements as well as the completion of a software enhancement project in 2020.
Table D.7 summarizes the OIG’s budgeted and actual capital expenditures for 2020 and 2021.

162 107th Annual Report | 2020

Federal Reserve Banks Budgets
Each Reserve Bank establishes operating goals for the coming year that are aligned with the
System’s key strategic objectives, devises strategies for attaining those goals, estimates required
resources, and monitors results. The Reserve Banks structure their budgets around specific functional areas reflecting the core responsibilities of the Federal Reserve:
• contributing to the formulation of monetary policy and enhancing monetary policy implementation to become more effective, flexible, and resilient, including through public communication,
outreach, and economic education
• promoting financial stability through effective monitoring, analysis, and policy development
• promoting safety and soundness of financial institutions through effective supervision
• leading efforts to enhance the security, resiliency, functionality, and efficiency of services provided to financial institutions and the public
The Reserve Bank budget process is as follows:
• The Conference of Presidents, operating through its Committee on Spending Stewardship,
defines, in close consultation with the Board’s Committee on Federal Reserve Bank Affairs
(BAC), key strategic objectives for the System. Considering longer-term environmental trends
and historical growth rates of expense, these governance bodies articulate an aggregate
System-level growth expectation for a multiyear period.
• The Reserve Banks develop budgets that reflect this direction, through framing and making
appropriate trade-offs, and senior leadership in the Reserve Banks reviews the budgets for
alignment with Reserve Bank and System priorities.
• The Reserve Banks submit for Board review preliminary budget information, including documentation to support the budget request.
• Board staff analyzes the Banks’ budgets, both individually and in the context of System
initiatives.
• Expenses associated with services provided to the Treasury require authorization from the
Bureau of the Fiscal Service.
• The BAC reviews the Bank budgets.
• The Reserve Banks make any needed changes, and the BAC chair submits the revised budgets
to Board members for review and final action.
• Throughout the year, Reserve Bank and Board staffs monitor actual performance and compare it
with approved budgets and forecasts.
In addition to the budget approval process, the Reserve Banks must submit proposals for certain
capital expenditures to the Board for further review and approval.

Federal Reserve System Budgets 163

Table D.8. Operating expenses of the Federal Reserve Banks, by District, 2020–21
Millions of dollars, except as noted

District

2021
budget

Variance
2021 budget to
2020 actual

2020
actual

Amount

Percent

Amount

Percent

239.6

265.8

26.2

10.9

312.2

46.4

17.5

Boston
New York

Variance
2020 actual to
2020 budget

2020
budget

1,076.9

1,089.6

12.8

1.2

1,122.7

33.0

3.0

Philadelphia

199.4

196.4

-2.9

-1.5

210.7

14.3

7.3

Cleveland

230.2

224.9

-5.3

-2.3

236.4

11.4

5.1

Richmond

517.7

528.4

10.7

2.1

546.2

17.8

3.4

Atlanta

414.1

410.1

-4.0

-1.0

425.1

15.0

3.7

Chicago

423.7

412.0

-11.7

-2.8

453.5

41.4

10.1

St. Louis

437.3

412.6

-24.7

-5.7

446.8

34.2

8.3

Minneapolis

183.1

184.9

1.8

1.0

193.2

8.3

4.5

Kansas City

364.4

353.2

-11.2

-3.1

381.9

28.7

8.1

Dallas

243.3

244.3

0.9

0.4

258.2

13.9

5.7

San Francisco

441.4

440.7

-0.7

-0.2

443.0

2.3

0.5

4,771.2

4,763.0

-8.2

-0.2

5,029.8

266.8

5.6

Total Reserve Bank operating expenses

Note: Includes expenses of the Federal Reserve Information Technology support function and the Office of Employee Benefits and reflects all
redistributions for support and allocation for overhead. Excludes Reserve Bank capital expenditures as well as assessments by the Board of
Governors for costs related to currency and the operations of the Board of Governors and the Consumer Financial Protection Bureau.

Tables D.8, D.9, and D.10 summarize the Reserve Banks’ 2020 budgeted and actual expenses
and 2021 budgeted expenses by Reserve Bank, functional area, and account classification.9 Table D.11 shows the Reserve Banks’ budgeted and actual employment for 2020 and budgeted employment for 2021. In addition, table D.12 shows the Reserve Banks’ budgeted and
actual capital expenditures for 2020 and budgeted capital for 2021.

2020 Budget Performance
Total 2020 operating expenses for the Reserve Banks were $4,763.0 million, which is $8.2 million, or 0.2 percent, less than the approved 2020 budget of $4,771.2 million. The actual average
number of personnel (ANP) was 20,128, an overrun of 230 ANP, or 1.2 percent, from 2020 budgeted staffing levels. The COVID-19 pandemic resulted in significantly less than budgeted
expenses in travel and meetings. These underruns were largely offset by resources for the liquidity
and lending facilities, the unexpected costs to support the continued operation of the Federal
Reserve Banks during the COVID-19 pandemic, and investments to support the Federal Reserve’s

Additional information about the operating expenses of each of the Reserve Banks can be found in appendix G, “Statistical Tables” (see “Table G.9, Income and expenses of the Federal Reserve Banks, by Bank”).

164 107th Annual Report | 2020

Table D.9. Operating expenses of the Federal Reserve Banks, by operating area, 2020–21
Millions of dollars, except as noted

Variance
2020 actual to
2020 budget

2020
actual

Amount

Percent

Amount

Percent

Monetary and economic policy

786.3

805.1

18.8

2.4

845.4

40.3

5.0

Services to the U.S. Treasury and other
government agencies

668.2

619.9

-48.3

-7.2

657.8

37.8

6.1

Services to financial institutions and the
public1

1,296.4

1,345.1

48.6

3.8

1,384.6

39.6

2.9

Supervision and regulation

Operating area

2021
budget

Variance
2021 budget to
2020 actual

2020
budget

1,518.0

1,467.4

-50.5

-3.3

1,551.2

83.7

5.7

Fee-based services to financial
institutions2

502.3

525.5

23.2

4.6

590.9

65.4

12.4

Total Reserve Bank operating
expenses3

4,771.2

4,763.0

-8.2

-0.2

5,029.8

266.8

5.6

1
2
3

Services to financial institutions and the public includes cash services.
Includes operating expenses related to development of the FedNow Service.
Operating expenses exclude pension costs, reimbursements, and operating expense of the Board of Governors (see table D.4).

commitment to modernize the nation’s payment system and establish a safe and efficient foundation for the future via the FedNow Service initiative.
The Reserve Banks’ 2020 capital expenditures were less than budgeted by $219.0 million, or
41.3 percent, primarily driven by plan changes because of the COVID-19 pandemic, including
timing and scope for building-related initiatives.

2021 Operating Expense Budget
The 2021 operating budgets of the Reserve Banks total $5,029.8 million, which is $266.8 million, or 5.6 percent, higher than 2020 actual expenses.10 Growth in monetary policy reflects
increased resources dedicated to regional economic research, including studies on inflation and
low- and moderate-income communities. Treasury expenses are increasing primarily to accommodate new applications, the modernization of existing applications, and the migration of applications into the Federal Reserve environment, as well as investments to infrastructure platforms,
including the Treasury Web Applications Infrastructure (TWAI) platform and a secure cloud platform
for Treasury applications. Additionally, increases in cash expenses are driven by the second phase
of NextGen. Supervision growth has moderated because of more-efficient oversight focusing on

On December 10, 2020, the Board approved the 2021 Reserve Bank operating budgets totaling $5,029.8 million, including
$657.8 million in Treasury services. Because the U.S. Department of the Treasury’s Bureau of the Fiscal Service (Fiscal Service)
had not fully determined the level of funding for fiscal services provided by the Federal Reserve

Federal Reserve System Budgets 165

Table D.10. Operating expenses of the Federal Reserve Banks, by account classification, 2020–21
Millions of dollars, except as noted

2020
budget

2020
actual

3,504.5

3,589.1

Building

354.0

Software costs

329.4

Account classification

Variance
2020 actual to
2020 budget
Amount

Salaries and other benefits1

2021
budget

Percent

Variance
2021 budget to
2020 actual
Amount

Percent

211.3

5.9

84.6

2.4

3,800.4

350.0

-4.0

-1.1

346.9

-3.1

-0.9

305.5

-23.9

-7.3

342.0

36.5

11.9

Equipment

194.5

194.0

-0.5

-0.3

234.8

40.8

21.0

Recoveries2

-383.6

-377.1

6.5

-1.7

-381.9

-4.9

1.3

Expenses capitalized

-90.0

-79.0

11.0

-12.2

-137.5

-58.5

74.1

All other3

862.3

780.4

-81.9

-9.5

825.1

44.7

5.7

4,771.2

4,763.0

-8.2

-0.2

5,029.8

266.7

5.6

Total Reserve Bank operating expenses
1

2
3

Includes salaries, other personnel expense, and retirement and other employment benefit expenses. It does not include pension expenses
related to all the participants in the Retirement Plan for Employees of the Federal Reserve System and the Reserve Bank participants in the
Benefit Equalization Plan and the Supplemental Retirement Plan for Select Officers of the Federal Reserve Banks. These expenses are
recorded as a separate line item in the financial statements; see “Table G.9. Income and expenses of the Federal Reserve Banks, by Bank”
in appendix G, “Statistical Tables.”
Includes tenant rent recoveries.
Includes fees, materials and supplies, travel, communications, and shipping.

areas of risk and allocating resources to the highest priorities. Increases in fee-based services
reflect investments in FedNow Service.
Total 2021 budgeted employment for the Reserve Banks, Federal Reserve Information Technology
(FRIT), and the Office of Employee Benefits (OEB) is 20,652 ANP, an increase of 524 ANP, or
2.6 percent, from 2020 actual employment levels. A key driver of this resource increase is support
for the FedNow Service. Other primary sources of growth are the national support functions, in
which additional resources are planned to support System strategic initiatives in procurement,
finance, and human resource management; further centralize support functions to realize economies of scale; and enhance product offerings and ensure the security and resiliency of the FedLine
Solutions.11 Further contributing to the growth are resources to support ongoing currency opera-

Banks in time for a sufficient review, the portion of the 2021 Banks’ budgets associated with services to the Treasury was not
considered final. The subsequent reductions identified by Fiscal Service constituted less than the 1 percent threshold for such
adjustments explicitly specified in the Board’s approval, and consequently the final budgets were approved by the director of the
Division of Reserve Bank Operations and Payment Systems under limited delegated authority. Additional information is available
at https://www.federalreserve.gov/foia/files/2021ReserveBankBudgets.pdf.
In addition, the chair of the BAC designated a portion of the 2021 operating expense budgets associated with selected
investments in the Treasury and the OEB for conditional approval. Subsequently, the director of the Board’s Division of
Reserve Bank Operations and Payment Systems, acting under limited delegated authority, similarly designated reductions identified by Fiscal Service, bringing total conditionally approved operating expenses to $40.1 million, requiring
additional review and approval by the director of the Division of Reserve Bank Operations and Payment Systems.
Enhancements to the FedLine Solutions include a multiyear transformational effort focused on evolving the FedLine network, authentication, and hosting infrastructure to meet customer, industry, and Federal Reserve System needs.

166 107th Annual Report | 2020

Table D.11. Employment at the Federal Reserve Banks, by District, and at FRIT and OEB, 2020–21
Variance
2020 actual to
2020 budget

Variance
2021 budget to
2020 actual

2020
budget

2020
actual

Amount

Percent

Amount

Percent

Boston

1,055

1,030

-25

-2.3

1254

224

21.7

New York

3,223

3,204

-19

-0.6

3218

0.4

864

887

2.7

881

-6

-0.7

Cleveland

1,030

1,028

-2

-0.2

1052

2.3

Richmond

1,460

1,500

2.8

1514

0.9

Atlanta

1,730

1,734

0.2

1734

0.0

Chicago

1,606

1,618

0.7

1676

3.6

St. Louis

1,415

1,442

1.9

1458

1.1

Minneapolis

1,054

1,068

1.3

1088

1.8

Kansas City

2,064

2,092

1.3

2096

0.2

Dallas

1,278

1,297

1.4

1323

2.0

District

Philadelphia

San Francisco
Total, all Districts
Federal Reserve Information Technology

1,762

1,800

2.2

1826

1.5

18,542

18,702

160

0.9

19120

418

2.2

1,295

1,365

5.4

1,465

100

7.3

0.0

8.6

19,898

20,128

230

1.2

20,652

524

2.6

Office of Employee Benefits

Total

2021
budget

tions and the NextGen program as well as community development initiatives, regional economic
research, and outreach initiatives.
Reserve Bank officer and staff personnel expenses for 2021 total $2,964.1 million, an increase
of $168.4 million, or 6.0 percent, from 2020 actual expenses. The increase reflects expenses
associated with additional staff and budgeted salary administration adjustments.12
The 2021 Reserve Bank budgets include a salary administration program for eligible officers,
senior professionals, and staff totaling $110.6 million and a variable pay program totaling
$242.0 million.

2021 Capital Budgets
The 2021 capital budgets for the Reserve Banks, FRIT, and OEB total $598.9 million.13 The
increase in the 2021 capital budget is $287.0 million, or 92.0 percent, greater than the 2020
12
13

The salary administration program includes a budgeted pool for merit increases, equity adjustments, and promotions.
The Board delegated the approval of the resources for services provided to the Treasury to the director of the Division of
Reserve Bank Operations and Payment Systems pending final authorization from the Bureau of the Fiscal Service. The

Federal Reserve System Budgets 167

Table D.12. Capital expenditures of the Federal Reserve Banks, by District, and of FRIT and OEB,
2020–21
Millions of dollars, except as noted

District

2020
budget

2020
actual

Variance
2020 actual to
2020 budget
Amount

2021
budget

Percent

Variance
2021 budget to
2020 actual
Amount

Percent

Boston

21.7

11.1

-10.6

-48.7

85.3

74.2

666.8

New York1

87.6

-30.7

-118.3

-135.1

78.8

109.5

-356.8

Philadelphia

75.3

55.8

-19.5

-25.9

54.8

-1.0

-1.8

Cleveland

25.9

24.9

-0.9

-3.5

28.0

3.1

12.4

Richmond

20.8

6.8

-14.0

-67.1

17.7

10.9

159.7

Atlanta

26.9

9.9

-17.0

-63.3

34.2

24.4

247.4

Chicago

21.4

15.2

-6.2

-29.1

32.6

17.4

114.6

St. Louis

15.2

5.3

-9.9

-65.4

19.4

14.1

268.3

Minneapolis

12.6

11.5

-1.1

-8.8

25.6

14.1

123.1

Kansas City

44.6

43.2

-1.5

-3.3

35.9

-7.3

-16.9

Dallas

27.0

8.6

-18.4

-68.1

26.8

18.2

211.0

San Francisco

63.8

60.1

-3.6

-5.7

82.8

22.6

37.7

442.7

221.7

-221.0

-49.9

521.9

300.2

135.4

84.8

85.5

0.7

0.8

76.8

-8.7

-10.2

3.4

4.7

1.3

37.7

0.2

-4.5

-95.7

530.9

311.9

-219.0

-41.3

598.9

287.0

92.0

Total, all Districts
Federal Reserve Information Technology
Office of Employee Benefits

Total
1

New York's 2020 actual capital outlays include $75.9 million of asset impairments, most notably for the write-off of the Technology Improvements of Treasury Auction (TITAN) initiative.

actual levels of $311.9 million, largely reflecting ongoing multiyear IT and building strategic initiatives, some of which were paused in 2020 because of the COVID-19 pandemic. Initiatives in the
2021 capital budget support major workspace renovations, address aging building infrastructure
in several Reserve Banks, improve IT infrastructure, and provide application upgrades and
releases.

Capital Expenditures Designated for Conditional Approval
The BAC chair designated projects with an aggregate cost of $114.6 million in 2021 for conditional approval, requiring additional review and approval by the director of the Board’s Division of
Reserve Bank Operations and Payment Systems before the funds are committed.14 The expenditures designated for conditional approval by the chair of the BAC include large-scale building proj-

2021 capital budget, including those capital expenditures designated for conditional approval, reflect the final authorization from Fiscal Service.
Generally, capital expenditures that are designated for conditional approval include certain building projects, District
expenditures that substantially affect or influence future System direction or the manner in which significant services

168 107th Annual Report | 2020

ects to renovate office space and update building infrastructure. Technology projects include support for services performed on behalf of the Treasury, investments for FedNow Service,
and NextGen.

Other Capital Expenditures
Significant capital expenditures (typically expenditures exceeding $1 million) that are not designated for conditional approval include total multiyear budgeted expenditures of $948.1 million for
2021 and future years, of which the single-year 2021 budgeted expenditures are $381.1 million.
This category includes building expenditures for office space renovations, mechanical and electrical infrastructure upgrades, building automation, and security enhancements. IT projects include
ongoing infrastructure investments; initiatives that enable better access to data and enhance
cybersecurity and cyberresiliency; and applications to support fee-based services, supervision,
cash, and open market operations.
Capital initiatives that are individually less than $1 million are budgeted at an aggregate amount
of $103.2 million for 2021 and include building maintenance expenditures, scheduled software
and equipment upgrades, and equipment and furniture replacements.

Currency Budget
The currency budget provides funds to reimburse the Treasury’s Bureau of Engraving and Printing
(BEP) for expenses related to the production of banknotes, and the Board’s activities related to its
role as issuing authority of the nation’s currency in the form of Federal Reserve notes.15 As
issuing authority, the Board works closely with its strategic partners, such as the Reserve Banks,
the Department of the Treasury, the BEP, and the U.S. Secret Service to help maintain the integrity
of and public confidence in our nation’s currency.
The Board works to ensure that the notes meet quality standards from production through destruction, monitors counterfeiting risks and threats for each denomination, contributes to the development of security features and new design concepts, and conducts adversarial analysis to ensure
the security features and designs are robust against counterfeiting. The budget includes activities
that support its issuing authority role, the cost of shipping new currency from the BEP to Reserve
Banks and fit currency between Reserve Banks, and funds the Currency Education Program (CEP).
The CEP aims to protect and maintain confidence in U.S. currency worldwide, working closely with

are performed, expenditures that may be inconsistent with System direction or vary from previously negotiated purchasing agreements, and local expenditures that duplicate national efforts.
As mandated by the Federal Reserve Act, section 16, the Board reimburses the BEP for all costs related to the production of Federal Reserve notes. Section 16 of the Federal Reserve Act also requires that all costs incurred for the issuing
of notes shall be paid for by the Board and included in its assessments to the Reserve Banks. All operations and capital
investments of the BEP are financed by a revolving fund that is reimbursed through product sales, nearly all of which are
sales of Federal Reserve notes to the Board to fulfill its annual print order.

Federal Reserve System Budgets 169

other agencies and departments of the U.S. government, to provide information and conduct outreach through a variety of channels.
The annual currency budget process is as follows:
• Each year, under authority delegated by the Board, the director of the Division of Reserve Bank
Operations and Payment Systems submits a fiscal year print order for notes to the director of
the BEP.16
• The BEP forecasts expenses for the calendar-year currency budget, including fixed and variable
costs for printing Federal Reserve notes, facility costs, and support costs. Board staff develop
budgets for Board expenses in relation to strategic guidance set by Cash leadership.
• The BAC reviews the proposed currency budget.
• The BAC chair submits the proposed currency budget to Board members for review and
final action.

2020 Budget Performance
The Board’s 2020 actual operating expenses for new currency were $831.1 million, $46.1 million,
or 5.3 percent, below the budgeted amount for 2020. The budget underrun is primarily attributable
to the postponement of facility reimbursements to the BEP.
The cost underrun is partially offset by a cost overrun in variable production and transportation
costs due to the COVID-19 pandemic-related demand for currency. The 2020 banknote development underrun is primarily the result of a contract termination for design services, delays for several projects that were initially affected by the COVID-19 pandemic, and new contracts that took
longer to procure than anticipated.

2021 Budget
Table D.13 summarizes the 2021 currency operating budget of $1,095.8 million.17 The proposed
2021 operating budget represents an increase of $264.8 million, or 31.9 percent, from 2020
actual expenses. BEP costs associated with the printing of Federal Reserve notes are 94.0 percent of the operating budget. Board expenses for currency transportation, banknote development,
and currency education comprise the remaining 6.0 percent of the operating budget.

The Board delivers the annual print order to the BEP director in August of each year, and copies are available on the
Board’s public website at https://www.federalreserve.gov/paymentsystems/coin_currency_orders.htm.
In 2018, the Board approved a $3.2 million multicycle capital budget for counterfeit inspection information technology
equipment. In 2021, no additional capital funds were requested.

170 107th Annual Report | 2020

Table D.13. Federal Reserve currency budget, 2020–21
Millions of dollars, except as noted

2020
budget

Item

2020
actual

Variance
2020 actual to
2020 budget
Amount

Variance
2021 budget to
2020 actual

2021
budget

Percent

Amount

Percent

Printing Federal Reserve notes
BEP fixed printing costs

499.8

475.8

-24.0

-4.8

518.6

42.8

9.0

BEP variable printing costs

233.1

302.6

69.5

29.8

456.8

154.2

51.0

Fort Worth facility expansion

60.0

0.0

-60.0

-100.0

0.0

D.C. facility design work

30.0

0.0

-30.0

-100.0

49.6

Currency reader

1.0

0.9

-0.1

-7.0

1.1

0.2

20.7

Destruction and compliance

3.8

4.1

0.3

7.9

3.9

-0.2

-4.6

19.0

25.0

6.0

31.5

33.6

8.6

34.3

27.0

18.8

-8.2

-30.4

26.4

7.6

40.6

3.5

3.9

0.4

11.8

5.9

2.0

49.9

877.2

831.1

-46.1

-5.3

1,095.8

264.8

31.9

BEP facility reimbursements

n/a

BEP support costs

Board expenses
Currency transportation
Banknote development

Currency education1
Operating budget

n/a Not applicable.
1
Personnel, travel, and training costs were previously displayed as line items in the budget. These costs are now included in the Banknote
development and Currency education budget categories that they support.

Figure D.4. Federal Reserve costs for currency,
2011–21

BEP Costs
The proposed 2021 budget to fund the BEP
expenses associated with the printing of Fed-

1200

eral Reserve notes is $1,030.0 million, which

Millions of dollars

is $246.6 million, or 31.5 percent, greater

1000

than 2020 actual expenses. The primary

800

driver of this increase is higher printing costs

600

due to the continued demand for currency
400

from the COVID-19 pandemic.

200
0

The proposed budget for fixed printing costs is
2011

2013

2015

Note: For 2021, budgeted.

2017

2019

2021

$518.6 million, which is $42.8 million, or
9.0 percent, greater than 2020 actual
expenses. The increase is primarily attributable to pandemic-related expenses, including

additional healthcare staff, disinfection services, and information technology support. Pay
increases and increased staffing to fill vacancies also contribute to the growth.

Federal Reserve System Budgets 171

Variable costs are increasing because of the higher volume print order and denominational mix,
which is skewed to the higher-denomination notes that are more expensive to produce. The budgeted 2021 calendar year note deliveries are increasing 31.9 percent from the 2020 actual deliveries. The corresponding 2021 budget for variable printing costs is 51.0 percent higher than the
2020 actual costs, including an increase of about $24.0 million for new paper contracts.
The increase in BEP facility reimbursements represent the Board’s plan to resume reimbursement
of the new BEP building project in Washington, D.C. The total cost of the new facility and production machinery in Washington, D.C., is estimated to be $1.4 billion over the life of the project,
which began in 2019 and is expected to be completed in 2030. This project is in the development
stage, and the Board expects to reimburse the BEP $49.6 million for design and site demolition
costs in 2021.

Board Costs
Board costs are estimated to be $65.8 million, or 38.1 percent, more than 2020 actual expenses.
The increase is primarily driven by currency transportation costs due to the higher volume of notes
to ship, higher denomination allocation, and alternate transportation methods for business continuity purposes.18
The Banknote development budget increases include contract services to develop prototype equipment to assess quality at the BEP. The Board will also conduct market research to identify trends
in the market for equipment that accepts and dispenses banknotes. Contract resources will support financial management and construction oversight for reimbursements of the new Washington
D.C. currency production facility. The budget includes funding for the Counterfeit Currency Processing Facility (CCPF) initiative to support counterfeit deterrent activities to develop prototype
technology to identify, analyze, and classify suspect counterfeit notes.
In 2021, Currency education will broaden its domestic and international outreach to businesses
and consumers, create digital content that supports both classroom and remote learning options,
and maintain the uscurrency.gov educational website. Increases include both contract and personnel expenses, including one additional authorized position from the 2020 budget.
The Banknote development and Currency education budget categories also include increases of
$1.2 million and $1.0 million, respectively, for support and overhead costs, which have been transferred to these programs from the Board’s budget based on authorized positions.19

The higher denominations typically ship by air, making their shipment costs higher than those of lower denominations,
which ship over the road. Alternative transportation methods include chartered air service, which is more expensive than
traditional shipment options but provides flexibility and resiliency.
Beginning in 2021, the Currency budget will include support and overhead costs from the Board of Governors for enterprise information technology, facilities, law enforcement, human resources, and other services.

172 107th Annual Report | 2020

2021 Capital Budget
In 2018, the Board approved a $3.2 million multicycle capital budget, of which, $0.2 million is
budgeted in 2021 for information technology development in support of the CCPF initiative.

173

Record of Policy Actions of the Board
of Governors

Policy actions of the Board of Governors are presented pursuant to section 10 of the Federal
Reserve Act. That section provides that the Board shall keep a record of all questions of policy
determined by the Board and shall include in its annual report to Congress a full account of such
actions. This appendix provides a summary of policy actions in 2020, including actions taken to
support market functioning and the flow of credit to the economy following the outbreak of the
coronavirus pandemic and associated containment measures (the COVID event). Policy actions
were implemented through (1) rules and regulations, (2) policy statements and other actions,
(3) special facilities, and (4) discount rates for depository institutions. More information on the
actions is available from the relevant Federal Register notices or other documents (see links in
footnotes) or on request from the Board’s Freedom of Information Office. This appendix also provides information on the Board and the Government Performance and Results Act.
For information on the Federal Open Market Committee’s policy actions relating to open market
operations, see appendix B, “Minutes of Federal Open Market Committee Meetings.”

Rules and Regulations
Regulation D (Reserve Requirements of Depository Institutions)
Effective March 24, 2020 (changes to reserve requirement ratios applicable on March 26,
2020). On March 15, 2020, the Board approved an interim final rule and request for comment
(Docket No. R-1702) to lower reserve ratios on transaction accounts maintained at depository
institutions to 0 percent.1 In January 2019, the Federal Open Market Committee (FOMC)
announced its intention to implement an ample-reserves regime. Reserve requirements do not
play a significant role in this operating framework. The interim final rule eliminates reserve requirements for thousands of depository institutions and helps to support lending to households and
businesses.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.
Effective April 24, 2020. On April 23, 2020, the Board approved an interim final rule and request
for comment (Docket No. R-1715) to delete the six-per-month limit on convenient transfers and
1

See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-03-24/html/2020-05806.htm.

174 107th Annual Report | 2020

withdrawals that may be made from “savings deposits.”2 Regulation D distinguishes between
reservable “transaction accounts” and non-reservable “savings deposits” based on the ease with
which the depositor may make transfers or withdrawals from the account. Effective March 26,
2020, reserve requirement ratios were reduced to 0 percent, thus eliminating reserve requirements for thousands of depository institutions and rendering the regulatory distinction between
the two types of accounts unnecessary. The interim final rule permits, but does not require,
depository institutions to allow their customers to make an unlimited number of convenient transfers and withdrawals from their savings deposits at a time when financial events associated with
the COVID event have made such access more urgent.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.
Effective March 12, 2021. On December 21, 2020, the Board approved a final rule (Docket
No. R-1702) to adopt without change the interim final rule approved on March 15, 2020, to lower
reserve requirement ratios on transaction accounts maintained at depository institutions to 0 percent.3
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman. Abstaining: Governor Waller.

Regulations H (Membership of State Banking Institutions in the Federal
Reserve System) and Q (Capital Adequacy of Bank Holding Companies, Savings
and Loan Holding Companies, and State Member Banks)
Effective June 1, 2020. On May 15, 2020, the Board approved an interim final rule and request
for comment (Docket No. R-1718), issued jointly with the Federal Deposit Insurance Corporation
(FDIC) and Office of the Comptroller of the Currency (OCC) (together with the Board, “the agencies”), to temporarily revise the supplementary leverage ratio (SLR) calculation for depository institutions, in light of disruptions in economic conditions caused by the COVID event.4 Under the
interim final rule, depository institutions may choose to exclude U.S. Treasury securities and
deposits at Federal Reserve Banks from the SLR calculation through the first quarter of 2021. If a
depository institution does change its SLR calculation, it will be required to request approval from
its primary federal banking regulator before making capital distributions, such as paying dividends
to its parent company, for as long as the exclusion is in effect.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.

2
3
4

See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-04-28/html/2020-09044.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2021-02-10/html/2020-28756.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-06-01/html/2020-10962.htm.

Record of Policy Actions of the Board of Governors 175

Regulation O (Loans to Executive Officers, Directors, and Principal Shareholders
of Member Banks)
Effective April 22, 2020. On April 17, 2020, the Board approved an interim final rule and request
for comment (Docket No. R-1714) to except Paycheck Protection Program (PPP) loans made
through June 30, 2020, from requirements limiting the types and quantity of loans that certain
bank directors, shareholders, officers, and businesses owned by these persons can receive from
their related banks.5 To bolster the effectiveness of the Small Business Administration’s (SBA’s)
PPP in light of the COVID event, the interim final rule excepts from the requirements of section
22(h) of the Federal Reserve Act and certain provisions of the Board’s Regulation O loans guaranteed under the PPP and not prohibited by the SBA’s lending restrictions, subject to certain limits.
The interim final rule prohibits a banking organization from favoring, in processing time or prioritization, a PPP application of one of its directors or shareholders.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.
Effective July 16, 2020. On July 12, 2020, the Board approved an interim final rule and request
for comment (Docket No. R-1722) to extend through August 8, 2020, the exception for PPP loans
from limits on the types and quantity of loans that certain bank directors, shareholders, officers,
and businesses owned by these persons can receive from their related banks.6 Note: On February 5, 2021, the Board approved an interim final rule and request for comment (Docket
No. R-1740) to extend this exception for PPP loans through March 31, 2021.7
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.

Regulation Q (Capital Adequacy of Bank Holding Companies, Savings and Loan
Holding Companies, and State Member Banks)
Effective March 20, 2020. On March 17, 2020, the Board approved an interim final rule and
request for comment (Docket No. R-1703), issued jointly with the FDIC and OCC, to revise the definition of “eligible retained income” for all depository institutions, bank holding companies, and
savings and loan holding companies (together, “banking organizations”) subject to the agencies’
capital rules.8 The interim final rule facilitates the use of banking organizations’ capital buffers to
promote lending activity to households and businesses, in light of the COVID event. The revised
definition of eligible retained income will make any automatic limitations on capital distributions
that could apply under the agencies’ capital rules more gradual.
5
6
7
8

See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-04-22/html/2020-08574.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-07-16/html/2020-15367.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2021-02-17/html/2021-02966.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-03-20/html/2020-06051.htm.

176 107th Annual Report | 2020

Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governor Bowman. Abstaining: Governor Brainard.
Effective March 23, 2020. On March 19, 2020, the Board approved an interim final rule and
request for comment (Docket No. R-1705), issued jointly with the FDIC and OCC, to facilitate
lending under the Money Market Mutual Fund Liquidity Facility (MMLF).9 The Board had authorized
the establishment of the MMLF to provide liquidity to the money market sector and help stabilize
the financial system in light of the strains on the economy due to the COVID event. The interim
final rule allows banking organizations to neutralize the regulatory capital effects of participating in
the MMLF. This capital treatment is also extended to the community bank leverage ratio.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.
Effective March 31, 2020. On March 26, 2020, the Board approved a notice (Docket
No. R-1629), issued jointly with the FDIC and OCC, to allow depository institutions and depository
institution holding companies to implement the Standardized Approach for Calculating the Exposure Amount of Derivative Contracts (SA-CCR) for the first quarter of 2020, on a best-efforts basis,
to help improve market liquidity and smooth disruptions caused by the COVID event.10 The SA-CCR
final rule was finalized by the agencies in November 2019, with an effective date of April 1, 2020.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.
Effective March 31, 2020. On March 27, 2020, the Board approved an interim final rule and
request for comment (Docket No. R-1708), issued jointly with the FDIC and OCC, to delay the estimated impact on regulatory capital of the implementation of the Current Expected Credit Losses
(CECL) accounting standard.11 The interim final rule provides banking organizations that implement CECL in 2020 with the option to delay for two years an estimate of CECL’s effect on regulatory capital, relative to the incurred loss methodology’s effect on regulatory capital, followed by a
three-year transition period. The agencies provided this relief to allow such banking organizations
to better focus on supporting lending to creditworthy households and businesses in light of disruptions in economic conditions caused by the COVID event, while also maintaining the quality of
regulatory capital.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.

9
10
11

See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-03-23/html/2020-06156.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-03-31/html/2020-06755.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-03-31/html/2020-06770.htm.

Record of Policy Actions of the Board of Governors 177

Effective April 14, 2020. On April 1, 2020, the Board approved an interim final rule and request
for comment (Docket No. R-1707) to revise, on a temporary basis for bank holding companies
(BHCs), savings and loan holding companies (SLHCs), and U.S. intermediate holding companies
(IHCs) of foreign banking organizations, the calculation of total leverage exposure, the denominator
of the SLR.12 Under the interim final rule, BHCs, SLHCs, and IHCs may choose to exclude U.S.
Treasury securities and deposits at Federal Reserve Banks from the SLR calculation through the
first quarter of 2021.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.
Effective April 23, 2020. On April 3, 2020, the Board approved two interim final rules and
requests for comment (Docket Nos. R-1710 and R-1711), issued jointly with the FDIC and OCC, to
implement the provision of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) that
required the agencies to reduce the community bank leverage ratio (CBLR) temporarily to 8 percent.13 Under one of the interim final rules, a qualifying banking organization with a leverage ratio
of 8 percent or greater could elect to use the CBLR framework as of the second quarter of 2020
and continuing for the remainder of the year. In addition, the other interim final rule establishes a
graduated transition from the temporary 8 percent CBLR back to a 9 percent or greater CBLR by
January 1, 2022.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.
Effective April 13, 2020. On April 8, 2020, the Board approved an interim final rule and request
for comment (Docket No. R-1712), issued jointly with the FDIC and OCC, to facilitate lending under
the Board’s Paycheck Protection Program Liquidity Facility (PPPLF).14 The Board had established
the PPPLF to provide liquidity to small business lenders and the broader credit markets, help stabilize the financial system, and provide economic relief to small businesses. The interim final rule
allows banking organizations to neutralize the regulatory capital effects of participating in the
PPPLF. In addition, as mandated by the CARES Act, the interim final rule states that loans originated under the SBA’s PPP receive a 0 percent risk weight under the agencies’ regulatory
capital rules.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.

12
13

See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-04-14/html/2020-07345.htm.
See Federal Register notices at https://www.govinfo.gov/content/pkg/FR-2020-04-23/html/2020-07449.htm and
https://www.govinfo.gov/content/pkg/FR-2020-04-23/html/2020-07448.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-04-13/html/2020-07712.htm.

178 107th Annual Report | 2020

Effective January 1, 2021. On August 25, 2020, the Board approved a final rule (Docket
No. R-1703), issued jointly with the FDIC and OCC, to adopt, without change, the interim final rule
approved on March 17, 2020, revising the definition of “eligible retained income” for all banking
organizations subject to the agencies’ capital rules.15
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governor Bowman. Voting against this action: Governor Brainard.
Effective September 30, 2020. On August 25, 2020, the Board approved a final rule (Docket
No. R-1708), issued jointly with the FDIC and OCC, to delay the estimated impact on regulatory
capital of the implementation of the CECL accounting standard.16 The final rule is consistent with
the interim final rule approved on March 27, 2020, but makes certain clarifications and minor
adjustments related to the mechanics of the transition and the eligibility criteria for applying the transition.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.
Effective November 9, 2020. On August 25, 2020, the Board approved a final rule (Docket
No. R-1711), issued jointly with the FDIC and OCC, to adopt, without change, the two interim final
rules on the CBLR approved on April 3, 2020.17
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.
Effective December 28, 2020. On September 24, 2020, the Board approved a final rule (Docket
Nos. R-1705 and R-1712), issued jointly with the FDIC and OCC, to adopt, without change, the
interim final rules approved on March 19 and April 8, 2020.18 Under the final rule, banking organizations may continue to neutralize the regulatory capital effects of participating in the MMLF and
the PPPLF.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.

15
16
17
18

See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-10-08/html/2020-19829.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-09-30/html/2020-19782.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-10-09/html/2020-19922.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-10-28/html/2020-21894.htm.

Record of Policy Actions of the Board of Governors 179

Regulations Q (Capital Adequacy of Bank Holding Companies, Savings and Loan
Holding Companies, and State Member Banks) and YY (Enhanced Prudential
Standards)
Effective April 1, 2021. On October 19, 2020, the Board approved a final rule (Docket
No. R-1655), issued jointly with the FDIC and OCC, that applies to the largest banking organizations in order to reduce interconnectedness within the financial system and systemic risks.19 U.S.
global systemically important bank holding companies (G-SIBs) and U.S. intermediate holding companies of foreign G-SIBs are required to issue debt with certain features under the Board’s total
loss-absorbing capacity (TLAC) rule. To discourage the largest banking organizations from purchasing TLAC debt, the final rule prescribes a more stringent regulatory capital treatment for holdings of TLAC debt. In addition, the final rule makes clarifying changes to the TLAC requirements.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.

Regulations Q (Capital Adequacy of Bank Holding Companies, Savings and Loan
Holding Companies, and State Member Banks), Y (Bank Holding Companies and
Change in Bank Control), and YY (Enhanced Prudential Standards)
Effective May 18, 2020. On February 28, 2020, the Board approved a final rule (Docket
No. R-1603) to simplify the regulatory capital framework by integrating the capital rule’s non-stress
capital requirements and the Board’s Comprehensive Capital Analysis and Review (CCAR) through
the establishment of a stress capital buffer (SCB) requirement, beginning with CCAR 2020.20
Under the final rule, the Board uses the results of its supervisory stress test to establish the size
of the SCB component of a firm’s capital conservation buffer requirement. A firm that does not
maintain capital ratios above its minimums plus its buffer requirements faces restrictions on its
capital distributions and discretionary bonus payments. The final rule applies to BHCs and IHCs of
foreign banking organizations that have $100 billion or more in total consolidated assets.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governor Bowman. Voting against this action: Governor Brainard.

Regulation Y (Bank Holding Companies and Change in Bank Control)
Effective April 17 through December 31, 2020. On April 10, 2020, the Board approved an interim
final rule and request for comment (Docket No. R-1713), issued jointly with the FDIC and OCC, to
temporarily amend the agencies’ appraisal regulations to allow the deferral of required real estaterelated appraisals and evaluations for up to 120 days after the closing of certain residential or
commercial real estate transactions, not including real estate acquisition, development, and con-

19
20

See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2021-01-06/html/2020-27046.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-03-18/html/2020-04838.htm.

180 107th Annual Report | 2020

struction transactions.21 The interim final rule helps banking institutions to expeditiously extend
liquidity to households and businesses in light of the strains on the economy due to the
COVID event.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.
Effective October 16 through December 31, 2020. On September 24, 2020, the Board approved
a final rule (Docket No. R-1713), issued jointly with the FDIC and OCC, to temporarily amend the
agencies’ appraisal regulations by deferring appraisal and evaluation requirements for certain real
estate-related transactions.22 The final rule is substantially similar to the interim final rule
approved on April 10, 2020, but clarifies the meaning of “transactions for the acquisition, development, and construction of real estate” by adopting the definition for “construction, land development, and other land loans” from the existing FFIEC Call Report instructions.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.

Regulations Y (Bank Holding Companies and Change in Bank Control) and LL
(Savings and Loan Holding Companies)
Effective April 1, 2020. On January 30, 2020, the Board approved a final rule (Docket
No. R-1662) to standardize and increase the transparency of the Board’s control rules for BHCs
and SLHCs.23 Under U.S. banking law, if a company has control over a bank or savings association
(“a bank”), it is generally subject to Federal Reserve regulation and supervision. Historically, the
Board has decided many questions of control on a case-by-case basis. The final rule establishes a
comprehensive public framework that outlines combinations of factors and thresholds that trigger
presumptions of control. Under the new framework, key control factors to be considered include a
company’s equity investment in a bank, the director and employee overlaps between a company
and a bank, and the scope of business relationships between a company and a bank.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.
Effective September 30, 2020. On March 31, 2020, the Board approved a final rule (Docket
No. R-1662) to delay by six months the effective date for its revised control framework, in light of
dislocations in the U.S. economy from the COVID event.24

21
22
23
24

See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-04-17/html/2020-08216.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-10-16/html/2020-21563.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-03-02/html/2020-03398.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-04-02/html/2020-06993.htm.

Record of Policy Actions of the Board of Governors 181

Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.

Regulation KK (Swaps Margin and Swaps Push-Out)
Final rule effective August 31, 2020; interim final rule effective September 1, 2020. On
June 24, 2020, the Board approved a final rule (Docket No. R-1682) and an interim final rule and
request for comment (Docket No. R-1721), both issued jointly with the FDIC, OCC, Farm Credit
Administration, and Federal Housing Finance Agency.25 The final rule amends the swap margin
requirements of the agencies’ swap margin rules by allowing certain amendments to legacy
swaps, providing exemptions for many inter-affiliate swaps from initial margin requirements, and
clarifying the timing for documentation requirements.26 The interim final rule delays the implementation of initial margin requirements for the final two phases of the swap margin rule as a result of
the COVID event.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governor Bowman. Voting against this action: Governor Brainard.

Regulation TT (Supervision and Regulation Assessments of Fees)
Effective January 7, 2021. On November 12, 2020, the Board approved a final rule (Docket
No. R-1683) to modify the annual assessment fees for its supervision and regulation of large
financial companies, as required by EGRRCPA.27 The final rule raises the minimum threshold for
being considered an assessed company from $50 billion to $100 billion in total consolidated
assets for BHCs and SLHCs and adjusts the amount charged to assessed companies with total
consolidated assets between $100 billion and $250 billion to reflect changes in supervisory and
regulatory responsibilities resulting from EGRRCPA.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.

Regulation VV (Proprietary Trading and Relationships with Covered Funds)
Effective October 1, 2020. On June 25, 2020, the Board approved a final rule (Docket
No. R-1694), issued jointly with the FDIC, OCC, Commodity Futures Trading Commission, and Securities and Exchange Commission, amending the agencies’ regulations implementing section 13 of

See Federal Register notices at https://www.govinfo.gov/content/pkg/FR-2020-07-01/html/2020-14097.htm and
https://www.govinfo.gov/content/pkg/FR-2020-07-01/html/2020-14094.htm.
For Regulation KK, the agencies are the Board, FDIC, OCC, Farm Credit Administration, and Federal Housing
Finance Agency.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-12-08/html/2020-25623.htm.

182 107th Annual Report | 2020

the Bank Holding Company Act (commonly known as the Volcker rule).28 The final rule modified
certain provisions of the agencies’ regulations related to hedge funds and private equity funds to
simplify and clarify compliance with the rule, reduce the extraterritorial application of the requirements, and permit certain fund-related investments and activities—including payment, clearing,
and settlement activities—that do not present the risks that the Volcker rule was intended to
address.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governor Bowman. Voting against this action: Governor Brainard.

Regulation WW (Liquidity Risk Measurement Standards)
Effective May 6, 2020. On April 30, 2020, the Board approved an interim final rule and request
for comment (Docket No. R-1717), issued jointly with the FDIC and OCC, to amend the liquidity
coverage ratio (LCR) rule to facilitate banking organizations’ participation in the PPPLF and the
MMLF.29 The interim final rule facilitates participation in the PPPLF and MMLF by requiring banking
organizations to neutralize the LCR impact associated with the non-recourse funding provided by
these facilities, thereby ensuring that the effects of the use of these facilities are consistent and
predictable under the LCR rule.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.
Effective December 28, 2020. On September 24, 2020, the Board approved a final rule (Docket
No. R-1717), issued jointly with the FDIC and OCC, to adopt as final the amendments to the LCR
rule made under an interim final rule approved on April 30, 2020.30 Under the final rule, banking
organizations are required to continue to neutralize the LCR effects of participating in the MMLF
and PPPLF.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.
Effective July 1, 2021. On October 20, 2020, the Board approved a final rule (Docket
No. R-1537), issued jointly with the FDIC and OCC, to implement a minimum Net Stable Funding
Ratio (NSFR) requirement for certain large banking organizations.31 Under the final rule, large
banking organizations are required to maintain a minimum amount of stable funding to support

29
30
31

For Regulation VV, the agencies are the Board, FDIC, OCC, Commodity Futures Trading Commission, and Securities and
Exchange Commission. See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-07-31/html/
2020-15525.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-05-06/html/2020-09716.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-10-28/html/2020-21894.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2021-02-11/html/2020-26546.htm.

Record of Policy Actions of the Board of Governors 183

their assets, commitments, and derivative exposures over a one-year time horizon. The NSFR is
designed to reduce the likelihood that disruptions to a banking organization’s regular sources of
funding would compromise its liquidity position, promote effective liquidity risk management, and
support the ability of banking organizations to lend to businesses and households across a range
of market conditions.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governor Bowman. Voting against this action: Governor Brainard.

Regulation YY (Enhanced Prudential Standards)
Effective March 26, 2020. On March 21, 2020, the Board approved an interim final rule and
request for comment (Docket No. R-1706) to revise the definition of “eligible retained income” for
purposes of the Board’s TLAC rule, in light of disruptions in economic conditions and strains in
U.S. financial markets caused by the COVID event.32 The revised definition of eligible retained
income will make any automatic limitations on capital distributions that could apply under the
TLAC rule more gradual.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governor Bowman. Abstaining: Governor Brainard.
Effective May 28, 2020. On April 30, 2020, the Board approved a final rule (Docket No. R-1534)
to extend by 18 months the initial compliance dates for certain requirements in the Board’s singlecounterparty credit limit (SCCL) rule applicable to the combined U.S. operations of foreign
banks.33 The SCCL rule allows a foreign banking organization to comply with the counterparty
limits applicable to its combined U.S. operations by certifying to the Board that it meets SCCL
standards established by its home-country supervisor that are consistent with the large-exposures
framework published by the Basel Committee on Banking Supervision. The final rule provides additional time for foreign jurisdictions’ implementation of their SCCL standards to become effective.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles, and
Governors Brainard and Bowman.
Effective January 1, 2021. On August 25, 2020, the Board approved a final rule (Docket
No. R-1706) to adopt, without change, the interim final rule approved on March 21, 2020, revising
the definition of “eligible retained income” for purposes of the Board’s TLAC rule.34

32
33
34

See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-03-26/html/2020-06371.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-05-28/html/2020-09665.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-10-08/html/2020-19829.htm.

184 107th Annual Report | 2020

Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governor Bowman. Voting against this action: Governor Brainard.

Temporary Regulatory Relief for Community Banking Organizations
Effective December 2, 2020. On November 16, 2020, the Board approved an interim final rule
and request for comment (Docket No. R-1731), issued jointly with the FDIC and OCC, to provide
certain community banking organizations with temporary relief from various requirements in
Regulations H, K, L, Q, Y, II, and LL.35 Due to their participation in federal coronavirus response
programs (such as the PPP) and other lending to support the U.S. economy, many community
banking organizations have experienced rapid and unexpected increases in their sizes, which could
subject them to new regulations or reporting requirements. The interim final rule allows national
banks, savings associations, state banks, BHCs, SLHCs, and U.S. branches and agencies of foreign banking organizations with under $10 billion in total assets as of December 31, 2019, to use
asset data as of that date to determine the applicability of various regulatory asset thresholds
during calendar years 2020 and 2021.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.

Rules Regarding Availability of Information
Effective October 15, 2020. On July 10, 2020, the Board approved a final rule (Docket
No. R-1665) to make technical, clarifying updates to its Freedom of Information Act (FOIA) procedures and changes to its rules for the disclosure of confidential supervisory information (CSI),
which is supervisory information belonging to the Board that may include proprietary financial
institution-specific information.36 The final rule updates the definitions for expedited processing
and the different categories of FOIA requesters and amends or clarifies other information to help
users more easily navigate the process of filing a FOIA request. While the final rule does not
expand or reduce the information that falls within the current definition of CSI, it updates certain
outdated and inefficient restrictions governing the disclosure of CSI, for example, by allowing
supervised financial institutions to share CSI with all affiliates, rather than only with their parent
bank holding companies. In addition, the final rule allows financial institutions to share CSI with
service providers without obtaining Reserve Bank approval.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.

35
36

See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-12-02/html/2020-26138.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-09-15/html/2020-18806.htm.

Record of Policy Actions of the Board of Governors 185

Policy Statements and Other Actions
Determination on Investments in “Elevated Poverty Areas” as Public Welfare
Investments
On February 21, 2020, the Board determined that certain investments made by a state member
bank in an elevated poverty area where the poverty rate is 20 percent or higher, if the area is considered a low- or moderate-income (LMI) area and the investments are targeted toward LMI persons or small businesses, are investments “designed primarily to promote the public welfare,”
within the meaning of section 9(23) of the Federal Reserve Act and section 208.22 of the Board’s
Regulation H, provided all other statutory and regulatory criteria are met.37
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.

Appeals of Material Supervisory Determinations and Role of the Ombudsman
Effective April 1, 2020. On March 2, 2020, the Board approved a final policy statement
(Docket No. OP-1696) on appeals of material supervisory determinations and the functions of the
Ombudsman for the Federal Reserve System.38 The final policy improves and expedites the
internal appeals process for institutions, particularly institutions in troubled condition, wishing to
appeal an adverse material supervisory determination. The final policy also formalizes many of the
current practices of the Ombudsman, including the receipt of supervisory-related complaints and
material supervisory determination appeals, and clarifies certain aspects of the Ombudsman’s role.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.

Credit Losses and Credit Risk Review Systems
On March 13, 2020, the Board approved a final Interagency Policy Statement on Allowances for
Credit Losses (Docket No. OP-1680) and final Interagency Guidance on Credit Risk Review Systems (Docket No. OP-1679).39 The policy statement and the interagency guidance were issued
jointly with the FDIC, OCC, and National Credit Union Administration. The policy statement promotes consistency in the interpretation and application of the Financial Accounting Standards
Board’s credit losses accounting standard, which introduces the CECL methodology. The policy
statement describes the measurement of expected credit losses using the CECL methodology and
37

38
39

See CA letter 20-9 at https://www.federalreserve.gov/supervisionreg/caletters/CA%20209%20Poverty%20Measures%20and%20Public%20Welfare%20Investments%20(051220).pdf.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-03-17/html/2020-05491.htm.
See Federal Register notices at https://www.govinfo.gov/content/pkg/FR-2020-06-01/html/2020-10291.htm and
https://www.govinfo.gov/content/pkg/FR-2020-06-01/html/2020-10292.htm.

186 107th Annual Report | 2020

updates concepts and practices detailed in existing supervisory guidance that remain applicable.
The interagency guidance presents principles for establishing a system of independent, ongoing
credit risk reviews in accordance with safety and soundness standards.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.

Section 23A of the Federal Reserve Act and Regulation W (Transactions
between Member Banks and Their Affiliates)
On March 17, 2020, the Board approved a policy to temporarily provide exemptions from the
requirements of section 23A of the Federal Reserve Act and the Board’s Regulation W, in light of
significant volatility in financial markets as a result of the COVID event.40 The temporary policy permitted certain banks to purchase certain assets from their affiliated money market mutual funds,
subject to conditions and limitations, to enable the funds to meet their contractual obligations and
avoid further market stress. The exemptions issued pursuant to the policy expired six months
from the date of issuance.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.
On March 18, 2020, the Board approved a policy to temporarily provide exemptions from the
requirements of section 23A of the Federal Reserve Act and the Board’s Regulation W, in light of
the COVID event.41 The temporary policy permitted certain banks to purchase certain assets from
their affiliated broker-dealers, subject to conditions and limitations, to help stabilize short-term
bank and corporate funding markets. The exemptions issued pursuant to the policy expired one
week from the date of issuance.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.

Policy on Payment System Risk
On March 23, 2020, the Board approved a notice (Docket No. OP-1589) to delay, from April 1 to
October 1, 2020, the implementation of changes to its Policy on Payment System Risk (PSR
policy) related to procedures for determining the net debit cap and maximum daylight overdraft
capacity of a U.S. branch or agency of a foreign banking organization.42 This additional time

See the template letter at https://www.federalreserve.gov/supervisionreg/legalinterpretations/
fedreserseactint20200317.pdf.
See the template letter at https://www.federalreserve.gov/supervisionreg/legalinterpretations/
fedreserseactint20200318.pdf.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-04-06/html/2020-06482.htm.

Record of Policy Actions of the Board of Governors 187

allowed foreign banking organizations and the Federal Reserve Banks to focus on heightened priorities, in light of the challenges posed by the COVID event.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.
Effective April 24 through September 30, 2020. On April 23, 2020, the Board approved a policy
statement (Docket No. OP-1716) temporarily adjusting the manner in which the Reserve Banks
administer Part II of the PSR policy to encourage banking institutions to use intraday credit
extended by Reserve Banks, on both a collateralized and uncollateralized basis, to support the
provision of liquidity to households and businesses and the general smooth functioning of payment systems.43 The PSR policy provides access to intraday credit to healthy institutions, subject
to net debit caps and fees for uncollateralized overdrafts. The Board temporarily lifted net debit
caps and fees for these institutions due to the extraordinary disruptions from the COVID event.
The Board also temporarily adopted a streamlined process to allow secondary credit institutions to
request collateralized capacity from their Reserve Banks.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.
On September 24, 2020, the Board approved a notice (Docket No. OP-1692) to amend the previously announced implementation date of (1) modifications to Federal Reserve Bank (Reserve
Bank) wholesale payment services and (2) corresponding changes to the PSR policy, from
March 19 to March 8, 2021, except for two changes to the PSR policy that will still be implemented on March 19, 2021.44 This earlier implementation date will permit the Reserve Banks to
test and implement modifications to the Fedwire® Funds Service and the National Settlement Service before March 19, 2021 (NACHA’s current effective date for implementing the later same-day
ACH window).
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.
Effective September 30, 2020, to March 31, 2021. On September 30, 2020, the Board approved
an extension of the temporary actions approved on April 23, 2020, to encourage healthy depository institutions to utilize intraday credit extended by Federal Reserve Banks (Docket No. OP-1716).45
The temporary actions were previously scheduled to expire on September 30, 2020.

43
44
45

See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-04-28/html/2020-09052.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-09-30/html/2020-21532.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-10-06/html/2020-22005.htm.

188 107th Annual Report | 2020

Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.

Resolution Plans
On May 5, 2020, in light of challenges arising from the COVID event, the Board approved an extension of two resolution plan deadlines: (1) to September 29, 2020, for the resolution plans of four
firms (Barclays, Credit Suisse, Deutsche Bank, and UBS) that were required to remediate certain
previously identified shortcomings and (2) to September 29, 2021, for the targeted resolution
plans from large foreign and domestic banks in categories II and III of the large bank regulatory
framework.46 The determination to extend the two deadlines was made jointly with the FDIC.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.
On June 29, 2020, the Board approved (1) scope letters to the eight largest and most complex
domestic banking organizations to guide their next resolution plans, which are due by July 1,
2021, and (2) letters to certain firms whose failure or discontinuance would threaten U.S. financial stability to inform the firms of the results of a review of their “critical operations.”47 All the
letters were issued jointly with the FDIC.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.
On December 8, 2020, the Board approved final guidance (Docket No. OP-1699), issued jointly
with the FDIC, for the 2021 and subsequent resolution plan submissions by certain foreign
banks.48 In the guidance, the Board and FDIC provided their tailored expectations for an orderly
resolution under the U.S. Bankruptcy Code. The scope of the guidance was also modified to generally cover foreign banks in category II of the large bank regulatory framework. In addition, the
Board and FDIC jointly approved targeted-scope letters to foreign banks in categories II and III of
the large bank regulatory framework and extended the submission date for these firms’ resolution
plans to December 17, 2021.49 The targeted-scope letters identify areas of interest that are
required to be addressed in the firms’ 2021 targeted resolution plans. In particular, these targeted plans will be required to include core elements of a firm’s resolution strategy as well as how
each firm has integrated changes to, and lessons learned from, its response to the COVID event
into its resolution planning process. The Board and FDIC also jointly concluded that the previously

46
47
48
49

See press release at https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200506a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200701a.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-12-22/html/2020-28155.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/bcreg20201209a.htm.

Record of Policy Actions of the Board of Governors 189

identified shortcomings in the resolution plans of Barclays, Credit Suisse, Deutsche Bank, and
UBS had been remediated.
Voting for the final guidance: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision
Quarles, and Governor Bowman. Voting against the final guidance: Governor Brainard.
Voting for the other resolution plan actions: Chair Powell, Vice Chair Clarida, Vice Chair for
Supervision Quarles, and Governors Brainard and Bowman.

Capital Planning and Stress Testing
On June 18, 2020, the Board approved actions to ensure large banks remained well capitalized,
given economic disruptions caused by the COVID event.50 As a result of changes in financial markets or the macroeconomic outlook that could have a material impact on the risk profile and financial condition of each of the 33 banking organizations participating in the 2020 stress test cycle,
the Board required the firms to resubmit their capital plans within 45 days of receiving updated
scenarios from the Board.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.
Under the Board’s rules, a firm may not make a capital distribution following an event requiring
resubmission unless it receives prior approval from the Board. Therefore, on the same day, the
Board authorized firms, for the third quarter of 2020, to make certain dividend payments
according to a cap and a formula based on their recent income. The Board did not authorize firms
to make share repurchases.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governor Bowman. Voting against this action: Governor Brainard.
On June 24, 2020, the Board approved (1) publicly disclosing summary results of the additional
sensitivity analyses conducted in light of coronavirus-related events that had significantly and
adversely impacted global financial markets and (2) notifying each firm participating in the 2020
stress test cycle of its SCB requirement, effective for the fourth quarter of 2020.51 The additional
sensitivity analyses assessed the resiliency of large banks under three hypothetical downside scenarios: a V-shaped recession and recovery; a slower, U-shaped recession and recovery; and a
W-shaped, double-dip recession.

50
51

See press release at https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200625c.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200625c.htm.

190 107th Annual Report | 2020

Voting for these actions: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.
On September 30, 2020, the Board approved extending the third-quarter limits on capital distributions, with minor modifications, through the fourth quarter of 2020.52
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governor Bowman. Voting against this action: Governor Brainard.
On December 17, 2020, the Board approved extending the fourth-quarter limits on capital distributions, with certain modifications, through the first quarter of 2021.53 For the first quarter of 2021,
the Board limited the firms’ dividend payments and share repurchases to an amount based on a
firm’s income over the past year.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governor Bowman. Voting against this action: Governor Brainard.
On the same day, the Board also approved an extension of the time period for notifying each firm
whether its SCB would be recalculated, from January 15 to March 31, 2021.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.

Instant Payments
On August 5, 2020, the Board approved a service announcement (Docket No. OP-1670) outlining
the features and functionality of the FedNow Service, a new interbank round-the-clock, real-time
gross payment and settlement service.54 The FedNow Service, alongside similar services provided
by the private sector, will support banks’ provision of end-to-end instant payment services and will
provide infrastructure to promote ubiquitous, safe, and efficient instant payments in the United
States. Work related to the implementation of the FedNow Service is ongoing, and the target
launch date is estimated for 2023.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.

52
53
54

See press release at https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200930b.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/bcreg20201218b.htm.
See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2020-08-11/html/2020-17539.htm.

Record of Policy Actions of the Board of Governors 191

Countercyclical Capital Buffer
On December 18, 2020, the Board approved affirmation of the Countercyclical Capital Buffer
(CCyB) at the current level of 0 percent.55 In making this determination, the Board followed the
framework detailed in the Board’s policy statement for setting the CCyB.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.

Interest on Reserves
On January 29, 2020, the Board approved raising the interest rate paid on required and excess
reserve balances from 1.55 percent to 1.60 percent, effective January 30, 2020.56 This action
was taken to support the FOMC’s decision on January 29 to maintain the federal funds rate in a
target range of 1½ to 1¾ percent. Setting the interest rate paid on required and excess reserve
balances 10 basis points above the bottom of the target range for the federal funds rate was
intended to foster trading in the federal funds market at rates well within the FOMC’s target range.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.
On March 3, 2020, the Board approved lowering the interest rate paid on required and excess
reserve balances from 1.60 percent to 1.10 percent, effective March 4, 2020.57 This action was
taken to support the FOMC’s decision on March 3 to lower the target range for the federal funds
rate by 50 basis points, to a range of 1 percent to 1¼ percent.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.
On March 15, 2020, the Board approved lowering the interest rate paid on required and excess
reserve balances from 1.10 percent to 0.10 percent, effective March 16, 2020.58 This action was
taken to support the FOMC’s decision on March 15 to lower the target range for the federal funds
rate to 0 to ¼ percent.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.

55
56
57
58

See press release at https://www.federalreserve.gov/newsevents/pressreleases/bcreg20201218c.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200129a1.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200303a1.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200315a1.htm.

192 107th Annual Report | 2020

Special Facilities
Against the background of continued disruptions in economic conditions following the COVID
event, the Board in 2020 established special facilities to support the flow of credit to households,
businesses, and state and local governments. The facilities were established pursuant to section 13(3) of the Federal Reserve Act, under which the Board may, in unusual and exigent circumstances and with the prior approval of the Secretary of the Treasury, authorize a Federal Reserve
Bank to extend credit to any participant in a program or facility with broad-based eligibility. The
Board’s section 13(3) lending authority is subject to limitations, including a prohibition on lending
to entities that are insolvent and a requirement that the relevant Federal Reserve Bank be secured
to its satisfaction in connection with emergency loans.59 Unless otherwise indicated, the Federal
Reserve Bank of New York administers the 2020 facilities. The Secretary of the Treasury approved
the establishment of, and amendments to, all of the facilities, and all actions to establish or
amend the facilities were approved by the unanimous vote of Chair Powell, Vice Chair Clarida, Vice
Chair for Supervision Quarles, and Governors Brainard and Bowman. The December 28, 2020,
action on the Main Street Lending Program was approved by these five Board members and Governor Waller.60

Commercial Paper Funding Facility
On March 17, 2020, the Board approved the establishment of the Commercial Paper Funding
Facility (CPFF) to ensure the smooth functioning of the commercial paper market by providing a
liquidity backstop to U.S. issuers of commercial paper, including municipalities, through the purchase of three-month unsecured and asset-backed commercial paper directly from eligible
issuers.61 The U.S. Department of the Treasury invested $10 billion of equity in the CPFF from the
Treasury's Exchange Stabilization Fund (ESF).
On March 20 and 22, 2020, the Board approved expanding the terms of the instruments purchased by the CPFF and a reduction in the pricing of the facility.62
On July 22, 2020, the Board approved expanding the eligible counterparties for the CPFF.63
On November 28, 2020, the Board approved an extension of the CPFF until March 31, 2021.64

59
60
61
62
63
64

See 12 U.S.C. § 343(3); 12 C.F.R. § 201.4(d).
Governor Waller was sworn in as a member of the Board on December 18, 2020.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200317a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200323b.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200723a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20201130a.htm.

Record of Policy Actions of the Board of Governors 193

Main Street Lending Program
The Board established the Main Street Lending Program to support lending to small and mediumsized for-profit businesses and nonprofit organizations that were in sound financial condition
before the COVID event. The program, which terminated on January 8, 2021, operated through the
following five facilities:
• Main Street New Loan Facility (MSNLF)
• Main Street Expanded Loan Facility (MSELF)
• Main Street Priority Loan Facility (MSPLF)
• Nonprofit Organization New Loan Facility (NONLF)
• Nonprofit Organization Expanded Loan Facility (NOELF)
On April 8, 2020, the Board approved the establishment of the MSNLF and MSELF to support the
flow of credit to small and medium-sized businesses by offering four-year loans to companies
employing up to 10,000 workers or with 2019 annual revenues of up to $2.5 billion.65 Under the
term sheets, principal and interest payments on the loans were deferred for one year, and eligible
lenders were permitted to originate new Main Street loans or use Main Street loans to increase
the size of existing loans to eligible businesses. A special-purpose vehicle (SPV) was established
by the Federal Reserve Bank of Boston (the Boston Reserve Bank) to purchase 95 percent of eligible loans from eligible lenders, with lenders retaining a 5 percent share. Borrowers also were
required to follow compensation, stock repurchase, and dividend restrictions that applied to direct
loan programs under the CARES Act. Firms participating in the SBA’s PPP were also permitted to
take out Main Street loans. The Treasury, using CARES Act funding, committed to invest $75 billion of equity in the SPV established for the Main Street facilities.
On April 30, 2020, the Board approved an expansion of the MSNLF and MSELF and the establishment of the MSPLF, which provided for increased risk sharing by lenders.66 After the announcement of the MSNLF and MSELF on April 8, the Board requested public feedback on potential
refinements to the Main Street Lending Program. Based on this feedback, the Board (1) lowered
the minimum loan size for certain loans to $500,000 and (2) expanded the pool of eligible businesses for all Main Street loans to businesses with up to 15,000 employees or up to $5 billion in
2019 annual revenues. Under the new MSPLF term sheet, lenders would have retained a 15 percent share on loans that, when added to a borrower’s existing debt, did not exceed six times the
borrower’s earnings, after appropriate adjustments for interest payments, taxes, and depreciation
and other matters. The Boston Reserve Bank SPV would have purchased 85 percent of eligible
MSPLF loans from eligible lenders.
65

See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200409a.htm. The
Board had earlier announced plans to establish a Main Street Lending Program (see press release at https://
www.federalreserve.gov/newsevents/pressreleases/monetary20200323b.htm).
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200430a.htm.

194 107th Annual Report | 2020

On June 8, 2020, the Board approved expanding the MSNLF, MSELF, and MSPLF to allow more
small and medium-sized businesses to receive support.67 The changes included lowering the
minimum loan size for certain loans to $250,000 from $500,000; increasing the maximum loan
size for all three facilities; increasing the term of each loan option from four years to five years;
and extending the repayment period for all loans by delaying principal payments until the end of
the third year, rather than the end of the second year. Under these terms, the Boston Reserve
Bank SPV purchased 95 percent of eligible MSPLF loans from eligible lenders, and lenders
retained 5 percent of each loan. The Board also announced plans to develop a Main Street loan
program for nonprofit organizations.
On July 13, 2020, the Board approved the establishment of the NONLF and NOELF to provide
greater access to credit for nonprofit organizations, such as educational institutions, hospitals,
and social services organizations, that were in sound financial condition before the pandemic.68
Organizations participating in the NONLF or NOELF were required to be tax-exempt nonprofit organizations described in section 501(c)(3) or 501(c)(19) of the Internal Revenue Code. On June 15,
the Board had requested public comment on proposals for nonprofit lending facilities and considered public feedback when establishing the terms of the two new facilities.69 Specifically, the
minimum employment threshold for nonprofits was lowered from 50 employees to 10, the limit on
donation-based funding was eased, and several financial eligibility criteria were adjusted to accommodate a wider range of nonprofit operating models. The Main Street nonprofit loan terms generally mirrored those of Main Street for-profit business loans, including the interest rate, principal
and interest payment deferral, five-year term, and minimum and maximum loan sizes. The Boston
Reserve Bank SPV purchased 95 percent of eligible loans from eligible lenders, and lenders
retained 5 percent of each loan.
On July 27, 2020, the Board approved an extension of the termination date for all five Main Street
Lending Program facilities from September 30 to December 31, 2020.70
On October 29, 2020, the Board approved adjustments to the MSNLF, MSPLF, and NONLF to better
target support to smaller businesses: (1) the minimum loan size was lowered from $250,000 to
$100,000 and (2) a separate fee structure was created for loans with an initial principal amount
of $100,000 to $250,000. Technical changes were also made to the term sheets for all five Main
Street Lending Program facilities.71

67
68
69
70
71

See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200608a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200717a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200615b.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200728a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20201030a.htm.

Record of Policy Actions of the Board of Governors 195

On December 28, 2020, the Board approved an extension of the termination date for all Main
Street Lending Program facilities to January 8, 2021, to allow more time to process and fund
loans that were submitted to the Main Street lender portal on or before December 14, 2020.72
The extension was consistent with section 1005 of the Consolidated Appropriations Act, 2021.

Money Market Mutual Fund Liquidity Facility
On March 18, 2020, the Board approved the establishment of the Money Market Mutual Fund
Liquidity Facility (MMLF) to enhance the liquidity and functioning of crucial money markets.73 Under
the MMLF, the Boston Reserve Bank made loans available to eligible financial institutions, and the
loans were secured by high-quality assets purchased by the financial institution from money
market mutual funds. The Treasury provided $10 billion of credit protection to the Federal Reserve
in connection with the MMLF from the Treasury’s ESF.
On March 20, 2020, the Board approved enhancing the MMLF to include tax-exempt money market
funds as eligible funds and to include highly rated paper issued by municipalities as eligible
collateral.74
On March 22, 2020, the Board approved expanding the assets covered by the MMLF to include a
wider range of securities, including municipal variable-rate demand notes and bank certificates of
deposit.75
On July 27, 2020, the Board approved an extension of the termination date for the MMLF from
September 30 to December 31, 2020.76
On November 28, 2020, the Board approved an extension of the termination date for the MMLF
from December 31, 2020, to March 31, 2021.77

Municipal Liquidity Facility
On April 8, 2020, the Board approved the establishment of the Municipal Liquidity Facility (MLF) to
provide up to $500 billion in lending to states and municipalities to help them better manage cash
flow pressures and continue to serve households and businesses in their communities.78 The
MLF was authorized to purchase short-term notes directly from U.S. states, U.S. counties with a
population of at least 2 million residents, and U.S. cities with a population of at least 1 million

72
73
74
75
76
77
78

See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20201229a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200318a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200320b.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200323b.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200728a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20201130a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200409a.htm.

196 107th Annual Report | 2020

residents. The Treasury, using CARES Act funding, committed to invest $35 billion of equity in the
SPV established for the MLF.
On April 27, 2020, the Board approved the expansion of the scope and duration of the MLF.79 The
population thresholds were lowered to 500,000 for U.S. counties and 250,000 for U.S. cities. To
be eligible for purchase by the MLF, short-term notes issued by eligible municipalities had to
mature no later than 36 months from the date of issuance—an increase from the previously
announced 24-month maximum term—and meet certain other requirements. In addition, the facility’s termination date was extended to December 31, 2020.
On May 10, 2020, the Board approved amendments to the terms of the MLF to update pricing and
other information.80
On June 3, 2020, the Board approved expanding the number and types of entities eligible to
directly issue notes to the MLF to include at least two cities or counties in each state, regardless
of population. Governors of each state could also designate two issuers within their jurisdictions
whose revenues were generally derived from operating government activities (such as public
transit, airports, toll facilities, and utilities) to be eligible to directly use the facility.81
On August 11, 2020, the Board approved amendments to revise the MLF’s pricing methodology by
reducing the interest rate spread on tax-exempt notes for each credit rating category by 50 basis
points and reducing the amount by which the interest rate for taxable notes could be adjusted
relative to tax-exempt notes.82 Note: The MLF ceased purchasing eligible notes on
December 31, 2020.

Paycheck Protection Program Liquidity Facility
On April 8, 2020, the Board approved the establishment of the Paycheck Protection Program
Liquidity Facility (PPPLF) to supply liquidity to participating financial institutions through term
financing backed by PPP loans.83 The SBA’s PPP provides loans to small businesses that are fully
guaranteed by the SBA. Upon certain conditions, PPP loans can be completely forgiven so that
small businesses can keep their workers on the payroll. Under the PPPLF, the Federal Reserve
Banks could extend credit on a nonrecourse basis to eligible financial institutions that originated
PPP loans, taking the loans as collateral at face value.

79
80
81
82
83

See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200427a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200511a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200603a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200811a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200409a.htm.

Record of Policy Actions of the Board of Governors 197

On April 30, 2020, the Board approved expanding the PPPLF to provide access to additional
lenders and allow eligible borrowers to pledge as collateral whole PPP loans they had purchased.
PPPLF participation was open to all SBA-approved PPP lenders, including credit unions, community
development financial institutions, members of the Farm Credit System, small business lending
companies licensed by the SBA, and some financial technology firms.84
On July 27, 2020, the Board approved an extension of the termination date for the PPPLF from
September 30 to December 31, 2020.85
On November 28, 2020, the Board approved an extension of the termination date for the PPPLF
from December 31, 2020, to March 31, 2021.86 Note: On March 4, 2021, the Board approved an
extension of the termination date for the PPPLF to June 30, 2021.87

Primary Dealer Credit Facility
On March 17, 2020, the Board approved the establishment of the Primary Dealer Credit Facility
(PDCF) to smooth market functioning and facilitate the availability of credit to businesses and
households.88 Under the PDCF, primary dealers could obtain term financing for up to 90 days in
exchange for a broad range of collateral.
On July 27, 2020, the Board approved an extension of the termination date for the PDCF from
September 30 to December 31, 2020.89
On November 28, 2020, the Board approved an extension of the PDCF from December 31, 2020,
to March 31, 2021.90

Primary Market Corporate Credit Facility
On March 22, 2020, the Board approved the establishment of the Primary Market Corporate Credit
Facility (PMCCF) to support credit to large employers through bond and loan issuances.91 The
PMCCF was open to companies that were investment grade as of March 22, 2020, and met certain other conditions. The Treasury committed to an initial investment in the PMCCF using
ESF funds.

84
85
86
87
88
89
90
91

See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200430b.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200728a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20201130a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20210308a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200317b.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200728a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20201130a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200323b.htm.

198 107th Annual Report | 2020

On April 8, 2020, the Board approved expanding the size and scope of the PMCCF.92 The changes
included an updated pricing scheme, new issuer limits, and other changes to reflect the fact that
the Treasury, using CARES Act funding, committed to invest $75 billion of equity in the SPV established for both the PMCCF and the Secondary Market Corporate Credit Facility.
On June 29, 2020, the Board approved an updated term sheet for the PMCCF that added pricing
and other information. Prices were issuer specific and subject to minimum and maximum spreads
over comparable-maturity the Treasury securities.93
On July 27, 2020, the Board approved an extension of the termination date for the PMCCF from
September 30 to December 31, 2020.94 Note: The PMCCF was no longer authorized to purchase
eligible assets as of December 31, 2020.

Secondary Market Corporate Credit Facility
On March 22, 2020, the Board approved the establishment of the Secondary Market Corporate
Credit Facility (SMCCF) to support market liquidity through the purchase of (1) secondary-market
corporate bonds issued by U.S. companies that were investment grade as of March 22, 2020, and
met certain other conditions, and (2) U.S.-listed exchange-traded funds whose investment objective was to provide broad exposure to the market for U.S. corporate bonds.95 The Treasury committed to an initial investment in the SMCCF using ESF funds.
On April 8, 2020, the Board approved expanding the size and scope of the SMCCF.96 The changes
included allowing the purchase of (1) bonds issued by companies that fell below investment grade
following the announcement of the facility (so long as they remained rated at least BB-) and (2) a
limited amount of certain exchange-traded funds. The changes also reflect that the Treasury, using
CARES Act funding, committed to make a $75 billion equity investment in the SPV established for
the SMCCF and the PMCCF.
On June 15, 2020, the Board approved updates to the SMCCF to authorize the facility to buy a
broad and diversified portfolio of corporate bonds, thereby supporting market liquidity and the
availability of credit for large employers.97 The changes authorized the SMCCF to purchase individual corporate bonds to create a portfolio based on a broad, diversified market index of U.S.

92
93
94
95
96
97

See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200409a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200629a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200728a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200323b.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200409a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200615a.htm.

Record of Policy Actions of the Board of Governors 199

corporate bonds that met the SMCCF’s issuer rating requirements and certain other conditions.
Note: On July 23, the Board announced an expansion of counterparties for the SMCCF.98
On July 27, 2020, the Board approved an extension of the termination date for the SMCCF from
September 30 to December 31, 2020.99 Note: The SMCCF ceased purchasing eligible assets on
December 31, 2020.

Term Asset-Backed Securities Loan Facility
On March 22, 2020, the Board approved the establishment of the Term Asset-Backed Securities
Loan Facility (TALF) to help meet the credit needs of consumers and small businesses by enabling
the issuance of asset-backed securities (ABS) and improving the market conditions for ABS more
generally.100 The TALF facilitated the issuance of ABS backed by student loans, auto loans, credit
card loans, SBA-guaranteed loans, and certain other assets. The Treasury, using the ESF, committed to make an equity investment in the SPV established for this facility.
On April 8, 2020, the Board approved changes to broaden the range of assets eligible as collateral
for the TALF to include the triple-A rated tranches of both outstanding commercial mortgagebacked securities and newly issued collateralized loan obligations.101
On May 12, 2020, the Board approved changes to the TALF (1) to reflect that the Treasury would
use CARES Act funding to make the $10 billion equity investment in the SPV established for the
TALF, (2) to implement certain restrictions and limitations required by the CARES Act, and (3) to
update information regarding borrower and collateral eligibility criteria.102
On July 22, 2020, the Board approved an expansion of eligible counterparties for the TALF.103
On July 27, 2020, the Board approved an extension of the termination date for the TALF from
September 30 to December 31, 2020.104 Note: The TALF ceased extending credit on
December 31, 2020.

See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200723a.htm.
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200728a.htm.
100
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200323b.htm.
101
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200409a.htm.
102
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200512a.htm.
103
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200723a.htm.
104
See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200728a.htm.
99

200 107th Annual Report | 2020

Discount Rates for Depository Institutions in 2020
Under the Federal Reserve Act, the boards of directors of the Federal Reserve Banks must establish rates on discount window loans to depository institutions at least every 14 days, subject to
review and determination by the Board of Governors. Periodically, the Board considers proposals
by the 12 Reserve Banks to establish the primary credit rate and approves proposals to maintain
the formulas for computing the secondary and seasonal credit rates.

Primary, Secondary, and Seasonal Credit
Primary credit, the Federal Reserve’s main lending program for depository institutions, is extended
at the primary credit rate. It is made available, with minimal administration, as a source of liquidity
to depository institutions that, in the judgment of the lending Federal Reserve Bank, are in generally sound financial condition. During 2020, the Board approved two decreases in the primary
credit rate, bringing the rate from 2¼ percent to ¼ percent and narrowing the spread of the primary credit rate to the top of the target range for the federal funds rate from ½ percent to 0 percent.
The Board reached these determinations on the primary credit rate recommendations of the
Reserve Bank boards of directors. The Board’s actions were taken in conjunction with the FOMC’s
decisions to lower the target range for the federal funds rate by 1½ percentage points, to 0 percent to ¼ percent. Monetary policy developments are reviewed more fully in other parts of this
report (see section 2, “Monetary Policy and Economic Developments”).
Concurrent with the second primary credit rate decrease on March 15, 2020, the Board
announced that depository institutions may borrow primary credit for periods as long as 90 days,
prepayable and renewable by the borrower on a daily basis. Collectively, the changes to the
offering rate and other terms of primary credit reflected broader efforts by the Federal Reserve to
encourage discount window use to support the smooth flow of credit to households and businesses during the COVID event.105
Secondary credit is available in appropriate circumstances to depository institutions that do not
qualify for primary credit. The secondary credit rate is set at a spread above the primary credit
rate. Throughout 2020, the spread was set at 50 basis points. At year-end, the secondary credit
rate was ¾ percent.
Seasonal credit is available to smaller depository institutions to meet liquidity needs that arise
from regular swings in their loans and deposits. The rate on seasonal credit is calculated every
two weeks as an average of selected money market yields, typically resulting in a rate close to the

105

See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200315b.htm.

Record of Policy Actions of the Board of Governors 201

target range for the federal funds rate. At year-end, the seasonal credit rate was 0.15 percent (see
table E.1).106
Table E.1. Federal Reserve Bank interest rates on loans to depository institutions, December 31, 2020
Percent

Reserve Bank
All banks

Primary credit

Secondary credit

Seasonal credit

0.25

0.75

0.15

Note: Primary credit is available for very short terms as a backup source of liquidity to depository institutions that are in generally sound financial condition in the judgment of the lending Federal Reserve Bank. Secondary credit is available in appropriate circumstances to depository
institutions that do not qualify for primary credit. Seasonal credit is available to help relatively small depository institutions meet regular seasonal needs for funds that arise from a clear pattern of intra-yearly movements in their deposits and loans. The discount rate on seasonal
credit takes into account rates charged by market sources of funds and is reestablished on the first business day of each two-week reserve
maintenance period.

Votes on Changes to Discount Rates for Depository Institutions
Details on the two actions by the Board to approve decreases in the primary credit rate are provided below.
March 3, 2020. Effective March 4, 2020, the Board approved actions taken by the boards of directors of the Federal Reserve Banks of New York and Minneapolis to decrease the primary credit
rate from 2¼ percent to 1¾ percent. On March 4, 2020, the Board approved identical actions
subsequently taken by the boards of directors of the Federal Reserve Banks of Boston, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Kansas City, Dallas, and San Francisco,
effective immediately.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.
March 15, 2020. Effective March 16, 2020, the Board approved actions taken by the boards of
directors of the Federal Reserve Banks of New York and Minneapolis to decrease the primary
credit rate from 1¾ percent to ¼ percent. On March 16, 2020, the Board approved identical
actions subsequently taken by the boards of directors of the Federal Reserve Banks of Boston,
Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Kansas City, Dallas, and San Francisco, effective immediately.
Voting for this action: Chair Powell, Vice Chair Clarida, Vice Chair for Supervision Quarles,
and Governors Brainard and Bowman.

106

For current and historical discount rates, see https://www.frbdiscountwindow.org/.

202 107th Annual Report | 2020

The Board of Governors and the Government Performance
and Results Act
Overview
The Government Performance and Results Act (GPRA) of 1993 requires federal agencies to prepare a strategic plan covering a multiyear period and to submit an annual performance plan and
an annual performance report. Although the Board is not covered by GPRA, the Board voluntarily
complies with the spirit of the act and, like other federal agencies, publicly publishes a multiyear
Strategic Plan, as well as an Annual Performance Plan and an Annual Performance Report.107

Strategic Plan, Performance Plan, and Performance Report
On December 27, 2019, the Board published the Strategic Plan 2020–23, which outlines the organization’s priorities across five functional areas—Monetary Policy and Financial Stability, Supervision, Payment System and Reserve Bank Oversight, Public Engagement and Community Development, and Mission Enablement—for maintaining the stability, integrity, and efficiency of the
nation’s monetary, financial, and payments systems. In formulating the Strategic Plan 2020–23,
the Board identified and prioritized the goals and objectives paramount to advancing the organization’s mission while allowing for appropriate flexibility to respond to emerging and evolving challenges.
The Annual Performance Plan sets forth the projects and initiatives in support of the Board’s current Strategic Plan’s goals and objectives during a one-year period. The Annual Performance Plan
helps the organization identify and prioritize investments and dedicate sufficient resources across
the five functions to meet its congressional mandate, while maintaining ongoing operations.
The Annual Performance Report summarizes the Board’s accomplishments throughout the performance year that contributed toward achieving the goals and objectives identified in that year’s
Annual Performance Plan. The Annual Performance Report provides transparency into the organization’s activities and helps the Board to communicate the continued fulfillment of its dual mandate
to the U.S. Congress and the public.
Ultimately, the organization’s planning and reporting processes enable the Board to identify, prioritize, and progress those activities most critical to advancing its mission.

107

The Strategic Plan, Annual Performance Plan, and Annual Performance Report are available on the Federal Reserve
Board’s website at https://www.federalreserve.gov/publications/gpra.htm.

203

Litigation

During 2020, the Board of Governors was a party in 6 lawsuits or appeals filed that year and was
a party in 7 other cases pending from previous years, for a total of 13 cases. In 2019, the Board
had been a party in a total of 13 cases. As of December 31, 2020, five cases were pending.

Pending
Baylor v. Powell, No. 20-5176 (D.C. Circuit, filed June 22, 2020), is an appeal of an order granting
summary judgment to the Board in an employment discrimination case.
Center for Biological Diversity v. Department of Treasury and Board of Governors, No. 20-cv-1322
(D. District of Columbia, filed May 19, 2020), is an action under the Freedom of Information Act.
Center for Popular Democracy v. Board of Governors, No. 16-cv-05829 (E.D. New York, filed
October 19, 2016), is an action under the Freedom of Information Act.
Fruge v. Board of Governors, No. 20-cv-2811 (D. District of Columbia, filed October 2, 2020), is an
action claiming retaliation for protected disclosures.
Junk v. Board of Governors, No. 19-3125 (2d Circuit, filed September 27, 2019), is an appeal
under the Freedom of Information Act.

Resolved
Baylor v. Powell, No. 17-cv-02647 (D. District of Columbia, filed December 11, 2017), was an
employment discrimination case. On April 29, 2020, the court granted the Board’s motion for summary judgment.
BBX v. Board of Governors, No. 19-11172 (11th Circuit, filed March 25, 2019), was an appeal of
an order granting summary judgment to the Board and the Federal Deposit Insurance Corporation
in an action relating to golden-parachute payments. On April 7, 2020, the court of appeals
affirmed the district court’s judgment.
Board of Governors v. Allen, No. 20-ap-1041 (N.D. Mississippi bankruptcy, filed August 14, 2020),
was an adversary bankruptcy proceeding regarding non-dischargeability of debt arising from a

204 107th Annual Report | 2020

Board enforcement proceeding. On September 16, 2020, the parties entered into a consent judgment.
Food & Water Watch v. Board of Governors, No. 20-cv-01840 (D. District of Columbia, filed July 8,
2020), was an action under the Freedom of Information Act. On September 18, 2020, the plaintiff
voluntarily dismissed the case.
Gilberti v. Board of Governors, et al., No. 19-5264 (D.C. Circuit, filed November 6, 2019), was an
appeal of an order dismissing the Board and various other defendants from a pro se action
alleging conspiracy. On March 3, 2020, the court of appeals affirmed the dismissal.
Goldstein v. Board of Governors, No. 20-cv-84 (D. District of Columbia, filed January 13, 2020), was
an action under the Freedom of Information Act. On February 18, 2020, the plaintiff voluntarily dismissed the case.
Morley v. Board of Governors, No. 19-cv-00797 (D. District of Columbia, filed March 21, 2019), was
an action under the Freedom of Information Act. On July 27, 2020, the parties filed a joint stipulation of dismissal.
Richardson v. Powell, No. 19-5119 (D.C. Circuit, filed April 22, 2019), was an appeal of an order
granting summary judgment to the Board in an employment discrimination case. On February 27,
2020, the court of appeals affirmed the judgment.

205

Statistical Tables

This appendix includes 13 statistical tables that provide updated historical data concerning Board and
System operations and activities.
Table G.1. Federal Reserve open market transactions, 2020
Millions of dollars

Type of security and
transaction
U.S. Treasury securities

Jan.

Feb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Total

Outright transactions2
Treasury bills
Gross purchases
Gross sales
Exchanges
For new bills
Redemptions

70,510

55,508

30,501

156,519

20,631

23,972

36,002

71,566

75,388

71,474

96,395

74,346

69,755

88,347

80,456

98,073

806,405

20,631

23,972

36,002

71,566

75,388

71,474

96,395

74,346

69,755

88,347

80,456

98,073

806,405

2,101

2,189

105,183

89,473

27,968

14,131

14,984

12,752

6,764

6,477

5,602

4,883

292,507

-17,675

-37,357

-33,959

-14,078

-50,769

-39,445

-30,520

-82,250

-30,315

-3,077

-84,588

-37,737

-461,770

10,025

7,592

383,863

293,171

53,103

43,227

45,673

36,509

22,200

41,357

45,979

47,705

1,030,404

Others up to 1 year
Gross purchases
Gross sales
Exchanges
Redemptions
Over 1 to 5 years
Gross purchases
Gross sales
Exchanges

11,645

16,900

23,169

10,900

22,212

24,740

17,786

37,322

16,431

1,455

44,806

22,468

249,833

5,020

3,285

184,985

165,619

32,639

19,626

17,529

18,717

23,642

14,887

13,259

9,105

508,313

5,518

12,008

10,775

3,122

16,923

10,009

9,135

26,684

9,927

979

26,299

10,595

141,974

2,259

3,942

139,021

98,482

17,528

12,811

12,220

10,293

11,797

14,225

12,235

18,315

353,128

512

8,450

11,635

4,695

3,599

18,244

3,957

643

13,483

4,674

69,963

Over 5 to 10 years
Gross purchases
Gross sales
Exchanges
More than 10 years
Gross purchases
Gross sales
Exchanges
All maturities
Gross purchases

89,915

72,516

843,553

646,745

131,238

89,795

90,406

78,271

64,403

76,946

77,075

80,008

2,340,871

Gross sales

Redemptions

89,915

72,516

843,553

646,745

131,238

89,770

90,406

78,271

64,403

76,946

77,050

80,008

2,340,821

Net change in U.S.
Treasury securities

(continued)

206 107th Annual Report | 2020

Table G.1. —continued
Type of security and
transaction

Jan.

Feb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Total

Federal agency obligations
Outright transactions2
Gross purchases

Gross sales

Redemptions

-21,388

-15,446

85,579

147,299

230,506

76,152

22,088

15,769

33,541

17,547

3,300

35,845

630,792

68,527

57,070

929,132

794,044

361,744

165,922

112,494

94,040

97,944

94,493

80,350

115,853

2,971,613

Repurchase agreements5

206,689

159,187

307,321

189,297

173,961

128,789

7,914

143

1,003

1,000

n/a

Reverse repurchase
agreements5

259,010

227,773

292,931

320,440

261,714

232,846

220,673

214,867

204,553

195,051

194,215

194,974

n/a

Foreign official and
international accounts

254,996

225,463

242,447

277,609

259,615

232,433

220,652

214,839

204,443

195,039

194,077

194,367

n/a

4,014

2,311

50,484

42,832

2,098

413

110

137

607

n/a

Net change in federal
agency obligations
Mortgage-backed securities

Net settlements2
Net change in mortgagebacked securities
Total net change in
securities holdings4
Temporary transactions

Others

Note: Purchases of Treasury securities and federal agency obligations increase securities holdings; sales and redemptions of these securities decrease
securities holdings. Exchanges occur when the Federal Reserve rolls the proceeds of maturing securities into newly issued securities, and so exchanges
do not affect total securities holdings. Positive net settlements of mortgage-backed securities increase securities holdings, while negative net settlements of these securities decrease securities holdings. Components may not sum to totals because of rounding. See table 2 of the H.4.1 release
(https://www.federalreserve.gov/releases/h41/) for the maturity distribution of the securities.
1
Transactions exclude changes in compensation for the effects of inflation on the principal of inflation-indexed securities. Transactions include the
rollover of inflation compensation into new securities. The maturity distributions of exchanged Treasury securities are based on the announced maturity of new securities rather than actual day counts.
2
Excludes the effect of temporary transactions—repurchase agreements and reverse repurchase agreements.
3
Guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae. Monthly net change in the remaining principal balance of the securities, reported at face
value.
4
The net change in securities holdings reflects the settlements of purchases, reinvestments, sales, and maturities of portfolio securities.
5
Averages of daily business cash value of agreements, which are collateralized by U.S. Treasury securities, federal agency debt securities, and
mortgage-backed securities. For additional details on temporary transactions, see the temporary open market operations historical search available
at https://apps.newyorkfed.org/markets/autorates/tomo-search-page.
n/a Not applicable.

Statistical Tables 207

Table G.2. Federal Reserve Bank holdings of U.S. Treasury and federal agency securities,
December 31, 2018–20
Millions of dollars

Description

December 31

Change

2020

2019

2018

2019–20

2018–19

4,688,929

2,328,933

2,222,547

2,359,996

106,386

U.S. Treasury securities
Held outright2
By remaining maturity
Bills
1–90 days

191,154

51,763

—

139,391

51,763

91 days to 1 year

134,890

117,762

—

17,128

117,762

708,144

303,438

384,936

404,706

(81,498)

1,759,737

893,832

958,065

865,905

(64,233)

836,893

321,591

260,898

515,302

60,693

1,058,111

640,547

618,648

417,564

21,899

Notes and bonds
1 year or less
More than 1 year through 5 years
More than 5 years through 10 years
More than 10 years
By type
Bills

326,044

169,525

—

156,519

169,525

Notes

3,063,037

1,290,107

1,382,654

1,772,930

(92,547)

Bonds

1,299,848

869,301

839,893

430,547

29,408

2,347

2,409

—

(62)

1–90 days

—

91 days to 1 year

—

(62)

Federal agency securities1
Held outright2
By remaining maturity
Discount notes

Coupons
1 year or less
More than 1 year through 5 years
More than 5 years through 10 years
More than 10 years

—

1,818

486

—

1,332

486

529

1,861

2,347

(1,332)

(486)

By type
Discount notes
Coupons

—

2,347

2,409

—

(62)

529

591

—

(62)

1,818

—

By issuer
Federal Home Loan Mortgage Corporation
Federal National Mortgage Association
Federal Home Loan Banks

(continued)

208 107th Annual Report | 2020

Table G.2. —continued
December 31

Description

Change

2020

2019

2018

2019–20

2018–19

2,039,467

1,408,677

1,637,123

630,790

(228,446)

Mortgage-backed securities3, 4
Held outright2
By remaining maturity
1 year or less
More than 1 year through 5 years
More than 5 years through 10 years

(8)

2,016

1,135

214

881

921

72,044

73,528

62,706

(1,484)

10,822

1,965,403

1,334,002

1,574,199

631,401

(240,197)

Federal Home Loan Mortgage Corporation

667,007

422,087

481,436

244,920

(59,349)

Federal National Mortgage Association

888,260

652,729

761,166

235,531

(108,437)

Government National Mortgage Association

484,200

333,861

394,521

150,339

(60,660)

1,000

255,619

—

(254,619)

255,619

216,051

336,649

304,012

(120,598)

32,637

206,400

272,562

262,164

(66,162)

10,398

9,651

64,087

41,848

(54,436)

22,239

More than 10 years
By issuer

Temporary transactions

Repurchase agreements6
6

Reverse repurchase agreements

Foreign official and international accounts
Primary dealers and expanded counterparties

Note: Components may not sum to totals because of rounding.
1
Par value.
2
Excludes the effect of temporary transactions—repurchase agreements and reverse repurchase agreements.
3
Guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae.
4
The par amount shown is the remaining principal balance of the securities.
5
Contract amount of agreements.
6
Cash value of agreements, which are collateralized by U.S. Treasury securities, federal agency debt securities, and mortgage-backed securities.

Statistical Tables 209

Table G.3. Reserve requirements of depository
institutions, December 31, 2020
Requirement
Liability type1

Percentage
of liabilities

Effective
date

Net transaction accounts

3/26/2020

Nonpersonal time deposits

12/27/1990

Eurocurrency liabilities

12/27/1990

Note: The table reflects the liability types and percentages of those
liabilities subject to requirements for the maintenance period that
contains the year end.
1
For a description of these deposit types, see Form FR 2900.

210 107th Annual Report | 2020

Table G.4. Banking offices and banks affiliated with bank holding companies in the United States,
December 31, 2019 and 2020
Commercial banks1
Type of office

Total

Member
Total

National

State

Nonmember

Savings
banks

All banking offices
Banks
Number, Dec. 31, 2019

4,753

4,516

1,508

777

731

3,008

237

-145

-142

-45

-17

-28

-97

-3

-22

-20

-3

-1

-2

-17

-2

Changes during 2020
New banks
Banks converted into branches
Ceased banking operations2
3

Other

-5

-1

-2

-153

-148

-42

-20

-22

-106

-5

4,600

4,368

1,466

757

709

2,902

232

77,937

75,660

51,209

39,189

12,020

24,451

2,277

New branches

983

935

582

419

163

353

Banks converted to branches

145

137

-3,026

-3,004

-2,311

-1,937

-374

-693

-22

351

169

182

-351

Net change
Number, Dec. 31, 2020
Branches and additional offices
Number, Dec. 31, 2019
Changes during 2020

Discontinued

Other3
Net change
Number, Dec. 31, 2020

-1,898

-1,932

-1,313

-1,322

-619

76,039

73,728

49,896

37,867

12,029

23,832

2,311

4,026

3,906

1,369

689

680

2,537

120

-134

-132

-43

-16

-27

-89

-2

-24

-22

-4

-1

−3

-18

-2

Banks affiliated with bank holding companies
Number, Dec. 31, 2019
Changes during 2019
BHC-affiliated new banks
Banks converted into branches
Ceased banking operations2
3

Other

Net change
Number, Dec. 31, 2020

-5

-1

-2

-122

-119

-37

-18

-19

-82

-3

3,904

3,787

1,332

671

661

2,455

117

Note: Includes banks, banking offices, and bank holding companies in U.S. territories and possessions (affiliated insular areas).
1
For purposes of this table, banks are entities that are defined as banks in the Bank Holding Company Act, as amended, which is implemented by
Federal Reserve Regulation Y. Generally, a bank is any institution that accepts demand deposits and is engaged in the business of making commercial loans or any institution that is defined as an insured bank in section 3(h) of the Federal Deposit Insurance Corporation Act.
2
Institutions that no longer meet the Regulation Y definition of a bank.
3
Interclass changes and sales of branches.

Statistical Tables 211

Table G.5A. Reserves of depository institutions, Federal Reserve Bank credit, and related items, year-end
1984–2020 and month-end 2020
Millions of dollars

Factors supplying reserve funds
Federal Reserve Bank credit outstanding
Period
Securities held Repurchase
outright1
agreements2
1984

167,612

1985
1986

Loans and
other credit
extensions3

2,015

3,577

186,025

5,223

205,454

16,005

1987

226,459

4,961

1988

240,628

6,861

1989

233,300

1990

241,431

1991

272,531

15,898

1992

300,423

8,094

1993

336,654

13,212

1994

368,156

10,590

1995

380,831

13,862

1996

393,132

21,583

1997

431,420

23,840

1998

452,478

30,376

1999

478,144

2000

511,833

2001
2002

Float

Other Federal
Reserve
assets4

Total4

Gold stock

Special
Treasury
drawing rights
currency
certificate
outstanding5
account

833

12,347

186,384

11,096

4,618

16,418

3,060

988

15,302

210,598

11,090

4,718

17,075

1,565

1,261

17,475

241,760

11,084

5,018

17,567

3,815

811

15,837

251,883

11,078

5,018

18,177

2,170

1,286

18,803

269,748

11,060

5,018

18,799

2,117

481

1,093

39,631

276,622

11,059

8,518

19,628

18,354

190

2,222

39,897

302,091

11,058

10,018

20,402

218

731

34,567

323,945

11,059

10,018

21,014

675

3,253

30,020

342,464

11,056

8,018

21,447

909

33,035

383,904

11,053

8,018

22,095

223

-716

33,634

411,887

11,051

8,018

22,994

135

107

33,303

428,239

11,050

10,168

24,003

4,296

32,896

451,992

11,048

9,718

24,966

2,035

719

31,452

489,466

11,047

9,200

25,543

1,636

36,966

521,475

11,046

9,200

26,270

140,640

233

-237

35,321

654,100

11,048

6,200

28,013

43,375

110

901

36,467

592,686

11,046

2,200

31,643

551,685

50,250

-23

37,658

639,604

11,045

2,200

33,017

629,416

39,500

418

39,083

708,457

11,043

2,200

34,597

2003

666,665

43,750

-319

40,847

751,005

11,043

2,200

35,468

2004

717,819

33,000

925

42,219

794,007

11,045

2,200

36,434

2005

744,215

46,750

885

39,611

831,532

11,043

2,200

36,540

2006

778,915

40,750

-333

39,895

859,294

11,041

2,200

38,206

2007

740,611

46,500

72,636

-19

41,799

901,528

11,041

2,200

38,681

2008

495,629

80,000

1,605,848

-1,494

43,553

2,223,537

11,041

2,200

38,674

2009

1,844,838

281,095

-2,097

92,811

2,216,647

11,041

5,200

42,691

2010

2,161,094

138,311

-1,421

110,255

2,408,240

11,041

5,200

43,542

2011

2,605,124

144,098

-631

152,568

2,901,159

11,041

5,200

44,198

2012

2,669,589

11,867

-486

218,296

2,899,266

11,041

5,200

44,751

2013

3,756,158

2,177

-962

246,947

4,004,320

11,041

5,200

45,493

2014

4,236,873

3,351

-555

239,238

4,478,908

11,041

5,200

46,301

2015

4,241,958

2,830

-36

221,448

4,466,199

11,041

5,200

47,567
(continued)

212 107th Annual Report | 2020

Table G.5A.—continued
Factors supplying reserve funds
Federal Reserve Bank credit outstanding
Period
Securities held Repurchase
outright1
agreements2

Loans and
other credit
extensions3

Float

Other Federal
Reserve
assets4

Total4

Gold stock

Special
Treasury
drawing rights
currency
certificate
outstanding5
account

2016

4,221,187

7,325

-804

206,551

4,434,259

11,041

5,200

48,536

2017

4,223,528

13,914

-920

194,288

4,430,809

11,041

5,200

49,381

2018

3,862,079

4,269

-770

173,324

4,038,902

11,041

5,200

49,801

2019

3,739,957

255,619

3,770

-643

156,304

4,155,007

11,041

5,200

50,138

2020

6,730,743

1,000

216,669

-567

393,420

7,341,265

11,041

5,200

50,535

2020, month-end
Jan.

3,801,137

170,452

-403

159,556

4,130,796

11,041

5,200

50,176

Feb.

3,863,237

126,240

-396

149,949

4,139,102

11,041

5,200

50,197

Mar.

4,727,376

262,725

493,024

-654

242,177

5,724,648

11,041

5,200

50,219

Apr.

5,585,514

168,351

570,726

-958

335,293

6,658,926

11,041

5,200

50,289

May

5,955,510

182,450

616,671

-652

350,450

7,104,429

11,041

5,200

50,345

Jun.

6,124,273

57,952

442,996

-730

362,982

6,987,473

11,041

5,200

50,401

Jul.

6,231,109

313,615

-384

376,797

6,921,137

11,041

5,200

50,454

Aug.

6,327,578

289,636

-615

370,694

6,987,294

11,041

5,200

50,382

Sep.

6,430,599

1,000

223,879

-1,329

382,865

7,037,014

11,041

5,200

50,411

Oct.

6,531,692

1,000

202,492

-383

395,928

7,130,729

11,041

5,200

50,425

Nov.

6,612,639

1,000

198,157

-546

384,575

7,195,825

11,041

5,200

50,500

Dec.

6,730,743

1,000

216,669

-567

393,420

7,341,265

11,041

5,200

50,535

Note: Components may not sum to totals because of rounding.
1
Includes U.S. Treasury securities, federal agency debt securities, and mortgage-backed securities. U.S. Treasury securities and federal agency debt
securities include securities lent to dealers, which are fully collateralized by U.S. Treasury securities, federal agency securities, and other highly rated
debt securities.
2
Cash value of agreements, which are collateralized by U.S. Treasury securities, federal agency debt securities, and agency mortgage-backed
securities.
3
From 2015–19, includes only central bank liquidity swaps; primary, seasonal, and secondary credit; and net portfolio holdings of Maiden Lane LLC.
For disaggregated loans and other credit extensions from 1984–2014, refer to “Table 6B. Loans and other credit extensions, by type, year-end
1984–2014 and month-end 2014” of the 2014 Annual Report. As of 2020, includes only central bank liquidity swaps; primary, seasonal, and secondary credit; Primary Dealer Credit Facility; Money Market Mutual Fund Liquidity Facility; Paycheck Protection Program Liquidity Facility; and net
portfolio holdings of Commercial Paper Funding Facility II LLC, Corporate Credit Facilities LLC, MS Facilities LLC (Main Street Lending Program),
Municipal Facility LLC, and Term Asset-Backed Securities Loan Facility II LLC.
4
As of 2013, unamortized discounts on securities held outright are included as a component of Other Federal Reserve assets. Previously, they were
included in Other Federal Reserve liabilities and capital.
5
Includes currency and coin (other than gold) issued directly by the U.S. Treasury. The largest components are fractional and dollar coins. For details,
refer to “U.S. Currency and Coin Outstanding and in Circulation,” Treasury Bulletin.

Statistical Tables 213

Table G.5A.—continued
Millions of dollars

Factors absorbing reserve funds

Period

Currency in
circulation

Reverse
repurchase
agreements6

Treasury
cash
holdings7

Deposits with Federal Reserve Banks,
other than reserve balances
Term
deposits

Treasury
Treasury
supplementary
general
financing
account
account

Foreign

Other8

Reserve
Other
balances
Federal
with
Required
Reserve
Federal
clearing
liabilities Reserve
balances9
and
Banks
capital4,10

1984

183,796

513

n/a

5,316

n/a

253

867

1,126

5,952

20,693

1985

197,488

550

n/a

9,351

n/a

480

1,041

1,490

5,940

27,141

1986

211,995

447

n/a

7,588

n/a

287

917

1,812

6,088

46,295

1987

230,205

454

n/a

5,313

n/a

244

1,027

1,687

7,129

40,097

1988

247,649

395

n/a

8,656

n/a

347

548

1,605

7,683

37,742

1989

260,456

450

n/a

6,217

n/a

589

1,298

1,618

8,486

36,713

1990

286,963

561

n/a

8,960

n/a

369

528

1,960

8,147

36,081

1991

307,756

636

n/a

17,697

n/a

968

1,869

3,946

8,113

25,051

1992

334,701

508

n/a

7,492

n/a

206

653

5,897

7,984

25,544

1993

365,271

377

n/a

14,809

n/a

386

636

6,332

9,292

27,967

1994

403,843

335

n/a

7,161

n/a

250

1,143

4,196

11,959

25,061

1995

424,244

270

n/a

5,979

n/a

386

2,113

5,167

12,342

22,960

1996

450,648

249

n/a

7,742

n/a

167

1,178

6,601

13,829

17,310

1997

482,327

225

n/a

5,444

n/a

457

1,171

6,684

15,500

23,447

1998

517,484

n/a

6,086

n/a

167

1,869

6,780

16,354

19,164

1999

628,359

109

n/a

28,402

n/a

1,644

7,481

17,256

16,039

2000

593,694

450

n/a

5,149

n/a

216

2,478

6,332

17,962

11,295

2001

643,301

425

n/a

6,645

n/a

1,356

8,525

17,083

8,469

2002

687,518

21,091

367

n/a

4,420

n/a

136

1,266

10,534

18,977

11,988

2003

724,187

25,652

321

n/a

5,723

n/a

162

995

11,829

19,793

11,054

2004

754,877

30,783

270

n/a

5,912

n/a

1,285

9,963

26,378

14,137

2005

794,014

30,505

202

n/a

4,573

n/a

2,144

8,651

30,466

10,678

2006

820,176

29,615

252

n/a

4,708

n/a

972

6,842

36,231

11,847

2007

828,938

43,985

259

n/a

16,120

n/a

1,830

6,614

41,622

13,986

2008

889,898

88,352

259

n/a

106,123

259,325

1,365

21,221

4,387

48,921

855,599

2009

928,249

77,732

239

n/a

186,632

5,001

2,411

35,262

3,020

63,219

973,814

2010

982,750

59,703

177

140,773

199,964

3,337

13,631

2,374

99,602

965,712

2011

1,075,820

99,900

128

85,737

125

64,909

2,480

72,766

1,559,731

2012

1,169,159

107,188

150

92,720

6,427

27,476

n/a

66,093

1,491,044

2013

1,241,228

315,924

234

162,399

7,970

26,181

n/a

63,049

2,249,070

2014

1,342,957

509,837

201

223,452

5,242

20,320

n/a

61,447

2,377,995

2015

1,424,967

712,401

266

333,447

5,231

31,212

n/a

45,320

1,977,163
(continued)

214 107th Annual Report | 2020

Table G.5A.—continued
Factors absorbing reserve funds
Deposits with Federal Reserve Banks,
other than reserve balances

Currency in
circulation

Reverse
repurchase
agreements6

Treasury
cash
holdings7

2016

1,509,440

725,210

166

399,190

2017

1,618,006

563,958

214

228,933

2018

1,719,302

304,012

214

2019

1,807,740

336,649

171

2020

2,089,224

216,051

Period

Term
deposits

Treasury
Treasury
supplementary
general
financing
account
account

Reserve
Other
balances
Federal
with
Required
Reserve
Federal
clearing
liabilities Reserve
balances9
and
Banks
capital4,10

Foreign

Other8

5,165

53,248

n/a

46,943

1,759,675

5,257

77,762

n/a

47,876

1,954,426

402,138

5,245

73,073

n/a

45,007

1,555,954

403,853

5,182

74,075

n/a

44,867

1,548,849

1,728,569

21,838

194,327

n/a

49,075

2,994,932

2020, month-end
Jan.

1,791,721

247,578

218

403,983

5,182

62,622

n/a

43,484

1,642,425

Feb.

1,801,222

228,944

287

357,251

5,187

77,563

n/a

44,156

1,690,931

Mar.

1,878,734

569,082

328

515,257

17,395

280,772

n/a

55,259

2,474,282

Apr.

1,911,867

279,813

301

1,180,035

16,351

203,242

n/a

63,655

3,070,191

May

1,948,861

257,920

207

1,449,129

16,278

168,672

n/a

48,298

3,215,150

Jun.

1,970,172

232,957

1,722,032

16,223

164,703

n/a

46,928

2,787,035

Jul.

1,995,243

226,178

1,763,090

16,229

136,719

n/a

47,290

2,689,036

Aug.

2,017,111

221,435

1,705,982

16,620

145,873

n/a

47,791

2,785,042

Sep.

2,032,544

205,233

1,781,679

18,916

160,477

n/a

47,545

2,743,246

Oct.

2,045,796

204,912

1,598,798

21,251

183,348

n/a

47,997

2,981,246

Nov.

2,067,346

191,550

1,622,986

21,284

165,736

n/a

49,737

3,029,883

Dec.

2,089,224

216,051

1,728,569

21,838

194,327

n/a

49,075

2,994,932

Cash value of agreements, which are collaterized by U.S. Treasury securities, federal agency debt securities, and agency mortgage-backed securities.
Coin and paper currency held by the Treasury.
8
As of 2014, includes deposits of designated financial market utilities.
9
Required clearing balances were discontinued in July 2012.
10
In 2010, includes funds from American International Group, Inc. asset dispositions, held as agent. In 2020, includes equity investments in
Commercial Paper Funding Facility II LLC, Corporate Credit Facilities LLC, MS Facilities LLC (Main Street Lending Program), Municipal Facility LLC,
and Term Asset-Backed Securities Loan Facility II LLC.
n/a Not applicable.
7

Statistical Tables 215

Table G.5B. Reserves of depository institutions, Federal Reserve Bank credit, and related items, year-end
1918–1983
Millions of dollars

Factors supplying reserve funds
Period

Securities
held
outright1

Federal Reserve Bank credit outstanding
Other
Repurchase
All
Federal
3
Loans
Float
agreements2
other4
Reserve
assets5
0
1,766
199
294
0

Total

Gold
stock6

Special
drawing
rights
certificate
account

Treasury
currency
outstanding7

1918

239

2,498

2,873

n/a

1,795

1919
1920

300
287

0
0

2,215
2,687

201
119

575
262

0
0

3,292
3,355

2,707
2,639

n/a
n/a

1,707
1,709

1921
1922

234
436

0
0

1,144
618

40
78

146
273

0
0

1,563
1,405

3,373
3,642

n/a
n/a

1,842
1,958

1923
1924

80
536

54
4

723
320

27
52

355
390

0
0

1,238
1,302

3,957
4,212

n/a
n/a

2,009
2,025

1925

367

643

378

1,459

4,112

n/a

1,977

1926
1927

312
560

3
57

637
582

45
63

384
393

0
0

1,381
1,655

4,205
4,092

n/a
n/a

1,991
2,006

1928
1929

197
488

31
23

1,056
632

24
34

500
405

0
0

1,809
1,583

3,854
3,997

n/a
n/a

2,012
2,022

1930
1931

686
775

43
42

251
638

21
20

372
378

0
0

1,373
1,853

4,306
4,173

n/a
n/a

2,027
2,035

1932
1933

1,851
2,435

4
2

235
98

14
15

41
137

0
0

2,145
2,688

4,226
4,036

n/a
n/a

2,204
2,303

1934
1935

2,430
2,430

0
1

7
5

5
12

21
38

0
0

2,463
2,486

8,238
10,125

n/a
n/a

2,511
2,476

1936

2,430

2,500

11,258

n/a

2,532

1937
1938

2,564
2,564

0
0

10
4

19
17

19
16

0
0

2,612
2,601

12,760
14,512

n/a
n/a

2,637
2,798

1939
1940

2,484
2,184

0
0

7
3

91
80

11
8

0
0

2,593
2,274

17,644
21,995

n/a
n/a

2,963
3,087

1941
1942

2,254
6,189

0
0

3
6

94
471

10
14

0
0

2,361
6,679

22,737
22,726

n/a
n/a

3,247
3,648

1943
1944

11,543
18,846

0
0

5
80

681
815

10
4

0
0

12,239
19,745

21,938
20,619

n/a
n/a

4,094
4,131

1945
1946

24,262
23,350

0
0

249
163

578
580

2
1

0
0

25,091
24,093

20,065
20,529

n/a
n/a

4,339
4,562

1947

22,559

535

23,181

22,754

n/a

4,562

1948
1949

23,333
18,885

0
0

223
78

541
534

1
2

0
0

24,097
19,499

24,244
24,427

n/a
n/a

4,589
4,598

1950
1951

20,725
23,605

53
196

67
19

1,368
1,184

3
5

0
0

22,216
25,009

22,706
22,695

n/a
n/a

4,636
4,709

1952
1953

24,034
25,318

663
598

156
28

967
935

4
2

0
0

25,825
26,880

23,187
22,030

n/a
n/a

4,812
4,894

1954
1955

24,888
24,391

44
394

143
108

808
1,585

1
29

0
0

25,885
26,507

21,713
21,690

n/a
n/a

4,985
5,008

1956
1957

24,610
23,719

305
519

50
55

1,665
1,424

70
66

0
0

26,699
25,784

21,949
22,781

n/a
n/a

5,066
5,146

1958

26,252

1,296

27,755

20,534

n/a

5,234
(continued)

216 107th Annual Report | 2020

Table G.5B.—continued
Factors supplying reserve funds
Period

Securities
held
outright1

Federal Reserve Bank credit outstanding
Other
Repurchase
All
Federal
3
Loans Float
agreements2
other4
Reserve
assets5
41
458
1,590
75
0
400
33
1,847
74
0

Special
drawing
rights
certificate
account

Treasury
currency
outstanding7

Total

Gold
stock6

28,771
29,338

19,456
17,767

n/a
n/a

5,311
5,398

1959
1960

26,607
26,984

1961
1962

28,722
30,478

159
342

130
38

2,300
2,903

51
110

0
0

31,362
33,871

16,889
15,978

n/a
n/a

5,585
5,567

1963
1964

33,582
36,506

11
538

63
186

2,600
2,606

162
94

0
0

36,418
39,930

15,513
15,388

n/a
n/a

5,578
5,405

1965

40,478

290

137

2,248

187

43,340

13,733

n/a

5,575

1966
1967

43,655
48,980

661
170

173
141

2,495
2,576

193
164

0
0

47,177
52,031

13,159
11,982

n/a
n/a

6,317
6,784

1968
1969

52,937
57,154

0
0

186
183

3,443
3,440

58
64

0
2,743

56,624
63,584

10,367
10,367

n/a
n/a

6,795
6,852

1970
1971

62,142
69,481

0
1,323

335
39

4,261
4,343

57
261

1,123
1,068

67,918
76,515

10,732
10,132

400
400

7,147
7,710

1972
1973

71,119
80,395

111
100

1,981
1,258

3,974
3,099

106
68

1,260
1,152

78,551
86,072

10,410
11,567

400
400

8,313
8,716

1974
1975

84,760
92,789

954
1,335

299
211

2,001
3,688

999
1,126

3,195
3,312

92,208
102,461

11,652
11,599

400
500

9,253
10,218

1976

100,062

4,031

2,601

991

3,182

110,892

11,598

1,200

10,810

1977
1978

108,922
117,374

2,352
1,217

265
1,174

3,810
6,432

954
587

2,442
4,543

118,745
131,327

11,718
11,671

1,250
1,300

11,331
11,831

1979
1980

124,507
128,038

1,660
2,554

1,454
1,809

6,767
4,467

704
776

5,613
8,739

140,705
146,383

11,172
11,160

1,800
2,518

13,083
13,427

1981
1982

136,863
144,544

3,485
4,293

1,601
717

1,762
2,735

195
1,480

9,230
9,890

153,136
163,659

11,151
11,148

3,318
4,618

13,687
13,786

1983

159,203

1,592

918

1,605

418

8,728

172,464

11,121

4,618

15,732

Note: For a description of figures and discussion of their significance, see Banking and Monetary Statistics, 1941–1970 (Board of Governors of the
Federal Reserve System, 1976), pp. 507–23. Components may not sum to totals because of rounding.
1
In 1969 and thereafter, includes securities loaned—fully guaranteed by U.S. government securities pledged with Federal Reserve Banks—and
excludes securities sold and scheduled to be bought back under matched sale–purchase transactions. On September 29, 1971, and thereafter,
includes federal agency issues bought outright.
2
On December 1, 1966, and thereafter, includes federal agency obligations held under repurchase agreements.
3
In 1960 and thereafter, figures reflect a minor change in concept; refer to Federal Reserve Bulletin, vol. 47 (February 1961), p. 164.
4
Principally acceptances and, until August 21, 1959, industrial loans, the authority for which expired on that date.
5
For the period before April 16, 1969, includes the total of Federal Reserve capital paid in, surplus, other capital accounts, and other liabilities and
accrued dividends, less the sum of bank premises and other assets, and is reported as “Other Federal Reserve accounts”; thereafter, “Other Federal
Reserve assets” and “Other Federal Reserve liabilities and capital” are shown separately.
6
Before January 30, 1934, includes gold held in Federal Reserve Banks and in circulation.
7
Includes currency and coin (other than gold) issued directly by the Treasury. The largest components are fractional and dollar coins. For details refer
to ‘‘U.S. Currency and Coin Outstanding and in Circulation,’’ Treasury Bulletin.
n/a Not applicable.

Statistical Tables 217

Table G.5B. Reserves of depository institutions, Federal Reserve Bank credit, and related items, year-end
1918–1983—continued
Millions of dollars

Factors absorbing reserve funds

Period

Currency Treasury
in
cash
circulation holdings8

Deposits with Federal
Reserve Banks, other than
reserve balances

Other
Federal
Reserve
accounts5

Required
clearing
balances

Other
Federal
Reserve
liabilities
and
capital5

Member bank reserves9

1918

4,951

288

118

With
Federal
Reserve
Banks
1,636

n/a

1,585

1919
1920

5,091
5,325

385
218

31
57

73
5

28
18

208
298

0
0

1,890
1,781

n/a
n/a

1,822
n/a

68
n/a

1921
1922

4,403
4,530

214
225

96
11

12
3

15
26

285
276

0
0

1,753
1,934

n/a
n/a

1,654
n/a

99
n/a

1923
1924

4,757
4,760

213
211

38
51

4
19

19
20

275
258

0
0

1,898
2,220

n/a
n/a

1,884
2,161

14
59

1925
1926

4,817
4,808

203
201

16
17

8
46

21
19

272
293

0
0

2,212
2,194

n/a
n/a

2,256
2,250

-44
-56

1927

4,716

208

301

2,487

n/a

2,424

1928
1929

4,686
4,578

202
216

23
29

6
6

21
24

348
393

0
0

2,389
2,355

n/a
n/a

2,430
2,428

-41
-73

1930
1931

4,603
5,360

211
222

19
54

6
79

22
31

375
354

0
0

2,471
1,961

n/a
n/a

2,375
1,994

96
-33

1932
1933

5,388
5,519

272
284

8
3

19
4

24
128

355
360

0
0

2,509
2,729

n/a
n/a

1,933
1,870

576
859

1934
1935

5,536
5,882

3,029
2,566

121
544

20
29

169
226

241
253

0
0

4,096
5,587

n/a
n/a

2,282
2,743

1,814
2,844

1936
1937

6,543
6,550

2,376
3,619

244
142

99
172

160
235

261
263

0
0

6,606
7,027

n/a
n/a

4,622
5,815

1,984
1,212

1938

6,856

2,706

923

199

242

260

8,724

n/a

5,519

3,205

1939
1940

7,598
8,732

2,409
2,213

634
368

397
1,133

256
599

251
284

0
0

11,653
14,026

n/a
n/a

6,444
7,411

5,209
6,615

1941
1942

11,160
15,410

2,215
2,193

867
799

774
793

586
485

291
256

0
0

12,450
13,117

n/a
n/a

9,365
11,129

3,085
1,988

1943
1944

20,449
25,307

2,303
2,375

579
440

1,360
1,204

356
394

339
402

0
0

12,886
14,373

n/a
n/a

11,650
12,748

1,236
1,625

1945
1946

28,515
28,952

2,287
2,272

977
393

862
508

446
314

495
607

0
0

15,915
16,139

n/a
n/a

14,457
15,577

1,458
562

1947
1948

28,868
28,224

1,336
1,325

870
1123

392
642

569
547

563
590

0
0

17,899
20,479

n/a
n/a

16,400
19,277

1,499
1,202

1949

27,600

1,312

821

767

750

706

16,568

n/a

15,550

1,018

1950
1951

27,741
29,206

1,293
1,270

668
247

895
526

565
363

714
746

0
0

17,681
20,056

n/a
n/a

16,509
19,667

1,172
389

1952
1953

30,433
30,781

1,270
761

389
346

550
423

455
493

777
839

0
0

19,950
20,160

n/a
n/a

20,520
19,397

-570
763

1954
1955

30,509
31,158

796
767

563
394

490
402

441
554

907
925

0
0

18,876
19,005

n/a
n/a

18,618
18,903

258
102

1956
1957

31,790
31,834

775
761

441
481

322
356

426
246

901
998

0
0

19,059
19,034

n/a
n/a

19,089
19,091

-30
-57

Treasury Foreign

Other

Currency
and
Required11 Excess11,12
coin10

(continued)

218 107th Annual Report | 2020

Table G.5B.—continued
Factors absorbing reserve funds

Period

Currency Treasury
in
cash
circulation holdings8

Deposits with Federal
Reserve Banks, other than
reserve balances
Treasury Foreign

Other

Other
Federal
Reserve
accounts5

Required
clearing
balances

Other
Federal
Reserve
liabilities
and
capital5

Member bank reserves9
With
Federal
Reserve
Banks

Currency
and
Required11 Excess11,12
coin10

1958
1959

32,193
32,591

683
391

358
504

272
345

391
694

1,122
841

0
0

18,504
18,174

n/a
310

18,574
18,619

-70
-135

1960
1961

32,869
33,918

377
422

485
465

217
279

533
320

941
1,044

0
0

17,081
17,387

2,544
2,823

18,988
20,114

637
96

1962
1963

35,338
37,692

380
361

597
880

247
171

393
291

1,007
1,065

0
0

17,454
17,049

3,262
4,099

20,071
20,677

645
471

1964
1965

39,619
42,056

612
760

820
668

229
150

321
355

1,036
211

0
0

18,086
18,447

4,151
4,163

21,663
22,848

574
-238

1966

44,663

1,176

416

174

588

-147

19,779

4,310

24,321

-232

1967
1968

47,226
50,961

1,344
695

1,123
703

135
216

653
747

-773
-1,353

0
0

21,092
21,818

4,631
4,921

25,905
27,439

-182
-700

1969
1970

53,950
57,093

596
431

1,312
1,156

134
148

807
1,233

0
0

1,919
1,986

22,085
24,150

5,187
5,423

28,173
30,033

-901
-460

1971
1972

61,068
66,516

460
345

2,020
1,855

294
325

999
840

0
0

2,131
2,143

27,788
25,647

5,743
6,216

32,496
32,044

1,035
98

1973
1974

72,497
79,743

317
185

2,542
3,113

251
418

1,14913
1,27513

0
0

2,669
2,935

27,060
25,843

6,781
7,370

35,268
37,011

-1,360
-3,798

1975
1976

86,547
93,717

483
460

7,285
10,393

353
352

1,090
1,357

0
0

2,968
3,063

26,052
25,158

8,036
8,628

35,197
35,461

-1,10314
-1,535

1977

103,811

392

7,114

379

1,187

3,292

26,870

9,421

37,615

-1,265

1978
1979

114,645
125,600

240
494

4,196
4,075

368
429

1,256
1,412

0
0

4,275
4,957

31,152
29,792

10,538
11,429

42,694
44,217

-893
-2,835

1980
1981

136,829
144,774

441
443

3,062
4,301

411
505

617
781

0
0

0
117

4,671
5,261

27,456
25,111

13,654
15,576

40,558
42,145

675
-1,442

1982
1983

154,908
171,935

429
479

5,033
3,661

328
191

1,033
851

0
0

436
1,013

4,990
5,392

26,053
20,413

16,666
17,821

41,391
39,179

1,328
-945

Coin and paper currency held by the Treasury, as well as any gold in excess of the gold certificates issued to the Reserve Bank.
In November 1979 and thereafter, includes reserves of member banks, Edge Act corporations, and U.S. agencies and branches of foreign banks. On
November 13, 1980, and thereafter, includes reserves of all depository institutions.
10
Between December 1, 1959, and November 23, 1960, part was allowed as reserves; thereafter, all was allowed.
11
Estimated through 1958. Before 1929, data were available only on call dates (in 1920 and 1922 the call date was December 29). Since
September 12, 1968, the amount has been based on close-of-business figures for the reserve period two weeks before the report date.
12
For the week ending November 15, 1972, and thereafter, includes $450 million of reserve deficiencies on which Federal Reserve Banks are allowed
to waive penalties for a transition period in connection with bank adaptation to Regulation J as amended, effective November 9, 1972. Allowable
deficiencies are as follows (beginning with first statement week of quarter, in millions): 1973—Q1, $279; Q2, $172; Q3, $112; Q4, $84;
1974—Q1, $67; Q2, $58. The transition period ended with the second quarter of 1974.
13
For the period before July 1973, includes certain deposits of domestic nonmember banks and foreign-owned banking institutions held with member
banks and redeposited in full with Federal Reserve Banks in connection with voluntary participation by nonmember institutions in the Federal
Reserve System program of credit restraint. As of December 12, 1974, the amount of voluntary nonmember bank and foreign-agency and branch
deposits at Federal Reserve Banks that are associated with marginal reserves is no longer reported. However, two amounts are reported:
(1) deposits voluntarily held as reserves by agencies and branches of foreign banks operating in the United States and (2) Eurodollar liabilities.
14
Adjusted to include waivers of penalties for reserve deficiencies, in accordance with change in Board policy, effective November 19, 1975.
n/a Not applicable.
9

Statistical Tables 219

Table G.6. Principal assets and liabilities of insured commercial banks, June 30, 2020 and 2019
Millions of dollars, except as noted

Item

Member banks
Total

National

State

Nonmember
banks

13,768,118

10,957,632

8,917,674

2,039,958

2,810,485

9,773,863

7,478,505

6,065,786

1,412,719

2,295,358

9,770,358

7,476,610

6,064,359

1,412,252

2,293,748

3,994,254

3,479,127

2,851,888

627,239

515,127

796,738

757,345

668,668

88,677

39,393

3,197,517

2,721,782

2,183,220

538,562

475,734

2,189,551

1,895,457

1,516,153

379,304

294,094

14,391,906

11,724,208

9,591,713

2,132,494

2,667,699

Total

2020
Assets
Loans and investments
Loans, gross
Net
Investments
U.S. government securities
Other
Cash assets, total
Liabilities
Deposits, total
Interbank
Other transactions
Other nontransactions
Equity capital
Number of banks

305,180

282,167

235,742

46,425

23,013

2,865,179

2,362,351

1,718,761

643,590

502,828

11,221,548

9,079,690

7,637,210

1,442,480

2,141,858

2,008,346

1,632,639

1,330,759

301,880

375,707

4,421

1,479

778

701

2,942

12,443,668

10,118,249

7,977,653

2,140,595

2,325,419

9,068,571

7,171,574

5,640,140

1,531,434

1,896,997

9,066,524

7,170,233

5,639,087

1,531,147

1,896,291

3,375,097

2,946,675

2,337,514

609,161

428,422

2019
Assets
Loans and investments
Loans, gross
Net
Investments
U.S. government securities

517,970

490,846

421,415

69,430

27,125

2,857,127

2,455,830

1,916,098

539,731

401,297

1,044,605

894,894

708,430

186,464

149,711

11,764,419

9,668,697

7,666,782

2,001,915

2,095,722

259,729

237,395

193,824

43,570

22,335

Other transactions

1,923,550

1,577,689

1,196,523

381,166

345,860

Other nontransactions

9,581,140

7,853,613

6,276,435

1,577,178

1,727,527

1,955,665

1,627,673

1,287,905

339,768

327,991

4,621

1,542

798

744

3,079

Other
Cash assets, total
Liabilities
Deposits, total
Interbank

Equity capital
Number of banks

Note: Includes U.S.-insured commercial banks located in the United States but not U.S.-insured commercial banks operating in U.S. territories or possessions. Data are domestic assets and liabilities (except for those components reported on a consolidated basis only). Components may not sum to
totals because of rounding. Data for 2019 have been revised.

220 107th Annual Report | 2020

Table G.7. Initial margin requirements under
Regulations T, U, and X
Percent of market value

Effective date

Margin stocks Convertible bonds

Short sales,
T only1

1934, Oct. 1

25–45

n/a

1936, Feb. 1

25–55

n/a

1936, Apr. 1

n/a

1937, Nov. 1

n/a

1945, Feb. 5

n/a

1945, July 5

n/a

1946, Jan. 21

100

n/a

100

1947, Feb. 1

n/a

1949, Mar. 3

n/a

1951, Jan. 17

n/a

1953, Feb. 20

n/a

1955, Jan. 4

n/a

1955, Apr. 23

n/a

1958, Jan. 16

n/a

1958, Aug. 5

n/a

1958, Oct. 16

n/a

1960, July 28

n/a

1962, July 10

n/a

1963, Nov. 6

n/a

1968, Mar. 11

1968, June 8

1970, May 6

1971, Dec. 6

1972, Nov. 24

1974, Jan. 3

Note: These regulations, adopted by the Board of Governors pursuant
to the Securities Exchange Act of 1934, limit the amount of credit
that may be extended for the purpose of purchasing or carrying
margin securities (as defined in the regulations) when the loan is collateralized by such securities. The margin requirement, expressed as
a percentage, is the difference between the market value of the securities being purchased or carried (100 percent) and the maximum
loan value of the collateral as prescribed by the Board. Regulation T
was adopted effective October 1, 1934; Regulation U, effective
May 1, 1936; and Regulation X, effective November 1, 1971. The
former Regulation G, which was adopted effective March 11, 1968,
was merged into Regulation U, effective April 1, 1998.
1
From October 1, 1934, to October 31, 1937, the requirement was
the margin “customarily required” by the brokers and dealers.
n/a Not applicable.

Statistical Tables 221

Table G.8A. Statement of condition of the Federal Reserve Banks, by Bank, December 31, 2020 and 2019
Millions of dollars

Item

Total
2020

Boston
2019

New York

2020

2019

2020

Philadelphia

2019

Cleveland

Richmond

2020

2019

2020

2019

2020

2019

Assets
Gold certificates

11,037

337

351

3,665

3,707

319

327

524

531

753

754

Special drawing rights
certificates

5,200

196

1,818

210

237

412

Coin

1,563

1,657

130

146

100

206

220

Loans and securities
Primary, secondary, and
seasonal loans

1,602

876

54,535

4,773

8,615

6,264

1,559

3,083

1,000

255,619

5,303

518

139,458

6,190

7,479

15,643

Treasury securities, bought
outright2
4,688,929 2,328,933

105,298

48,316

2,427,729 1,270,598

106,976

56,399

146,702

68,139

293,874

142,522

2,347

1,215

1,280

147

144

2,039,467 1,408,677

45,800

29,225

1,055,950

768,533

46,530

34,113

63,809

41,214

127,822

86,206

7,703

2,584

177,596

67,965

7,826

3,017

10,732

3,645

21,498

7,624

-2,864

-7,247

-126

-322

-173

-389

-347

-813

3,669,635 2,240,597

167,557

99,454

222,734

120,157

446,189

251,326

Other loans
Securities purchased under
agreements to resell1

Government-sponsored
enterprise debt
securities, bought
outright2
Federal agency and
government-sponsored
enterprise mortgagebacked securities,
bought outright3
Unamortized premiums on
securities held outright4
Unamortized discounts on
securities held outright4
Total loans and securities

2,347

343,009

124,577

-5,532

-13,284

-124

-276

7,125,357 4,106,911

163,587

85,201

Consolidated variable
interest entities: Assets
held, net5

140,335

n/a

51,790

n/a

88,545

n/a

Accrued interest receivable
- System Open Market
Account

30,057

20,746

677

432

15,548

11,303

687

505

945

610

1,895

1,280

Foreign currency
denominated
investments6

22,204

20,711

1,054

892

7,462

6,572

799

1,197

1,897

1,653

4,687

4,416

Central bank liquidity
swaps7

17,883

3,728

849

161

6,010

1,183

644

215

1,528

298

3,775

795

(continued)

222 107th Annual Report | 2020

Table G.8A.—continued
Total

Item

2020

Boston
2019

2020

New York

2019

2020

Philadelphia

2019

2020

Cleveland

2019

2020

Richmond

2019

2020

2019

Other assets
Items in process of
collection
Bank premises

132

2,229

2,211

101

105

462

463

134

127

119

185

193

Deferred asset remittances to
the Treasury

926

-12

1,055

-13

-45

All other assets8

2,970

1,358

1,579

258

335

348

307

-4,919

22,285

167,835

-164,555

-8,481

-16,586

86,860

17,803

108,472

17,982

7,359,893 4,173,641

215,270

109,706

3,962,332 2,101,464

162,040

85,590

314,988

141,564

566,877

277,685

2,192,130 1,955,848

66,817

60,820

705,757

639,066

61,623

57,605

101,042

94,047

164,169

133,974

196,421

4,534

5,475

30,162

51,623

5,594

7,978

7,610

8,280

12,910

15,317

2,040,275 1,759,427

62,283

55,345

675,595

587,443

56,029

49,627

93,432

85,767

151,259

118,657

336,649

4,852

6,984

111,862

183,666

4,929

8,152

6,760

9,849

13,541

20,602

Depository institutions

2,994,932 1,548,849

107,297

45,313

1,274,441

884,120

99,375

26,040

207,045

42,395

392,342

129,285

Treasury, general account

1,728,569

403,853

n/a

1,728,569

403,853

n/a

Foreign, official accounts

21,838

5,182

21,812

5,154

195,827

74,074

1,859

56,432

21,584

4,017

766

346

4,941,166 2,031,958

109,158

45,380

3,081,254 1,314,711

99,376

26,042

211,065

42,435

393,116

129,640

Interdistrict settlement account
Total assets
Liabilities
Federal Reserve notes
outstanding
Less: Notes held by Federal
Reserve Bank
Federal Reserve notes
outstanding, net
Securities sold under
agreements to
repurchase1

151,855

216,051

Deposits

Other

Total deposits
Other liabilities
Accrued remittances to the
Treasury10

2,114

947

221

155

Deferred credit items

698

725

Consolidated variable
interest entities: Other
liabilities

213

n/a

187

n/a

1,500

n/a

1,500

n/a

10,143

4,245

410

154

4,876

1,751

297

162

340

181

799

500

7,210,046 4,135,118

178,390

107,877

3,873,613 2,088,518

160,631

84,204

311,597

138,272

558,715

269,554

Deposit - Treasury funding
of lending facility credit
protection
All other liabilities
Total liabilities

(continued)

Statistical Tables 223

Table G.8A.—continued
Item

Total
2020

Boston
2019

New York

2020

2019

1,470

1,505

2020

Philadelphia

2019

Cleveland

Richmond

2020

2019

2020

2019

2020

2019

1,163

1,141

2,800

2,709

6,738

6,690

Capital accounts
Capital paid-in
Surplus (including
accumulated other
comprehensive loss)

32,376

31,698

10,880

10,653

6,825

310

324

2,294

245

246

590

583

1,420

1,441

Total Reserve Bank capital

39,201

38,523

1,780

1,829

13,174

12,947

1,408

1,387

3,390

3,292

8,158

8,131

Consolidated variable
interest entities formed
to administer credit and
liquidity facilities:
Non-controlling interest

110,646

n/a

35,098

n/a

75,548

n/a

Total Reserve Bank capital
and consolidated
variable interest entities
non-controlling interest

149,847

38,523

36,878

1,829

88,722

12,947

1,408

1,387

3,390

3,292

8,158

8,131

7,359,893 4,173,641

215,268

109,706

3,962,335 2,101,465

162,039

85,591

314,987

141,564

566,873

277,685

Total liabilities and
capital accounts

Note: Components may not sum to totals because of rounding.
1
Contract amount of agreements.
2
Par value. Includes securities loaned—fully collateralized by U.S. Treasury securities, other investment-grade securities, and collateral eligible for triparty repurchase agreements pledged with Federal Reserve Banks.
3
The par amount shown is the remaining principal balance of the securities.
4
Reflects the premium or discount, which is the difference between the purchase price and the face value of the securities that has not been
amortized.
5
The Federal Reserve Bank of Boston is the primary beneficiary of MS Facilities LLC (Main Street Lending Program), and the Federal Reserve Bank of
New York is the primary beneficiary of Commercial Paper Funding Facility LLC, Corporate Credit Facilities LLC, Municipal Liquidity Facility LLC, and
Term Asset-Backed Securities Loan Facility II LLC. As a result, the accounts and results of operations of those LLCs are included in the combined
financial statements of the Federal Reserve Banks.
6
Valued daily at market exchange rates.
7
Dollar value of foreign currency held under these agreements valued at the exchange rate to be used when the foreign currency is returned to the
foreign central bank. This exchange rate equals the market exchange rate used when the foreign currency was acquired from the foreign
central bank.
8
Includes furniture and equipment and depository institution overdrafts.
9
Includes deposits of government-sponsored enterprises (GSEs), the Consumer Financial Protection Bureau, international organizations, and designated financial market utilities.
10
Represents the estimated weekly remittances to the U.S. Treasury.
11
Includes accrued benefit costs and cash collateral posted by counterparties under commitments to purchase and sell federal agency and GSE MBS.
* Less than $500,000.
n/a Not applicable.

224 107th Annual Report | 2020

Table G.8A. Statement of condition of the Federal Reserve Banks, by Bank, December 31, 2020 and
2019—continued
Millions of dollars

Item

Atlanta

Chicago

St. Louis

Minneapolis

Kansas City

Dallas

San Francisco

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

Assets
Gold certificates

1,529

1,560

713

711

329

328

180

186

297

292

920

890

1,471

1,400

Special drawing rights
certificates

654

424

150

153

282

574

Coin

154

169

258

276

106

113

183

192

293

282

Loans and securities
Primary, secondary, and
seasonal loans
Other Loans, net
Securities purchased under
agreements to resell1
Treasury securities, bought
outright2
Government-sponsored
enterprise debt
securities, bought
outright2

398

2,120

1,403

1,383

7,945

4,451

1,865

11,073

17,477

13,418

3,674

2,212

3,790

11,099

124

29,875

74,084 33,473

44,314

20,153

32,223 20,246

19,274

12,190

345,557 159,236 261,899 122,249

173

160

131

123

96,316 113,914

73,943

74,564 34,534 225,979 101,125 581,953 272,189

113

32,432 20,888

98,290

102

291

274

Federal agency and
government-sponsored
enterprise mortgagebacked securities,
bought outright3

150,301

Unamortized premiums on
securities held outright4

25,279

8,518

19,159

6,539

5,419

1,790

3,242

1,078

5,455

1,847

16,531

5,409

42,572

14,560

Unamortized discounts on
securities held outright4

-408

-908

-309

-697

-87

-191

-52

-115

-88

-197

-267

-577

-687

-1,553

523,133 280,800 396,348 215,594 113,076 59,027

74,764

Total loans and securities
Consolidated variable
interest entities: Assets
held, net5

61,166 253,123 164,636

35,547 116,883 60,898 342,606 178,324 888,847 479,982

n/a

Accrued interest receivable
- System Open Market
Account

2,213

1,418

1,677

1,088

475

298

284

179

478

307

1,446

899

3,732

2,427

Foreign currency
denominated
investments6

1,101

1,204

862

865

364

316

174

234

201

264

256

3,306

3,041

887

217

694

156

293

140

189

212

2,663

547

Central bank liquidity
swaps7

(continued)

Statistical Tables 225

Table G.8A.—continued
Atlanta

Item

2020

Chicago

2019

2020

St. Louis

2019

2020

Minneapolis

Kansas City

2019

2020

2019

2020

Dallas

2019

2020

San Francisco

2019

2020

2019

Other assets
Items in process of
collection

132

Bank premises

200

203

186

194

102

231

228

219

224

197

196

Deferred asset remittances to
the Treasury

-68

-57

All other assets8

100

107

131

103

177

130

Interdistrict settlement account

-112,353

32,067

5,189

32,779 -19,246

10,206

-12,985

4,961

-12,766 12,287

-31,818

23,822 -165,789

6,951

Total assets

417,667 318,453 406,420 252,133

95,682

70,622

62,873

41,286 105,938 74,618 314,397 204,992 735,414 495,530

302,765 273,526 142,287 126,522

63,686

59,561

36,247

31,925

11,593

4,660

4,775

2,680

2,837

280,967 243,959 132,607 114,929

59,026

54,786

33,567

29,088

Liabilities
Federal Reserve notes
outstanding
Less: Notes held by Federal
Reserve Bank
Federal Reserve notes
outstanding, net
Securities sold under
agreements to
repurchase1

21,798

15,922

29,567

23,018

9,680

12,067

17,671

3,414

4,839

2,042

2,913

47,428 140,534

59,920 54,132 186,470 164,272 301,347 260,398
4,736

6,680

13,854

18,681

33,638 33,616

55,184 47,452 172,616 145,591 267,709 226,782

3,436

4,992

10,412

14,618

26,815 39,345

Deposits
Depository institutions

69,052

32,260

10,200

26,641

8,744

Treasury, general account

n/a

Foreign, official accounts

913 119,069

48,592

103

6,324

2,256

4,446

102

48,343 259,605 117,646

32,262

10,204

26,728

8,847

Other

114,835

2,804

Total deposits

117,641

40,311 19,336 125,751

46,635 21,592 130,197

43,935 434,101 223,003

44,009 434,128 223,111

Other liabilities
Accrued remittances to the
Treasury10

256

123

212

Deferred credit items

696

713

Consolidated variable
interest entities: Other
liabilities

n/a

Deposit - Treasury funding
of lending facility credit
protection

n/a

668

254

604

301

238

120

201

134

257

151

464

194

989

344

415,894 316,543 404,883 250,637

94,940

69,990

62,538

All other liabilities
Total liabilities

40,985 105,515 74,212 313,689 204,535 729,641 489,794

(continued)

226 107th Annual Report | 2020

Table G.8A.—continued
Item

Atlanta

Chicago

St. Louis

Minneapolis

Kansas City

Dallas

San Francisco

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

1,464

1,572

1,269

1,231

616

520

275

248

350

334

583

376

4,768

4,720

Capital accounts
Capital paid-in
Surplus (including
accumulated other
comprehensive loss)

309

338

267

265

130

112

123

1,005

1,016

Total Reserve Bank capital

1,773

1,910

1,536

1,496

746

632

333

301

424

406

706

457

5,773

5,736

Consolidated variable
interest entities formed
to administer credit and
liquidity facilities:
Non-controlling interest

n/a

Total Reserve Bank capital
and consolidated
variable interest entities
non-controlling interest

1,773

1,910

1,536

1,496

746

632

333

301

424

406

706

457

5,773

5,736

417,667 318,453 406,419 252,133 95,686

70,622

62,871

Total liabilities and
capital accounts

41,286 105,939 74,618 314,395 204,992 735,414 495,530

Statistical Tables 227

Table G.8B. Statement of condition of the Federal
Reserve Banks, December 31, 2020 and 2019
Supplemental information—collateral held against
Federal Reserve notes: Federal Reserve agents’
accounts
Millions of dollars

Item
Federal Reserve notes outstanding
Less: Notes held by Federal Reserve
Banks not subject to collateralization
Collateralized Federal Reserve notes

2020

2019

2,192,130

1,955,848

151,855

196,421

2,040,275

1,759,427

11,037

5,200

Collateral for Federal Reserve notes
Gold certificates
Special drawing rights certificates
U.S. Treasury securities
Total collateral
1

2,024,038

1,743,190

2,040,275

1,759,427

Face value. Includes compensation to adjust for the effect of inflation on the original face value of inflation-indexed securities.

228 107th Annual Report | 2020

Table G.9. Income and expenses of the Federal Reserve Banks, by Bank, 2020
Thousands of dollars

Item

Total

Boston

New York

Philadelphia

Cleveland

Richmond

Current income
Interest income
Primary, secondary, and
seasonal loans
Other loans, net
Interest income on securities
purchased under agreements
to resell

22,180

711

14,513

201

283

215

336,222

186,634

37,059

12,755

4,178

10,749

723,351

15,115

392,880

17,428

21,292

44,360

67,539,231

1,484,766

35,488,362

1,567,067

2,075,193

4,205,362

Government-sponsored enterprise
debt securities, net

135,187

2,968

71,104

3,140

4,149

8,414

Federal agency and governmentsponsored enterprise
mortgage-backed securities, net

32,338,364

706,765

17,059,675

753,729

988,692

2,009,975

Treasury securities

Foreign currency denominated
investments, net

(40,475)

(1,879)

(13,424)

(1,664)

(3,405)

(8,564)

Central bank liquidity swaps1

488,440

23,033

163,500

18,329

41,546

103,169

101,542,499

2,418,112

53,213,669

2,370,985

3,131,926

6,373,679

Total interest income
Income from priced services

446,201

—

128,081

—

Securities lending fees

32,783

712

17,361

767

997

2,034

Other income

14,684

394

8,842

266

432

717

Total other income

493,668

1,106

154,283

1,033

1,430

2,751

102,036,167

2,419,218

53,367,952

2,372,018

3,133,356

6,376,430

2,783,294

157,036

596,901

117,503

128,044

394,534

851,976

45,002

190,633

34,242

39,529

117,094

Fees

515,861

36,724

59,775

12,346

12,344

296,243

Travel

21,862

1,017

2,773

683

989

3,069

Postage and other shipping costs

14,062

150

1,754

139

1,505

394

Communications

42,356

1,098

4,323

701

685

25,817

Materials and supplies

77,691

5,415

22,088

10,193

3,396

7,073

56,523

8,738

15,861

1,741

1,597

2,405

Total current income
Net expenses
Personnel
Salaries and other personnel
expenses
Retirement and other benefits
Administrative

Building
Taxes on real estate
Property depreciation

147,722

11,498

30,744

9,281

8,955

14,730

Utilities

31,322

3,106

7,250

1,264

1,260

3,466

Rent

34,374

276

2,040

1,003

23,601

Other building

78,255

12,735

14,970

3,917

5,039

5,478

38,032

2,345

4,259

1,248

2,006

7,253

2,902

273

784

216

138

642

80,648

1,217

5,602

1,676

1,989

50,002

Equipment/software
Purchases
Rentals
Depreciation

(continued)

Statistical Tables 229

Table G.9.—continued
Item

Total

Repairs and maintenance

Boston

New York

Philadelphia

Cleveland

Richmond

72,099

1,802

4,434

1,883

2,286

36,493

305,381

6,409

45,366

4,104

10,011

149,087

Other expenses

219,155

174,351

182,592

18,349

18,637

(571,293)

Recoveries

(372,272)

(45,680)

(37,340)

(20,804)

(7,187)

(66,445)

(75,011)

(1,387)

(8,391)

(1,641)

(7,499)

(1,658)

4,926,231

422,126

1,146,417

197,096

224,726

497,984

Software
Other expenses

Expenses capitalized2
Total operating expenses before
pension expense and
reimbursements
3

System pension service costs

661,601

—

661,601

—

Reimbursements

(731,851)

(4,876)

(174,490)

(2,814)

(61,920)

(41,049)

4,855,980

417,250

1,633,528

194,282

162,806

456,935

711,190

14,754

388,004

17,223

20,808

43,522

7,883,312

175,428

4,399,154

181,256

232,977

638,060

4,473

100

2,330

103

139

280

Operating expenses
Interest expense on securities sold
under agreements to repurchase
Interest to depository institutions
and others
Other expenses
Net expenses

(13,454,955)

(607,531)

(6,423,017)

(392,864)

(416,729)

(1,138,797)

Current net income

88,581,212

1,811,686

46,944,935

1,979,155

2,716,627

5,237,634

2,440

1,263

153

664,061

14,911

343,842

15,151

20,775

41,618

1,541,876

73,792

520,750

52,487

132,535

325,142

68,067

(16,014)

225,406

(5,577)

(8,269)

(24,672)

2,660

280

(0)

(1)

2,379

(82,772)

—

(67,759)

(37)

(853)

2,196,332

72,745

1,023,783

62,119

145,079

343,767

Board expenditures4

947,000

44,772

317,645

34,186

80,659

199,706

Cost of currency

831,133

34,364

171,915

33,942

52,248

71,767

Consumer Financial Protection
Bureau5

517,300

24,261

173,536

18,950

43,791

108,690

2,295,433

103,397

663,096

87,077

176,698

380,162

Net income from consolidated
variable interest entities

(1,784,655)

(2,400,682)

616,028

—

Non-controlling interest in
consolidated variable interest
entities (income), net

1,854,475

2,402,405

(547,930)

—

Reserve Bank and consolidated
variable interest entities net
income before providing for
remittances to the Treasury

88,551,932

1,782,756

47,373,720

1,954,197

2,685,007

5,201,239

Earnings remittances to the Treasury

86,890,110

1,784,372

46,057,454

1,926,819

2,653,366

5,161,686

Additions to (+) and deductions from (-) current net income
Profit on sales of Treasury securities
Profit on sales of federal agency and
government-sponsored enterprise
mortgage-backed securities
Foreign currency translation
gains (losses)
Other components of net
benefit cost
Other additions
Other deductions
Net additions or deductions to
current net income
Assessments by Board

Assessments by the Board of
Governors
Consolidated variable interest entities

(continued)

230 107th Annual Report | 2020

Table G.9.—continued
Item

Total

Boston

New York

Philadelphia

Cleveland

Richmond

31,641

39,552

Net income after providing for
remittances to the Treasury

1,661,821

(1,616)

1,316,266

27,378

Other comprehensive income (loss)

(1,275,509)

5,269

(1,208,652)

(12,365)

4,317

7,047

386,312

3,653

107,614

15,014

35,957

46,599

386,312

17,795

107,722

15,524

29,032

66,696

Comprehensive income
Distribution of comprehensive income
Dividends on capital stock
Transferred to/from surplus and
change in accumulated other
comprehensive income

—

(14,142)

(108)

(510)

6,925

(20,097)

Earnings remittances to the Treasury

86,890,110

1,784,372

46,057,454

1,926,819

2,653,366

5,161,686

Total distribution of net income

87,276,422

1,788,025

46,165,068

1,941,832

2,689,324

5,208,285

Note: Components may not sum to totals because of rounding.
1
Represents interest income recognized on swap agreements with foreign central banks.
2
Includes expenses for labor and materials capitalized and depreciated or amortized as charges to activities in the periods benefited.
3
Reflects the effect of the Financial Accounting Standards Board’s Codification Topic (ASC 715) Compensation-Retirement Benefits. Pension service
costs for the System Retirement Plan is recorded on behalf of the System in the books of the Federal Reserve Bank of New York.
4
For additional details, see the Board of Governors Financial Statements at https://www.federalreserve.gov/aboutthefed/audited-annual-financialstatements.htm.
5
The Board of Governors assesses the Reserve Banks to fund the operations of the Consumer Financial Protection Bureau. These assessments are
allocated to each Reserve Bank based on each Reserve Bank’s capital and surplus balances as of the most recent quarter.

Statistical Tables 231

Table G.9. Income and expenses of the Federal Reserve Banks, by Bank, 2020—continued
Thousands of dollars

Item

Atlanta

Chicago

St. Louis

Minneapolis

Kansas City

Dallas

San Francisco

177

1,708

179

136

422

552

3,084

8,608

7,781

4,167

13,481

13,007

6,164

31,640

Current income
Interest income
Primary, secondary, and
seasonal loans
Other loans, net
Interest income on securities
purchased under agreements
to resell

49,794

38,182

10,487

6,310

10,794

31,711

84,998

4,877,985

3,709,575

1,040,453

623,401

1,053,966

3,165,861

8,247,241

Government-sponsored enterprise
debt securities, net

9,750

7,417

2,079

1,246

2,107

6,325

16,489

Federal agency and governmentsponsored enterprise
mortgage-backed securities, net

2,322,694

1,768,008

494,712

296,553

502,040

1,504,251

3,931,269

Treasury securities

Foreign currency denominated
investments, net

(2,089)

(1,600)

(653)

(288)

(419)

(485)

(6,007)

Central bank liquidity swaps1

24,520

19,069

7,967

3,718

5,121

5,816

72,652

7,291,440

5,550,140

1,559,391

944,557

1,587,039

4,720,195

12,381,367

225,173

92,947

—

2,342

1,784

498

299

506

1,513

3,968

837

637

185

108

279

563

1,424

Total interest income
Income from priced services
Securities lending fees
Other income
Total other income

228,352

95,368

683

407

786

2,077

5,392

7,519,792

5,645,509

1,560,074

944,964

1,587,824

4,722,271

12,386,759

Salaries and other personnel
expenses

217,704

233,228

177,256

124,177

222,752

147,801

266,358

Retirement and other benefits

70,873

67,214

51,637

37,183

66,730

50,126

81,713

Fees

14,728

8,488

9,155

6,136

18,564

3,922

37,436

Travel

2,217

2,526

1,128

653

2,182

1,329

3,297

Postage and other shipping costs

2,297

238

629

264

1,161

2,139

3,392

Communications

1,466

2,075

1,298

458

1,300

1,311

1,825

Materials and supplies

4,927

7,058

1,987

2,021

5,341

3,227

4,964

2,821

4,874

1,447

4,104

4,391

3,392

5,151

12,068

15,456

7,966

4,063

8,896

10,069

13,997

2,260

2,050

1,465

1,774

2,487

2,316

2,624

Total current income
Net expenses
Personnel

Administrative

Building
Taxes on real estate
Property depreciation
Utilities
Rent
Other building

348

1,276

3,835

191

651

740

356

4,533

9,582

2,560

2,348

3,846

5,897

7,350

2,791

3,423

2,049

2,331

5,955

1,754

2,619

246

465

2,952

3,688

1,634

1,153

3,109

3,337

4,289

Equipment/software
Purchases
Rentals
Depreciation

(continued)

232 107th Annual Report | 2020

Table G.9.—continued
Item
Repairs and maintenance
Software

Atlanta

Chicago

St. Louis

Minneapolis

Kansas City

Dallas

San Francisco

5,601

3,512

1,480

1,275

2,591

3,740

7,002

10,769

5,998

6,583

3,233

28,851

7,245

27,726

Other expenses
Other expenses

147,640

33,632

154,149

2,417

(5,665)

24,661

39,686

Recoveries

(8,616)

(24,717)

(11,360)

(15,990)

(44,104)

(31,544)

(58,487)

Expenses capitalized2

(2,911)

(5,238)

(1,771)

(6,334)

(22,668)

(1,783)

(13,731)

494,714

374,826

413,141

171,522

306,392

239,704

437,584

Total operating expenses before
pension expense and
reimbursements
3

System pension service costs

—

Reimbursements

(27,006)

(3,432)

(245,288)

(39,433)

(109,195)

(20,096)

(2,251)

Operating expenses

467,707

371,393

167,854

132,088

197,197

219,608

435,332

48,626

37,331

10,222

6,154

10,546

30,881

83,119

241,026

515,438

53,330

45,388

84,315

249,513

1,067,426

327

248

213

551

Interest expense on securities sold
under agreements to repurchase
Interest to depository institutions
and others
Other expenses
Net expenses
Current net income

(757,687)

(924,410)

(231,476)

(183,673)

(292,128)

(500,215)

(1,586,429)

6,762,105

4,721,098

1,328,598

761,292

1,295,696

4,222,057

10,800,330

Additions to (+) and deductions from (-) current net income
Profit on sales of Treasury securities

180

136

118

303

Profit on sales of federal agency and
government-sponsored enterprise
mortgage-backed securities

48,935

37,089

10,491

6,275

10,559

32,001

82,413

Foreign currency translation
gains (losses)

75,294

59,477

25,432

12,496

16,379

18,237

229,855

Other components of net
benefit cost

(10,280)

(26,539)

(11,191)

(9,355)

(14,907)

(4,168)

(26,364)

Other additions

(8)

(0)

(1)

Other deductions

(5)

(14,148)

(11)

(1)

(0)

114,115

70,200

10,623

9,428

12,069

46,197

286,206

45,911

36,855

15,505

7,680

10,070

13,624

140,388

Net additions or deductions to
current net income
Assessments by Board
Board expenditures4
Cost of currency

126,439

69,961

27,744

16,126

24,521

72,150

129,956

Consumer Financial Protection
Bureau5

26,196

20,054

8,398

4,047

5,442

7,545

76,390

Assessments by the Board of
Governors

198,546

126,870

51,647

27,853

40,033

93,319

346,734

Net income from consolidated
variable interest entities

—

Non-controlling interest in
consolidated variable interest
entities (income), net

—

Reserve Bank and consolidated
variable interest entities net
income before providing for
remittances to the Treasury

6,677,674

4,664,428

1,287,574

742,867

1,267,733

4,174,935

10,739,802

Earnings remittances to the Treasury

6,681,631

4,624,672

1,250,242

723,806

1,249,886

4,105,690

10,670,486

Consolidated variable interest entities

(continued)

Statistical Tables 233

Table G.9.—continued
Item

Atlanta

Chicago

St. Louis
37,332

Minneapolis

Net income after providing for
remittances to the Treasury

(3,958)

39,756

Other comprehensive income (loss)

(2,746)

(13,893)

(6,993)

Comprehensive income

(6,704)

25,863

30,339

23,074

23,470

12,431

6,836

19,061

Kansas City

Dallas

San Francisco

17,847

69,245

69,317

(7,636)

(3,723)

(12,048)

(24,085)

11,425

14,124

57,197

45,231

12,264

15,247

56,221

Distribution of comprehensive income
Dividends on capital stock
Transferred to/from surplus and
change in accumulated other
comprehensive income

(29,778)

2,393

17,908

4,589

1,860

41,950

(10,990)

Earnings remittances to the Treasury

6,681,631

4,624,672

1,250,242

723,806

1,249,886

4,105,690

10,670,486

Total distribution of net income

6,674,928

4,650,535

1,280,581

735,231

1,264,009

4,162,888

10,715,717

234 107th Annual Report | 2020

Table G.10. Income and expenses of the Federal Reserve Banks, 1914–2020
Thousands of dollars

Transferred
to/from
surplus
Consumer Other
and
compreTransferred
Financial
Dividends
change in
Protection hensive
Interest on to/from
paid
accumu5
income
Costs of Bureau
Statutory Federal surplus
lated
4
currency and Office (loss)
transfers Reserve
other
of
notes
compreFinancial
hensive
3
Research
income6

Assessments by the
Board of Governors
Federal
Reserve
Bank
and
period

Current
income

Net
additions
Net
or
expenses
deductions Board
expendi(−)1, 2
tures

Distributions to the
U.S. Treasury

All banks
1914–15

2,173

2,018

302

n/a

217

n/a

1916

5,218

1917

16,128

2,082

-193

192

n/a

4,922

-1,387

238

n/a

1918
1919

67,584

10,577

-3,909

383

n/a

102,381

18,745

-4,673

595

n/a

1920
1921

181,297

27,549

-3,744

710

n/a

122,866

33,722

-6,315

741

n/a

1922

50,499

28,837

-4,442

723

n/a

1923

50,709

29,062

-8,233

703

1924

38,340

27,768

-6,191

663

1925

41,801

26,819

-4,823

1926

47,600

24,914

1927

43,024

24,894

1928

64,053

1929

n/a

1,743

n/a

6,804

1,134

n/a

1,134

5,541

n/a

48,334

5,012

2,704

n/a

70,652

n/a

5,654

60,725

n/a

82,916

n/a

6,120

59,974

n/a

15,993

n/a

6,307

10,851

n/a

-660

n/a

6,553

3,613

n/a

2,546

n/a

6,682

114

n/a

-3,078

709

n/a

6,916

n/a

2,474

-3,638

722

1,714

n/a

7,329

818

n/a

8,464

-2,457

779

1,845

n/a

7,755

250

n/a

5,044

25,401

-5,026

698

806

n/a

8,458

2,585

n/a

21,079

70,955

25,810

-4,862

782

3,099

n/a

9,584

4,283

n/a

22,536

1930

36,424

25,358

-93

810

2,176

n/a

10,269

n/a

-2,298

1931

29,701

24,843

311

719

1,479

n/a

10,030

n/a

-7,058

1932

50,019

24,457

-1,413

729

1,106

n/a

9,282

2,011

n/a

11,021

1933

49,487

25,918

-12,307

800

2,505

n/a

8,874

n/a

-917

1934

48,903

26,844

-4,430

1,372

1,026

n/a

8,782

n/a

-60

6,510

1935

42,752

28,695

-1,737

1,406

1,477

n/a

8,505

298

n/a

607

1936

37,901

26,016

486

1,680

2,178

n/a

7,830

227

n/a

103

353

1937

41,233

25,295

-1,631

1,748

1,757

n/a

7,941

177

n/a

2,616

1938

36,261

25,557

2,232

1,725

1,630

n/a

8,019

120

n/a

-419

1,862

1939

38,501

25,669

2,390

1,621

1,356

n/a

8,110

n/a

-426

4,534

1940

43,538

25,951

11,488

1,704

1,511

n/a

8,215

n/a

-54

17,617

1941

41,380

28,536

721

1,840

2,588

n/a

8,430

141

n/a

-4

571

1942

52,663

32,051

-1,568

1,746

4,826

n/a

8,669

198

n/a

3,554

1943

69,306

35,794

23,768

2,416

5,336

n/a

8,911

245

n/a

135

40,327

1944

104,392

39,659

3,222

2,296

7,220

n/a

9,500

327

n/a

201

48,410

1945

142,210

41,666

-830

2,341

4,710

n/a

10,183

248

n/a

262

81,970

1946

150,385

50,493

-626

2,260

4,482

n/a

10,962

n/a

81,467

1947

158,656

58,191

1,973

2,640

4,562

n/a

11,523

75,284

8,366

(continued)

Statistical Tables 235

Table G.10.—continued
Transferred
to/from
surplus
Consumer Other
and
compreTransferred
Financial
Dividends
change in
Protection hensive
Interest on to/from
paid
accumu5
income
Costs of Bureau
Statutory Federal surplus
lated
4
currency and Office (loss)
transfers Reserve
other
of
notes
compreFinancial
hensive
3
Research
income6

Assessments by the
Board of Governors
Federal
Reserve
Bank
and
period

Current
income

Net
additions
Net
or
expenses
deductions Board
expendi(−)1, 2
tures

Distributions to the
U.S. Treasury

1948

304,161

64,280

-34,318

3,244

5,186

n/a

11,920

n/a

166,690

n/a

18,523

1949

316,537

67,931

-12,122

3,243

6,304

n/a

12,329

n/a

193,146

n/a

21,462

1950

275,839

69,822

36,294

3,434

7,316

n/a

13,083

n/a

196,629

n/a

21,849

1951

394,656

83,793

-2,128

4,095

7,581

n/a

13,865

n/a

254,874

n/a

28,321

1952

456,060

92,051

1,584

4,122

8,521

n/a

14,682

n/a

291,935

n/a

46,334

1953

513,037

98,493

-1,059

4,100

10,922

n/a

15,558

n/a

342,568

n/a

40,337

1954

438,486

99,068

-134

4,175

6,490

n/a

16,442

n/a

276,289

n/a

35,888

1955

412,488

101,159

-265

4,194

4,707

n/a

17,712

n/a

251,741

n/a

32,710

1956

595,649

110,240

-23

5,340

5,603

n/a

18,905

n/a

401,556

n/a

53,983

1957

763,348

117,932

-7,141

7,508

6,374

n/a

20,081

n/a

542,708

n/a

61,604

1958

742,068

125,831

124

5,917

5,973

n/a

21,197

n/a

524,059

n/a

59,215

1959

886,226

131,848

98,247

6,471

6,384

n/a

22,722

n/a

910,650

n/a

-93,601

1960

1,103,385

139,894

13,875

6,534

7,455

n/a

23,948

n/a

896,816

n/a

42,613

1961

941,648

148,254

3,482

6,265

6,756

n/a

25,570

n/a

687,393

n/a

70,892

1962

1,048,508

161,451

-56

6,655

8,030

n/a

27,412

n/a

799,366

n/a

45,538

1963

1,151,120

169,638

615

7,573

10,063

n/a

28,912

n/a

879,685

n/a

55,864

1964

1,343,747

171,511

726

8,655

17,230

n/a

30,782

n/a

1,582,119

n/a

-465,823

1965

1,559,484

172,111

1,022

8,576

23,603

n/a

32,352

n/a

1,296,810

n/a

27,054

1966

1,908,500

178,212

996

9,022

20,167

n/a

33,696

n/a

1,649,455

n/a

18,944

1967

2,190,404

190,561

2,094

10,770

18,790

n/a

35,027

n/a

1,907,498

n/a

29,851

1968

2,764,446

207,678

8,520

14,198

20,474

n/a

36,959

n/a

2,463,629

n/a

30,027

1969

3,373,361

237,828

-558

15,020

22,126

n/a

39,237

n/a

3,019,161

n/a

39,432

1970

3,877,218

276,572

11,442

21,228

23,574

n/a

41,137

n/a

3,493,571

n/a

32,580

1971

3,723,370

319,608

94,266

32,634

24,943

n/a

43,488

n/a

3,356,560

n/a

40,403

1972

3,792,335

347,917

-49,616

35,234

31,455

n/a

46,184

n/a

3,231,268

n/a

50,661

1973

5,016,769

416,879

-80,653

44,412

33,826

n/a

49,140

n/a

4,340,680

n/a

51,178

1974

6,280,091

476,235

-78,487

41,117

30,190

n/a

52,580

n/a

5,549,999

n/a

51,483

1975

6,257,937

514,359

-202,370

33,577

37,130

n/a

54,610

n/a

5,382,064

n/a

33,828

1976

6,623,220

558,129

7,311

41,828

48,819

n/a

57,351

n/a

5,870,463

n/a

53,940

1977

6,891,317

568,851

-177,033

47,366

55,008

n/a

60,182

n/a

5,937,148

n/a

45,728

1978

8,455,309

592,558

-633,123

53,322

60,059

n/a

63,280

n/a

7,005,779

n/a

47,268

1979

10,310,148

625,168

-151,148

50,530

68,391

n/a

67,194

n/a

9,278,576

n/a

69,141

1980

12,802,319

718,033

-115,386

62,231

73,124

n/a

70,355

n/a

11,706,370

n/a

56,821

1981

15,508,350

814,190

-372,879

63,163

82,924

n/a

74,574

n/a

14,023,723

n/a

76,897

1982

16,517,385

926,034

-68,833

61,813

98,441

n/a

79,352

n/a

15,204,591

n/a

78,320

(continued)

236 107th Annual Report | 2020

Assessments by the
Board of Governors
Federal
Reserve
Bank
and
period

Current
income

Net
additions
Net
or
expenses
deductions Board
expendi(−)1, 2
tures

Distributions to the
U.S. Treasury

1983

16,068,362

1,023,678

-400,366

71,551

152,135

n/a

85,152

n/a

14,228,816

n/a

106,663

1984

18,068,821

1,102,444

-412,943

82,116

162,606

n/a

92,620

n/a

16,054,095

n/a

161,996

1985

18,131,983

1,127,744

1,301,624

77,378

173,739

n/a

103,029

n/a

17,796,464

n/a

155,253

1986

17,464,528

1,156,868

1,975,893

97,338

180,780

n/a

109,588

n/a

17,803,895

n/a

91,954

1987

17,633,012

1,146,911

1,796,594

81,870

170,675

n/a

117,499

n/a

17,738,880

n/a

173,771

1988

19,526,431

1,205,960

-516,910

84,411

164,245

n/a

125,616

n/a

17,364,319

n/a

64,971

1989

22,249,276

1,332,161

1,254,613

89,580

175,044

n/a

129,885

n/a

21,646,417

n/a

130,802

1990

23,476,604

1,349,726

2,099,328

103,752

193,007

n/a

140,758

n/a

23,608,398

n/a

180,292

1991

22,553,002

1,429,322

405,729

109,631

261,316

n/a

152,553

n/a

20,777,552

n/a

228,356

1992

20,235,028

1,474,531

-987,788

128,955

295,401

n/a

171,763

n/a

16,774,477

n/a

402,114

1993

18,914,251

1,657,800

-230,268

140,466

355,947

n/a

195,422

n/a

15,986,765

n/a

347,583

1994

20,910,742

1,795,328

2,363,862

146,866

368,187

n/a

212,090

n/a

20,470,011

n/a

282,122

1995

25,395,148

1,818,416

857,788

161,348

370,203

n/a

230,527

n/a

23,389,367

n/a

283,075

1996

25,164,303

1,947,861

-1,676,716

162,642

402,517

n/a

255,884

5,517,716

14,565,624

n/a

635,343

1997

26,917,213

1,976,453

-2,611,570

174,407

364,454

n/a

299,652

20,658,972

n/a

831,705

1998

28,149,477

1,833,436

1,906,037

178,009

408,544

n/a

343,014

17,785,942

8,774,994

n/a

731,575

1999

29,346,836

1,852,162

-533,557

213,790

484,959

n/a

373,579

n/a

25,409,736

n/a

479,053

2000

33,963,992

1,971,688

-1,500,027

188,067

435,838

n/a

409,614

n/a

25,343,892

n/a

4,114,865

2001

31,870,721

2,084,708

-1,117,435

295,056

338,537

n/a

428,183

n/a

27,089,222

n/a

517,580

2002

26,760,113

2,227,078

2,149,328

205,111

429,568

n/a

483,596

n/a

24,495,490

n/a

1,068,598

2003

23,792,725

2,462,658

2,481,127

297,020

508,144

n/a

517,705

n/a

22,021,528

n/a

466,796

2004

23,539,942

2,238,705

917,870

272,331

503,784

n/a

582,402

n/a

18,078,003

n/a

2,782,587

2005

30,729,357

2,889,544

-3,576,903

265,742

477,087

n/a

780,863

n/a

21,467,545

n/a

1,271,672

2006

38,410,427

3,263,844

-158,846

301,014

491,962

n/a

871,255

n/a

29,051,678

n/a

4,271,828

2007

42,576,025

3,510,206

198,417

296,125

576,306

n/a

324,481

992,353

n/a

34,598,401

n/a

3,125,533

2008

41,045,582

4,870,374

3,340,628

352,291

500,372

n/a

-3,158,808

1,189,626

n/a

31,688,688

n/a

2,626,053

2009

54,463,121

5,978,795

4,820,204

386,400

502,044

n/a

1,006,813

1,428,202

n/a

47,430,237

n/a

4,564,460

2010

79,300,937

6,270,420

9,745,562

422,200

622,846

42,286

45,881

1,582,785

n/a

79,268,124

n/a

883,724

2011

85,241,366

7,316,643

2,015,991

472,300

648,798

281,712

-1,161,848

1,577,284

n/a

75,423,597

n/a

375,175

2012

81,586,102

7,798,353

18,380,835

490,001

722,301

387,279

-52,611

1,637,934

n/a

88,417,936

n/a

460,528

2013

91,149,953

9,134,656

-1,029,750

580,000

701,522

563,200

2,288,811

1,649,277

n/a

79,633,271

n/a

147,088

2014

116,561,512 10,714,872

-2,718,283

590,000

710,807

563,000

-1,611,569

1,685,826

n/a

96,901,695

n/a

1,064,952

2015

114,233,676 11,139,956

-1,305,513

705,000

689,288

489,700

366,145

1,742,745

25,955,921

91,143,493

n/a

-18,571,798

2016

111,743,998 17,262,620

-114,255

709,000

700,728

596,200

-183,232

711,423

91,466,545

n/a

2017

114,193,573 33,397,138

1,932,579

740,000

723,534

573,000

650,808

783,599

80,559,689

n/a

(continued)

Statistical Tables 237

Assessments by the
Board of Governors
Federal
Reserve
Bank
and
period

Current
income

Net
additions
Net
or
expenses
deductions Board
expendi(−)1, 2
tures

Distributions to the
U.S. Treasury

2018

112,861,657

47,353,636

-382,959

838,000

848,807

337,100

41,831

998,703

65,319,280

n/a

-3,175,000

2019

103,220,435

45,423,825

-169,458

814,000

836,975

518,600

148,923

713,931

54,892,569

n/a

2020

102,036,168

13,454,957

2,266,152

947,000

831,133

517,300

-1,275,509

386,312

86,890,110

n/a

Total
1914–2020 1,961,103,747 276,973,707 41,021,946

13,047,117

18,447,472

4,869,377

-2,569,884

25,818,777 449,198,072 1,198,433,402

-4

12,767,3897

44,842,511

135

518,083

Aggregate for each Bank, 1914–2020
Boston
New York

68,392,808

8,827,198

415,348

566,293

964,041

216,006

15,371

11,772,420

27,476,759

3,779,742

4,744,802

1,570,463

-2,747,278

7,315,810 235,705,652 545,077,826

-433

4,724,342

Philadelphia

60,340,306

8,981,468

860,275

770,039

838,315

301,067

12,368

1,771,429

11,831,153

36,308,189

291

411,507

Cleveland

78,708,404

8,598,449

854,893

994,373

1,067,569

385,326

23,628

1,930,148

16,099,870

49,612,575

-10

891,692

Richmond

140,422,978

20,243,201

2,656,023

2,528,561

1,583,191

1,037,842

51,211

5,203,690

28,737,141

81,295,580

-72

2,521,180

Atlanta

129,936,087

18,185,877

1,853,900

842,029

2,078,428

274,569

41,839

1,673,926

32,531,303

75,616,315

659,155

Chicago

154,180,037

19,218,923

1,972,322

818,702

1,867,604

164,014

17,325

1,519,274

22,088,217 109,806,844

683,716

St. Louis

45,283,553

5,449,841

443,759

209,944

635,126

54,419

27,368

403,676

7,598,407

31,149,772

-27

235,623

Minneapolis

25,134,449

5,201,699

434,934

217,421

360,838

28,174

8,781

464,493

3,653,323

15,436,029

211,534

Kansas City

50,262,967

7,760,110

600,008

230,350

644,157

49,125

-18,191

448,070

7,040,057

34,476,668

-9

194,396

Dallas

80,588,986

10,099,594

1,146,141

336,833

1,177,253

69,906

19,408

642,817

19,247,326

49,889,286

249,026

218,066,517

32,809,321

2,307,586

1,752,836

2,486,146

718,471

-21,711

3,314,467

52,893,206 124,921,807

-17

1,467,138

1,961,103,746 276,973,705 41,021,948

13,047,118

18,447,472

4,869,377

-2,569,883

25,818,777 449,198,072 1,198,433,402

-4

12,767,389

San
Francisco
Total

909,786,643 131,598,026

1,130,976

Note: Components may not sum to totals because of rounding.
1
For 1987 and subsequent years, includes the cost of services provided to the Treasury by Federal Reserve Banks for which reimbursement was not
received.
2
The Federal Reserve Bank of Boston is the primary beneficiary of MS Facilities LLC (Main Street Lending Program), and the Federal Reserve Bank of
New York is the primary beneficiary of Commercial Paper Funding Facility LLC, Corporate Credit Facilities LLC, Municipal Liquidity Facility LLC, and
Term Asset-Backed Loan Facility II LLC. As a result, the accounts and results of operations of those LLCs are included in the combined financial
statements of the Federal Reserve Banks.
3
Starting in 2010, as required under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Board of Governors began
assessing the Reserve Banks to fund the operations of the Consumer Financial Protection Bureau and, for a two-year period beginning July 21,
2010, the Office of Financial Research. These assessments are allocated to the Reserve Banks based on each Reserve Bank’s capital and surplus
balances as of the most recent quarter.
4
Represents transfers made as a franchise tax from 1917 through 1932; transfers made under section 13b of the Federal Reserve Act from 1935
through 1947; transfers made under section 7 of the Federal Reserve Act for 1996, 1997, and 2015–20.
5
Transfers made under section 13b of the Federal Reserve Act.
6
Transfers made under section 7 of the Federal Reserve Act. Beginning in 2006, accumulated other comprehensive income is reported as a component of surplus.
7
The $12,767,389 thousand transferred to surplus was reduced by direct charges of $500 thousand for charge-off on Bank premises (1927);
$139,300 thousand for contributions to capital of the Federal Deposit Insurance Corporation (1934); $4 thousand net upon elimination of section
13b surplus (1958); $106,000 thousand (1996), $107,000 thousand (1997), and $3,752,000 thousand (2000) transferred to the Treasury as
statutorily required; and $1,848,716 thousand related to the implementation of SFAS No. 158 (2006) and was increased by a transfer of $11,131
thousand from reserves for contingencies (1955), leaving a balance of $6,825,000 thousand on December 31, 2020.
8
This amount is reduced by $9,176,997 thousand for expenses of the System Retirement Plan. See note 4, “Table G.9. Income and expenses of the
Federal Reserve Banks, by Bank, 2020.”
n/a Not applicable.
(continued)

238 107th Annual Report | 2020

Table G.11. Operations in principal departments of the Federal Reserve Banks, 2017–20
Operation

2020

2019

2018

2017

Millions of pieces
Currency processed
Currency destroyed
Coin received

26,596

33,042r

2,043

5,140

4,819

4,571

33,994

56,101

56,012r

58,249r

34,312

32,942

Checks handled
U.S. government checks1
Postal money orders
Commercial
Securities transfers2

3,767

4,389

4,740

5,153

184

168

158

153

Commercial

16,549

15,584

14,692

13,749

Government

1,878

1,704

1,668

1,629

Currency processed

561,278

665,246r

659,126

644,395

Currency destroyed

30,514

84,254r

98,590

112,202

3,294

5,408

5,387

5,585

205,905

149,337

148,149

145,599

20,558

21,412

21,034r

20,682

Funds transfers3
Automated clearinghouse transactions

Millions of dollars

Coin received
Checks handled
U.S. government checks1
Postal money orders
Commercial

7,874,721

8,317,894

8,485,159

8,438,008

Securities transfers2

361,728,932

345,813,248

296,335,209

299,334,719

Funds transfers3

840,483,038

695,835,129

716,211,759

740,096,838

Commercial

31,446,232

28,081,631

25,860,072

23,398,576

Government

6,852,715

5,787,018

5,515,114

5,370,695

Automated clearinghouse transactions

Includes government checks handled electronically (electronic checks).
Data on securities transfers do not include reversals.
Data on funds transfers do not include non-value transfers.
r Revised.
2
3

Statistical Tables 239

Table G.12. Number and annual salaries of officers and employees of the Federal Reserve Banks,
December 31, 2020
President
Federal Reserve Bank
(including branches)

Annual
salary
(dollars)1

Other officers
Number

Annual
salaries
(dollars)1

Employees
Number
Full
time

Part
time

Total

Annual
salaries
Temporary/
(dollars)1, 3
hourly2

Number

Annual
salaries
(dollars)1, 3

Boston

450,500

104

28,184,720

976

123,653,608

1,104

152,288,828

New York

506,300

596

164,730,014

2,456

342,356,820

3,078

507,593,134

Philadelphia

435,100

17,514,175

791

87,796,452

904

105,745,727

Cleveland

428,500

18,128,550

958

98,080,527

1,070

116,637,577

Richmond

405,800

21,320,000

1,383

140,501,883

1,503

162,227,683

Atlanta

417,700

111

26,249,267

1,570

167,228,070

1,738

193,895,037

Chicago

450,500

144

35,954,504

1,438

170,064,771

1,612

206,469,775

St. Louis

404,200

101

24,172,700

1,306

133,541,504

1,434

158,118,404

Minneapolis

435,200

15,628,802

986

97,263,227

1,105

113,327,229

Kansas City

404,400

112

23,622,700

1,937

170,973,915

2,068

195,001,015

Dallas

440,700

18,724,492

1,202

115,392,329

1,314

134,557,521

San Francisco

482,900

115

31,164,430

1,663

205,489,973

1,833

237,137,303

Federal Reserve
Information Technology

n/a

20,958,800

1,300

168,840,214

1,391

189,799,014

Office of
Employee Benefits

n/a

4,880,300

6,162,460

11,042,760

5,261,800

1,783

451,233,454

18,011

231

180

2,027,345,753

20,217

2,483,841,007

Total

Note: Components may not sum to totals because of rounding.
1
Annual salary (excluding outside agency costs) based on salaries in effect on December 31, 2020.
2
Temporary/hourly employees are paid by the Bank, generally work less than 780 hours, and are employed on a temporary basis
(such as interns).
3
Annual salary totals include pandemic premium pay for essential staff as a result of COVID-19.
n/a Not applicable.

240 107th Annual Report | 2020

Table G.13. Acquisition costs and net book value of the premises of the Federal Reserve Banks and
Branches, December 31, 2020
Thousands of dollars

Federal Reserve
Bank or Branch

Acquisition costs
Land

Buildings
(including vaults)1

Building machinery
and equipment

Total2

Net book value

Other real estate

Boston

27,293

210,456

48,616

286,365

100,504

n/a

New York

69,326

634,859

147,504

851,689

462,231

n/a

Philadelphia

8,146

179,801

50,775

238,722

134,359

n/a

Cleveland

4,219

162,292

40,014

206,525

106,423

n/a

5,126

32,912

21,830

59,868

20,188

n/a

32,524

185,309

67,103

284,936

124,648

n/a

7,917

43,911

16,112

67,940

27,645

n/a

Cincinnati
Richmond
Baltimore
Charlotte

7,884

46,560

17,581

72,025

32,343

n/a

25,185

165,513

25,523

216,221

128,549

n/a

Birmingham

5,347

13,283

3,144

21,774

11,301

n/a

Jacksonville

2,185

28,252

15,174

45,611

23,531

n/a

New Orleans

3,789

16,561

8,572

28,922

11,593

n/a

Miami

4,598

36,058

15,029

55,685

24,957

n/a

Atlanta

Chicago

7,460

258,344

44,478

310,282

117,086

n/a

Detroit

13,373

76,010

15,091

104,474

69,016

n/a

St. Louis

9,942

148,191

19,414

177,547

90,132

n/a

Memphis

2,472

18,799

6,734

28,005

7,021

n/a

Minneapolis

22,998

114,886

21,192

159,076

83,800

n/a

Helena

3,316

10,366

2,068

15,750

7,485

n/a

Kansas City

38,965

218,854

26,435

284,254

207,104

n/a

Denver

4,499

15,017

6,119

25,635

11,001

n/a

Omaha

4,727

12,960

3,289

20,976

12,447

n/a

38,100

150,638

39,337

228,075

115,296

n/a

262

6,207

3,596

10,065

3,904

n/a

Dallas
El Paso
Houston

32,323

104,845

9,604

146,772

99,566

n/a

San Francisco

20,988

151,515

38,155

210,658

86,067

n/a

Los Angeles

6,306

94,268

28,665

129,239

58,445

n/a

Salt Lake City

1,294

6,666

3,036

10,996

4,004

n/a

Seattle
Total
1

13,101

50,282

5,829

69,212

48,476

n/a

423,665

3,193,615

750,019

4,367,299

2,229,122

n/a

Includes expenditures for construction at some offices, pending allocation to appropriate accounts.
Excludes charge-offs of $17,699 thousand before 1952.
n/a Not applicable.
2

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