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F e d e r a l r e s e r v e Ba n k o f D a lla s
DALLAS. TEXAS
75222
Circular No. 79-20
January 31, 1979
IMPROVEMENT OF RULEMAKING PROCEDURES
TO ALL BANKS
AND OTHERS CONCERNED IN THE
ELEVENTH FEDERAL RESERVE DISTRICT:
The Board of Governors of the Federal Reserve System has issued
a policy statement expanding its rulemaking procedures to improve the
quality and public understanding of its regulations.
The principal elements of the procedures the Board will followwith some exceptions--in developing new or revised Federal Reserve regula
tions include:
--
Early involvement of the public, by such means as advance
notice of rulemaking; identification of areas in which the
Board would particularly like comment; open conferences
or informal public hearings; and direct solicitation of
the views of interested persons or groups, with attention
given to getting views from differing sources.
--
Early involvement of designated members of the Board.
--
Staff preparation of a regulatory analysis, prior to pro
posals for rulemaking, that will describe the need for and
purposes of a new or revised regulation; examine available
alternative courses of action; estimate the possible
economic impact and the burdens of compliance, record
keeping, and reporting that would be involved, and indi
cate the reasons for the particular course of action
selected.
—
Staff presentation of a regulatory proposal to the Board
only after the designated Board members are satisfied that
the issues have been adequately considered at the staff
level, that the proposal is understandable and that it
will impose no unnecessary burdens.
--
Board consideration of regulatory proposals, ordinarily, at
meetings open to public observation.
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
-2-
--
Allowance of at least 60 days for public comment.
--
Staff analysis of comment received and presentation
of the analysis to designated Board members. The Board
will consider a proposal for action only after the
designated Board members are satisfied that public
comment has received full consideration.
--
Final Board action, ordinarily at an open meeting.
The Board's announcement of its action will discuss
reasons for the action and the Board's reasons for
accepting or rejecting suggestions received from the
public.
--
Board publication of a descriptive semi-annual agenda
of regulations under development or review, and of
the status of regulatory development projects already
announced.
--
Board review of each of its regulations at least once
each five years.
Where delays occasioned by the new lengthier rulemaking procedures
would not be necessary or in the public interest, the Board will adopt ex
pedited procedures. Section 1 of the policy statement provides a number of
examples of regulatory actions for which expedited procedures are appropriate.
The new procedures do not apply to the formulation of monetary
policy or to amendments of regulations required to implement monetary policy
decisions of the Board or the Federal Open Market Committee.
The Board's policy statement is enclosed.
Sincerely yours,
Ernest T. Baughman
President
Enclosure
Extract From
Federal Register
VOL. 44, NO. 14
Friday, January 19, 1979
pp. 3957 - 3959
rulemaking procedures that will be
more elaborate than those prescribed
in the Board’s Rules of Procedure for
Rulemaking (12 CFR 262.2). When the
Board has good cause to follow more
expedited procedures, such as those
set forth in its regulations, it will state
the reasons in the F e d e r a l R e g is t e r
notice accompanying the action. The
new procedures do not apply to the
formulation of monetary policy or to
amendments of regulations required to
implement monetary policy decisions.
The Board believes that this ap
proach fully complies with the spirit
of Executive Order No. 12044 ( “Im
proving Government Regulations”)
and contributes significantly to fur
thering the President’s goals of reduc
ing regulatory burdens and Improving
regulations.
The Board is implementing this
policy Immediately and welcomes sug
gestions for improving the policy.
DATES: Comments should be submit
ted in writing on or before March 20,
1979. The new policy is effective Janu
ary 10,1979.
ADDRESS: Submit comments to the
Secretary to the Board, Board of Gov
ernors of the Federal Reserve System,
Washington, D.C. 20551. The com
ments received will be available for in
spection and copying.
FO R
FU R T H E R
CONTACT:
[6210-01-M ]
Title 12—Banks and Banking
CHAPTER II— FEDERAL RESERVE
SYSTEM
SUPCHAPTER A —BOARD OF GOVERNORS OF
THE FEDERAL RESERVE SYSTEM
[Docket No. R-0196]
PART 262—RULES OF PROCEDURE
Statement o f Policy
A G E N C Y: Board of Governors of the
Federal Reserve System.
ACTIO N: Statement of policy regard
ing expanded rulemaking procedures.
SU M M A R y: The Board of Governors
of the Federal Reserve System desires
to Improve the quality of its regula
tions through greater public participa
tion in the development of its regula
tions and early involvement by Board
members in the process to assure that
regulations are not unduly burden
some and complex. The Board also
wishes to improve public understand
ing of the considerations underlying
the regulations it adopts. To accom
plish these objectives, the Board is
adopting a general policy of following
IN F O R M A T IO N
Jerauld C. Kluckman, Associate Di
rector, Division of Consumer Affairs,
Board of Governors of the Federal
Reserve System, Washington, D.C.
20551. Telephone: (202) 452-3401.
SU P PL E M E N T A R Y INFO R M A T IO N:
The Board, with participation by the
Federal Reserve Banks, is engaged in a
Regulatory Improvement Project in
volving a zero-base review of all Feder
al Reserve regulations that affect the
public. Each regulation is being ana
lyzed to determine: the fundamental
objectives of the regulation; whether
the regulation is obsolete or a differ
ent approach would be appropriate;
the costs and benefits of the regula
tion; whether it can be made less bur
densome or nonregulatory alternatives
adopted without reducing its effective
ness to achieve present-day goals; and
whether the regulation is as simple as
possible and understandable to those
who must comply. To date, this review
has been completed for two regula
tions (Regulations C and E; see 43 FR
53708 and Board release of Nov. 9,
1978), and substantial staff work has
been done on others. Deadlines have
been set to assure that the review of
remaining regulations will be complet
ed as soon as possible.
The Board also has decided to im
prove access to all Federal Reserve
regulatory materials by authorizing is
suance of a new, publicly distributed
regulatory service that will include
regulations, published and previously
unpublished Board interpretations,
previously uncirculated Board and
staff rulings and opinions, relevant
policy statements and other materials
that affect the public. The Board
plans to introduce this service in early
1980 and will update it periodically.
The Board believes that ready access
to the full range of regulatory materi
als will enable those regulated to oper
ate with a far greater degree of cer
tainty, and understanding of and com
pliance with Board rules will be en
hanced.
As a further effort to improve its
regulations and the regulatory proc
ess, the Board as a matter of policy
also will apply expanded procedures to
the development of new regulations.
These procedures are more elaborate
than those prescribed in the Board’s
Rules of Procedure for Rulemaking
(12 CFR 262.2).
At the same time, the Board is aware
that a lengthier, more involved rule
making procedure may result in delays
detrimental to those making plans or
seeking immediate relief from undue
burdens. Therefore, when the Board
believes that more expedited proce
dures are fair, necessary, or desirable,
it will follow such procedures and
inform the public of the reasons for its
decision. Ordinarily, consideration of a
regulation In a new area of the law
will involve greater time and public
participation than an amendment to
an existing regulation in an estab
lished area of the law.
Examples of regulatory actions for
which expedited procedures may be
appropriate are the following:
(1) The regulation is a technical
amendment (e.g., reflecting a name
change) or a clarifying change;
(2) The regulation requires prompt
action in the public interest (e.g.,
changes in reserve requirements, stock
market margin requirements, or the
discount rate, or actions designed to
eliminate a loophole);
(3) The regulation reduces a burden
where further delay would cause un
necessary harm;
(4) The regulation is a reformulation
of a proposal previously issued for
public comment; and
(5) The regulation must be adopted
within a statutory deadline.
The Board believes its policy will
result in improved Board regulations
and fully complies with the spirit of
Executive Order No. 12044, dated
March 23, 1978 ("Improving Govern
ment Regulations”) (43 F R 12661). In
several ways, it goes beyond that
Order. For example, the policy gener
ally will be followed for all new pro
posals, whether or not they are re
garded as “significant,” and a regula
tory analysis will be made in all cases.
To implement this approach the
Board has adopted the following
policy statement:
S t a t e m e n t o r P o l i c y R e g a r d in g
E x p a n d e d R u l e m a k in g P r o c e d u r e s
s e c t io n
1
Policy. I t is the policy o f the Board
o f Governors o f the Federal Reserve
System to improve the quality and
minimize the burdens o f its regula
tions by carefully considering an anal
ysis o f proposed regulations before
they are published fo r comment, en
couraging maximum public participa
tion in the development o f the regula
tions, and inform ing the public o f the
reasons fo r the Board’s regulatory ac
tions.
T o achieve these objectives and to
comply with the spirit o f Executive
Order 12044, the Board is setting forth
in this statement expanded rulemak
ing procedures that it intends to
follow in developing regulations. I f the
Board finds it necessary or beneficial
in the public interest to avoid delay by
follow ing more expedited procedures,
such as those set forth in the Board’s
Rules o f Procedure fo r Rulemaking
(12 C F R 262.2), the Board w ill state its
reasons in a notice accompanying its
actions. T h e new procedures do not
apply to the formulation o f monetary
policy or to amendments o f regula
tions required to implement monetary
policy decisions.
Examples o f regulatory actions fo r
which expedited procedures may be
appropriate are the following:
(1 ) T h e regulation is a technical
amendment (e.g., reflecting a name
change) or a clarifying change;
(2 ) T h e regulation requires prompt
action in the public interest (e.g.,
changes in reserve requirements, stock
market margin requirements, or the
discount rate, or actions designed to
eliminate a loophole);
(3 ) T h e regulation reduces a burden
where further delay would cause un
necessary harm;
(4 ) T h e regulation is a reformulation
o f a proposal previously issued fo r
public comment; and
(5) Th e regulation must be adopted
within a statutory deadline.
SECTION 3
P u b lic involvem ent in the develop
m ent o f proposals. T h e Board believes
that the public can make valuable con
tributions in identifying issues that
should be addressed in its regulations.
W ith respect to regulations imple
menting new areas o f law or major re
visions o f existing regulations, the
Board will endeavor to obtain prelimi
nary views o f interested persons prior
to the development o f a proposed reg
ulation. For this purpose, the Board
w ill utilize such procedures as it deems
appropriate, including publication o f
an advance notice o f proposed rule
making, which m ay suggest specific
issues on which comments should be
focused; scheduling o f an open confer
ence or inform al public hearing; and
direct solicitation o f views from inter
ested persons or groups, selected so as
to assure that conflicting interests and
appropriate public bodies are fairly
represented.
SECTION 4
In itia l analysis o f proposals. Before
presenting any proposals regarding a
regulation to the Board fo r formal
action, the staff will prepare a regula
tory analysis o f the proposal. Th e
extent o f the regulatory analysis at
this stage w ill vary, depending upon
the nature o f the regulation. In every
case, at a minimum, the regulatory
analysis will discuss the need fo r and
purposes o f the regulation, set forth
the various options available, discuss,
where appropriate, their possible eco
nomic implications, evaluate their
compliance, recordkeeping and report
ing burdens, and recommend the best
course o f action based on an evalua
tion o f the alternatives. I f the regula
tion concerns an area where consider
able information is available, a corre
spondingly more exhaustive regula
tory analysis will be expected.
W hen the designated Board mem
bers involved are satisfied that the
issues have been adequately treated by
the staff, that the proposals are as
simple as possible and understandable
to those who must comply and that no
unnecessary burdens would be im
posed, the sta ff w ill present the pro
posals to the Board fo r action.
SECTION 2
s e c t io n
Developm ent o f regulatory plan. Des
ignated members o f the Board will
become involved at an early stage in
the development o f regulations and
w ill meet w ith sta ff to review the
issues to be considered, the alternative
approaches to be explored, a tentative
plan to obtain public comment, and
target dates fo r completion o f steps in
the development o f the regulation.
s
Prelim in a ry action by the Board.
Consideration o f the proposals by the
Board ordinarily will take place at a
meeting open to public observation.
T h e Board ordinarily w ill authorize
publication o f a proposed regulation
fo r comment. A t that time, the regula
tory analysis o f the proposals w ill be
made available to the public.
s c c t io n
s
General p u b lic participa tion . Th e
Board generally w ill allow at least 60
days fo r public comment on a pro
posed regulation. T h e notice accompa
nying the proposal will contain a sum
m ary analysis o f the regulation and
inform the public th a t copies o f the
regulatory
analysis are
available
through the Freedom o f Inform ation
O ffice. W hen deemed appropriate, the
Board may also schedule an informal
public hearing.
SECTION 7
S ta ff analysis follow in g public com
ments. T h e sta ff will prepare a sum
mary o f comments received, and this
document, as well as the written com
ments. w ill be made available to the
public. A fte r taking account o f the
public comments, the sta ff w ill pre
pare recommendations fo r considera
tion by the designated Board mem
bers. W hen these members are satis
fied that the public comments have re
ceived fu ll and appropriate attention,
the sta ff’s analysis and recommenda
tions w ill be presented to the Board
fo r action.
SECTION 8
F inal action by the Board and an
nouncement o f its decision. Final
action on the proposals by the Board
ordinarily will take place at a meeting
open to public observation. Th e Board
w ill announce the reasons fo r what
ever action it takes regarding a pro
posed regulation. T h e announcement
w ill discuss the Board’s rationale fo r
accepting or rejecting arguments re
garding the significant issues raised by
the public. I f the earlier regulatory
analysis made available to the public is
changed materially, a revised regula
tory analysis w ill be made available.
SECTION 9
Sem iannual agenda o f regulations.
On the first Monday in October, the
Board w ill publish in the F e d e r a l R e g
i s t e r a schedule showing the times
during the next twelve months when
it w ill publish a semiannual agenda o f
regulations under development or
review. T h e agenda shall describe the
regulations that the Board anticipates
w ill be considered, the need and legal
basis fo r the action being taken, and
the status o f regulations previously
listed on the agenda. Each item on the
agenda w ill include the name and tele
phone number o f a knowledgeable
member o f the Board's staff. Supple
ments to the agenda may be published
at other times during the year as ap
propriate.
SECTION 10
P eriod ic review o f regulations. Th e
Board will review each o f its existing
regulation* at least once every five
years. Each regulation is to be re-ex
amined with a view toward eliminating
or sim plifying it and easing burdens
imposed by it. In selecting regulations
to be reviewed, the Board w ill consider
such factors as the length o f time
since the last evaluation o f the regula
tion, the continued need fo r it, the
type and number of'com plain ts and
suggestions received, the direct and in
direct burdens imposed by the regula
tion, and the need to sim plify or clari
fy the regulation and eliminate dupli
cation. Essentially the same proce
dures described in this policy state
ment w ill be followed in the periodic
review o f regulations.
Board o f Governors o f the Federal
Reserve System, January 15,1979.
T heodore E. A l l is o n ,
Secretary o f the Board.
[FR Doc. 79-1910 Filed 1-18-79; 845 am]
@FedFRASER