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fe d e r a l r e se r v e B ank DALLAS, T E X A S o f D allas 75222 Circular No. 83-56 April 15, 1983 REGULATION D RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS (Revised Slip Sheet) TO ALL DEPOSITORY INSTITUTIONS IN THE ELEVENTH FEDERAL RESERVE DISTRICT: There is attached a current copy of all amendments to Regulation D (Reserve Requirements of Depository Institutions) as effective March 31, 1983. This revised slip sheet, dated April 1983, should be filed with Regulation D in the Regulations Binder furnished by this Bank. If you have any questions in this regard, please contact Allan Neale, (214) 651-6334 at the Head Office; Javier Jimenez, (915) 544-4730 at the El Paso Branch; Rodney Franklin, (713) 659-4433 at the Houston Branch; or Pete Castleberry, (512) 224-2141 a t the San Antonio Branch. Additional copies of this circular will be furnished upon request to the Public Affairs Department, Extension 6289. Sincerely yours, William H. Wallace First Vice President Enclosure Banks and others are encouraged to use the follow ing incom ing WATS numbers in contacting this Bank: 1-800-442-7140 (intrastate) and 1-800-527-9200 (interstate). For calls placed locally, please use 651 plus the extension referred to above. This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) Board of Governors of the Federal Reserve System Amendments to Regulation D Reserve Requirements of Depository Institutions* April 1983 1. Effective September 1, 1982, subparagraphs (b)(2) and (c)(1) o f section 204.2 are amend ed to read as follows: SECTION 204.2— Definitions (b) • • • (2) A “demand deposit” does not in clude (i) checks or drafts drawn by the depository institution on the Federal Re serve or on another depository institu tion; (ii) a deposit or account issued pur suant to 12 CFR 1204.121, including those with an original maturity or re quired notice period of 7 to 13 days; or (iii) for depository institutions not sub ject to the rules of the Depository Institu tions Deregulation Committee under 12 USC 3501 et seq., a deposit or account issued with an original maturity or re quired notice period of 7 to 13 days if such deposit or account is nonnegotiable, subject to a minimum balance of $20,000, and not otherwise a transaction account under section 204.2(e) of this part. (c ) (1 ) * • • (E ) that constitute a “savings depos it” which is not regarded as a “transac tion account;” (ii) borrowings, regardless of maturi ty, represented by a promissory note, an acknowledgment of advance, or similar obligation described in section 2 0 4 .2 (a )(l)(v ii) that is issued to * F o r th is r e g u la tio n to b e c o m p le te , as a m e n d e d e ffe c tiv e M arch 31, 1983, d e s tro y th e s lip s h e et d a te d May 1982 a n d r e ta in — • R e g u la tio n D p a m p h le t d a te d coverf a n d • th is s lip she et. M arch 1982 (see in sid e Ite m s 3 a n d 5 w ere in c lu d e d o n th e May 1982 s lip sh e et. All o th e r ite m s a re new . N ote th e d e f e r r e d e ffe c tiv e d a te s o f ite m s 7 t h r o u g h 10. any office located outside the United States of another depository institu tion or Edge or agreement corpora tion organized under the laws of the United States, to any office located outside the United States of a for eign bank, or to institutions whose time deposits are exempt from inter est rate limitations under section 217.3(g) of Regulation Q (12 CFR 217.3(g)); and (iii) a deposit or account issued pursuant to 12 CFR 1204.121, in cluding those with an original matu rity or required notice period of 7 to 13 days; or for depository institu tions not subject to the rules of the Depository Institutions Deregula tion Committee under 12 USC 3501 et seq., a deposit or account issued with an original maturity or re quired notice period of 7 to 13 days if such deposit or account is nonne gotiable, subject to a minimum bal ance of $20,000, and is not otherwise a transaction account under section 204.2(e) of this part. 2. Effective October 5, 1982, section 204.2(e) is amended to read as follows: (e) * • * (4) deposits or accounts in which pay ments may be made to third parties by means of an automated teller machine, remote service unit or other electronic device; (5) deposits or accounts in which pay ments may be made to third parties by means of a debit card; (6) deposits or accounts under the terms of which, or which by practice of the de pository institution, the depositor is per mitted or authorized to make more than three withdrawals per month for purpos1 Regulation D es of transferring funds to another ac count or for making a payment to a third party by means of preauthorized or tele phone agreement, order or instruction. An account that permits or authorizes more than three such withdrawals in a calendar month, or statement cycle (or similar period) of at least four weeks, is a “transaction account” whether or not more than three such withdrawals actual ly are made during such period. A “preauthorized transfer” includes any ar rangement by the depository institution to pay a third party from the account of a depositor upon written or oral instruc tion (including an order received through an automated clearing house (A C H )), or any arrangement by a de pository institution to pay a third party from the account of the depositor at a predetermined time or on a fixed sched ule. An account is not a “transaction ac count” by virtue of an arrangement that permits withdrawals for the purpose of repaying loans and associated expenses at the same depository institution (as origi nator or servicer); and (7) deposits or accounts maintained in connection with an arrangement that permits the depositor to obtain credit di rectly or indirectly through the drawing of a negotiable or nonnegotiable check, draft, order or instruction or other simi lar device (including telephone or elec tronic order or instruction) on the issu ing institution that can be used for the purpose of making payments or transfers to third persons or others, or to a deposit account of the depositor. Deposits that were established before October 5, 1982, subject to arrangements will not be re garded as transaction accounts until the deposit issued in connection with the line of credit is extended, or matures and is renewed. 3. Effective April 28, 1982, section 204.3(d) is amended by adding at the end thereof a new sentence to read as follows: 2 SECTION 204.3— Computation and Maintenance (« * )••• (3) * • • The Board may require any depository institution that is experiencing above-normal growth to report on a weekly basis prior to reporting $15 mil lion or more in total deposits for two consecutive calendar quarters. 4. Effective October 28, 1982, section 204.4(b) and (c) is amended to read as follows: SECTION 204.4— Transitional Adjustments • • • • • (b) Members and form er members. The re quired reserves of any depository institution that is a member bank on September 1, 1980, or withdraws from membership after March 31, 1980, shall be determined as fol lows: • * * (c) Certain form er member banks. The re quired reserves of any depository institution that was a member bank on July 1, 1979, and withdrew from membership during the period beginning on July 1, 1979, and end ing on March 31, 1980, shall be determined by reducing the amount of required reserves computed under section 204.3 in accord ance with the following schedule: Reserve maintenance periods occurring between October 28, 1982 and October 26,1983 October 27, 1983 and October 24, 1984 October 23, 1984 and October 23, 1985 October 24, 1985 and forward Percentage that computed reserves will be reduced 50 33.3 16.7 0 However, an institution shall not reduce the amount of required reserves on any category o f deposits or accounts that are first autho rized under federal law in any state after April 1, 1980. • • • • • Regulation D 5. Effective April 28, 1982, section 204.4(e)(2) is revised to read as follows: S E C T IO N 204.4— Transitional A djustm ents * • • • • 7. Effective February 2, 1984 (the beginning of the reserve maintenance period to which con temporaneous reserve requirements will ap ply), section 204.2(h), footnote 1 is amended by deleting the word “ fourth" and inserting in its place the word “second”. (e) De novo institutions. • • • (2) Notwithstanding paragraph (1 ), the required reserves of any depository insti tution that— 8. Effective February 2, 1984, section 204.3, (i) was not engaged in business on paragraphs (c), (d), and (h) are revised to November 18, 1981; and read as follows: (ii) has S50 million or more in daily average total transaction accounts, nonpersonal time deposits and Euro SE C T IO N 204.3— C om putation and currency liabilities for any computa M aintenance tion period after commencing business * * * * * shall be 100 percent of the required re (c) Computation o f required reserves. serves computed under section 204.3 (1) Required reserves are computed on starting with the maintenance period that begins eight days after the computation the basis of daily average balances of de period during which such institution has posits and Eurocurrency liabilities during daily average total transaction accounts, a 14-day period ending every second nonpersonal time deposits and Eurocur Monday (the “computation period”). rency liabilities of SSO million or more. Reserve requirements are computed by applying the ratios prescribed in section 6. E ffective March 31, 1983, section 204.9(a) is 204.9 to the classes of deposits and Euro revised to read as follow s: currency liabilities of the institution. The reserve balance that is required to be SE C T IO N 204.9— Reserve maintained with the Federal Reserve Requirem ent R atios shall be maintained during a 14-day peri (a) Reserve percentages. The following re od (the "maintenance period” ) which serve ratios are prescribed for all depository begins on a Thursday and ends on the institutions, Edge and agreement corpora second Wednesday thereafter. tions and United States branches and agen (2) A reserve balance shall be main cies of foreign banks: tained during a given maintenance peri od, based— (i) on the daily average net transac Category Reserve requirement tion accounts held by the depository NET TRANSACTION institution during the computation pe ACCOUNTS riod that began immediately prior to $0-$26.3 million 3% of amount the beginning of the maintenance peri Over $26.3 million $789,(M ) plus 12% M od; and of am ount over (ii) on the daily average nonpersonal $26.3 million time deposits and daily average Euro NONPERSONAL currency liabilities held by the deposi TIME DEPOSITS By original maturity tory institution during the computa (or notice period): tion period that ended 17 days prior to less than 2Vi years 3% the beginning of the maintenance 2'A years or more 0% period. EUROCURRENCY (3) In determining the reserve balance LIABILITIES 3% that is required to be maintained with the 3 Regulation D Federal Reserve, the daily average vault cash held during the computation period that ended 17 days prior to the beginning of the maintenance period is deducted from the amount of the institution’s re quired reserves. (d) Special rule for depository institutions that have total deposits o f less than $15 million. (1) A depository institution with total deposits of less than SIS million shall file a report of deposits once each calendar quarter for a seven-day computation pe riod that begins on the third Tuesday of a given month during the calendar quarter. Each Reserve Bank shall divide the de pository institutions in its District that qualify under this paragraph into three substantially equal groups and assign each group a different month to report during each calendar quarter. (2) Required reserves are computed on the basis of the depository institution’s daily average deposit balances during the seven-day computation period. In deter mining the reserve balance that a deposi tory institution is required to maintain with the Federal Reserve, the daily aver age vault cash held during the computa tion period is deducted from the amount of the institution’s required reserves. The reserve balance that is required to be maintained with the Federal Reserve shall be maintained during a correspond ing period that begins on the fourth Thursday following the end of the insti tution’s computation period and ends on the fourth Wednesday after the close of the institution’s next computation period. Such reserve balance shall be maintained in the amount required on a daily aver age basis during each week of the quar terly reserve maintenance period. (3) * • * (4) A depository institution that quali fies under this paragraph may elect at the beginning of a calendar year to report de posits on a weekly basis and maintain re serves during 14-day reserve maintenance 4 periods in accordance with paragraph (c) of this section. (h) Carryover o f excesses or deficiencies. (1) For a depository institution comput ing required reserves under paragraph (c) of this section, any excess or deficien cy in a required reserve balance for any maintenance period that does not exceed the greater of the percentage set forth in the schedule below of the institution’s re quired reserves (including required clear ing balances) or $25,000, shall be carried forward to the next maintenance period. Reserve maintenance periods occurring between Percentage applied to determine allowable carryover February 2, 1984 and August 1, 1984 3 August 2, 1984 and January 30, 1985 2i January 31, 1985 and forward 2 (2) For a depository institution report ing deposits and maintaining required reserves under paragraph (d) of this sec tion, any excess or deficiency in a re quired reserve balance for any mainte nance period that does not exceed the greater of 2 percent of the institution’s required reserves (including required clearing balances) or $25,000, shall be carried forward to the next maintenance period. (3) Any carryover not offset during the next period may not be carried forward to additional periods. a 9. Effective February 2, 1984, section 204.4 is amended by revising the schedule in para graph (a) as follows: SECTION 204.4— Transitional Adjustments Regulation D Resent maintenance periods occurring November 13,1980 to September 2,1981 September 3,1981 to September 1,1982 September 2, 1982 to August 31, 1983 September 1, 1983 to September 12, 1984 September 13, 1984 to September 11, 198S September 12, 1985 to September 10, 1986 September 11, 1986 to September 9,1987 September 10,1987 and forward Percentage that computed reserves will be reduced 87.5 75 62.5 50 37.5 25 12.5 0 . . 10. Effective February 2, 1984, the third sen tence o f section 204.7(a)(1) is amended by deleting the word “com putation"and insert ing the word “maintenance" in its place. 11. In section 204.4(b)(2), the second paren thetical citation is corrected to read ‘Y§ 204.9(b))" rather than *Y§ 204.8(b))". 5
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