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F ederal
reserve
Ba n k
DALLAS, TEXAS
of
Dallas
75222
Circular No. 82-73
June 24, 1982
REGULATION D
R e se r v e R eq u irem en ts o f D epository Institutions
R e v ised Pam phlet
TO THE CHIEF OPERATING OFFICER
OF ALL DEPOSITORY INSTITUTIONS IN THE
ELEVENTH FEDERAL RESERVE DISTRICT:
E nclosed are c o p ies o f a r evised R egu lation D pam phlet as
am ended e f f e c t i v e D e c e m b er 31, 1981 and a sum mary o f the la t e s t
am en d m en ts to R egulation D through April 29, 1982. As noted in the slips h e e t am endm ent, the R egulation D pam phlet dated March 1982 and the slipsh e e t am en dm ent dated May 1982 serve as a c o m p le te R egulation D. This
pam phlet r e p la c e s the previous printings o f this R egu lation to g eth e r with all
supplem ents and am en dm ents thereto.
The R egulation D pam phlet, dated
D e c e m b er 31, 1981, also includes the April 28, 1982 am en dm ents to the
R egulation which made perm anent the tw o -y ea r phase-in o f reserve re
quirem ents th at is accord ed to de novo depository institutions.
If you have any questions in this regard, please c o n ta c t Larry M.
Snell at the H ead O ffic e , (214) 651-6199; William L. Wilson at the El Paso
Branch, (915) 455-4730; Sam m ie C. Clay a t the Houston Branch, (713) 659
4433; or Thom as C. C ole at the San Antonio Branch, (512) 224-2141.
Additional c o p ies o f this circular and enclosu res will be furnished
upon request to the D ep artm en t o f C om m unications, Financial and C om m unity
A ffairs, Ext. 6289.
S in cerely yours,
William H. W allace
First Vice President
Enclosures
Banks and others are encouraged to use the following incoming W ATS 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 o f G overnors o f the Federal Reserve System
Regulation D
Reserve Requirements
of Depository Institutions
12 CFR 204; as amended effective December 31, 1981
Contents
Page
Page
Section 204.1—Authority, purpose
and scope..............................................
(a) A uthority......................................
(b) P u rp o se ........................................
(c) S co p e............................................
Section 204.2—Definitions......................
(a) Deposit..........................................
(b) Demand deposit ..........................
(c) Time d e p o sit................................
(d) Savings d e p o sit............................
(e) Transaction acco un t....................
(f) Nonpersonal time deposit............
(g) Natural person..............................
(h) Eurocurrency liabilities................
(i) Cash items in process of collection
(j) Net transaction acco u n ts............
(k) Vault c a s h ....................................
(/) Pass-through account..................
(m) Depository institution..................
(n) Member bank................................
(0) Foreign b a n k ................................
(p) De novo depository institution. . .
(q) Affiliate ........................................
(r) United States................................
(s) United States resident..................
(t) Any deposit that is payable only
at an office located outside the
United States................................
Section 204.3—Computation and
maintenance..........................................
(a) Maintenance of requiredreserves.
(b) Form of reserves..........................
(c) Computation of requiredreserves
(d) Special rule for depository
institutions that have total
deposits of less than $15 million..
(e) Computation of transaction
accounts........................................
(f) Deductions allowed in computing
reserves..........................................
(g) Availability of cash items as
reserves..........................................
(h) Carryover of deficiencies..............
(1) Pass-through rules........................
1
1
1
1
1
1
4
4
4
5
5
6
6
7
7
7
8
8
8
8
8
8
9
9
9
9
9
10
10
10
11
11
11
11
11
Section 204.4—Transitional
adjustm ents..........................................
(a) Nonmembers...............................
(b) Members and former members ..
(c) Certain nonmembers and
branches and agencies of foreign
b a n k s ............................................
(d) New m em bers.............................
(e) De novo institutions...................
( 0 Nonmember depository
institutions with offices in Hawaii
(g) Mergers and consolidations.......
14
14
14
15
15
16
16
16
Section 204.5—Emergency reserve
requirem ent..........................................
(a) Finding by Board .......................
(b) Term .............................................
(c) Reports to C ongress...................
(d) Reserve requirem ents.................
18
18
18
18
18
Section 204.6—Supplemental reserve
requirem ent..........................................
(a) Finding by B o a rd .......................
(b) Term .............................................
(c) Earnings Participation Account..
(d) Report to Congress.....................
(e) Reserve requirem ents.................
18
18
18
18
19
19
Section 204.7—Penalties..........................
(a) Penalties for deficiencies.............
(b) Penalties for violations...............
19
19
19
Section 204.8—International banking
facilities................................................
(a) Definitions....................................
(b) Acknowledgement of IBF
deposits and extensions of credit .
(c) Exemption from reserve
requirem ents................................
(d) Establishment of an international
banking facility............................
(e) Notification to Federal Reserve ..
(f) Recordkeeping requirem ents---Section 204.9—Supplement: Reserve
requirement ratios................................
(a) Reserve percentages...................
19
19
20
21
21
21
21
21
21
Contents
Regulation D
Page
(b) Reserve ratios in effect during last
computation period prior to
September 1,1980 ........................
Federal Reserve Act
Section 19..............................................
Page
21
Section 11 (c) and ( e ) ..........................
Section 25..............................................
Section 2 5 (a ).........................................
28
28
29
23
International Banking Act of 1978
Section 7 .................................................
31
Regulation D
Reserve Requirements of Depository Institutions
12 CFR 204; effective December 24, 1980; as amended effective December 31, 1981
SECTION 204.1—Authority, Purpose
and Scope
(a) Authority. This part* is issued under the
authority of section 19 (12 USC 461 et seq.)
and other provisions of the Federal Reserve
Act and of section 7 of the International
Banking Act of 1978 (12 USC 3105).
(b) Purpose. This part relates to reserves that
depository institutions are required to main
tain for the purpose of facilitating the imple
mentation of monetary policy by the Federal
Reserve System.
(c) Scope. (1) The following depository in
stitutions are required to maintain reserves
in accordance with this part:
(i) Any insured bank as defined in sec
tion 3 of the Federal Deposit Insurance
Act (12 USC 1813(h)) or any bank that
is eligible to apply to become an insured
bank under section S of such act (12
USC 1815);
(ii) Any savings bank or mutual savings
bank as defined in section 3 of the Feder
al Deposit Insurance Act (12 USC
1813(0. (g));
(iii) Any insured credit union as defined
in section 101 of the Federal Credit Un
ion Act (12 USC 1752(7)) or any credit
union that is eligible to apply to become
an insured credit union under section 201
of such act (12 USC 1781);
(iv) Any member as defined in section 2
of the Federal Home Loan Bank Act (12
USC 1422(4)); and
(v) Any insured institution as defined in
section 401 of the National Housing Act
(12 USC 1724(a)) or any institution
which is eligible to apply to become an
insured institution under section 403 of
such act (12 USC 1726).
(2) Except as may be otherwise provided
by the Board, a foreign bank’s branch or
agency located in the United States is re♦ T h e w ords “ this p a r t,” as used herein, m ean Regulation
D (C o d e o f F ederal R egulations, title 12, c h a p te r II , p art
20 4 ).
quired to comply with the provisions of this
part in the same manner and to the same
extent as if the branch or agency were a
member bank, if its parent foreign bank (i)
has total worldwide consolidated bank as
sets in excess of $1 billion; or (ii) is con
trolled by a foreign company or by a group
of foreign companies that own or control
foreign banks that in the aggregate have to
tal worldwide consolidated bank assets in
excess of $ 1 billion. In addition, any other
foreign bank’s branch located in the United
States that is eligible to apply to become an
insured bank under section 5 of the Federal
Deposit Insurance Act (12 USC 1815) is
required to maintain reserves in accordance
with this part as a nonmember depository
institution.
(3) Except as may be otherwise provided
by the Board, an Edge corporation (12
USC 611 et seq.) or an agreement corpora
tion (12 USC 601 et seq.) is required to
comply with the provisions of this part in
the same manner and to the same extent as
a member bank.
(4) This part does not apply to any finan
cial institution that (i) is organized solely
to do business with other financial institu
tions; (ii) is owned primarily by the finan
cial institutions with which it does business;
and (iii) does not do business with the gen
eral public.
(5) The provisions of this part do not ap
ply to any deposit that is payable only at an
office located outside the United States.
SECTION 204.2—Definitions
For purposes of this part, the following defini
tions apply unless otherwise specified:
(a) (1) “Deposit” means:
(i) the unpaid balance of money or its
equivalent received or held by a deposito
ry institution in the usual course of busi
ness and for which it has given or is obli
gated to give credit, either conditionally
or unconditionally, to an account, includ1
§204.2
ing interest credited, or which is evi
denced by an instrument on which the
depository institution is primarily liable;
(ii) money received or held by a deposi
tory institution, or the credit given for
money or its equivalent received or held
by the depository institution in the usual
course of business for a special or specific
purpose, regardless of the legal relation
ships established thereby, including es
crow funds, funds held as security for
securities loaned by the depository insti
tution, funds deposited as advance pay
ment on subscriptions to United States
government securities, and funds held to
meet its acceptances;
(iii) an outstanding draft, cashier’s
check, money order, or officer’s check
drawn on the depository institution and
issued in the usual course of business for
any purpose, including payment for ser
vices, dividends, or purchases;
(iv) any due bill or other liability or un
dertaking on the part of a depository in
stitution to sell or deliver securities to, or
purchase securities for the account of,
any customer (including another deposi
tory institution), involving either the
receipt of funds by the depository institu
tion, regardless of the use of the pro
ceeds, or a debit to an account of the cus
tomer before the securities are delivered.
A deposit arises thereafter, if after three
business days from the date of issuance of
the obligation, the depository institution
does not deliver the securities purchased
or does not fully collateralize its obliga
tion with securities similar to the securi
ties purchased. A security is similar if it
is of the same type and if it is of compara
ble maturity to that purchased by the
customer;
(v) any liability of a depository institu
tion’s affiliate that is not a depository in
stitution, on any promissory note, ac
knowledgment of advance, due bill, or
similar obligation (written or oral), with
a maturity of less than four years, to the
extent that the proceeds are used to sup
ply or to maintain the availability of
funds (other than capital) to the deposi
tory institution, except any such obliga
Regulation D
tion that, had it been issued directly by
the depository institution, would not con
stitute a deposit. If an obligation of an
affiliate of a depository institution is
regarded as a deposit and is used to pur
chase assets from the depository institu
tion, the maturity of the deposit is deter
mined by the shorter of the maturity of
the obligation issued or the remaining
maturity of the assets purchased. If the
proceeds from an affiliate’s obligation are
placed in the depository institution in the
form of a reservable deposit, no reserves
need be maintained against the obligation
of the affiliate since reserves are required
to be maintained against the deposit is
sued by the depository institution. How
ever, the maturity of the deposit issued to
the affiliate shall be the shorter of the ma
turity of the affiliate’s obligation or the
maturity of the deposit;
(vi) credit balances;
(vii) any liability of a depository institu
tion on any promissory note, acknowl
edgment of advance, banker’s accept
ance, or similar obligation (written or
oral), including mortgage-backed bonds,
that is issued or undertaken by a deposi
tory institution as a means of obtaining
funds, except any such obligation that:
(A ) is issued or undertaken and held
for the account of:
(1) an office located in the United
States of another depository institu
tion, foreign bank, Edge or Agree
ment Corporation, or New York In
vestment (Article X II) Company;
(2) the United States government
or an agency thereof; or
(3) the Export-Import Bank of the
United States, Minbanc Capital Cor
poration, the Government Develop
ment Bank for Puerto Rico, a Feder
al Reserve Bank, a Federal Home
Loan Bank, or the National Credit
Union Administration Central Li
quidity Facility;
(B) arises from a transfer of direct ob
ligations of, or obligations that are ful
ly guaranteed as to principal and inter
est by, the United States government
or any agency thereof that the de
Regulation D
pository institution is obligated to
repurchase;
(C) is not insured by a federal agency,
is subordinated to the claims of deposi
tors, has a weighted average maturity
of seven years or more, is not subject
to federal interest rate limitations, and
is issued by a depository institution
with the approval of, or under the
rules and regulations of, its primary
federal supervisor;
(D ) arises from a borrowing by a de
pository institution from a dealer in se
curities, for one business day, of pro
ceeds of a transfer of deposit credit in a
Federal Reserve Bank or other imme
diately available funds, (commonly re
ferred to as “federal funds” ), received
by such dealer on the date of the loan
in connection with clearance of securi
ties transactions; or
(E) arises from the creation, discount
and subsequent sale by a depository in
stitution of its banker’s acceptance of
the type described in paragraph 7 of
section 13 of the Federal Reserve Act
(12 USC 372).
(2)
“Deposit" does not include:
(i) trust funds received or held by the
depository institution that it keeps prop
erly segregated as trust funds and apart
from its general assets or which it depos
its in another institution to the credit of
itself as trustee or other fiduciary. If trust
funds are deposited with the commercial
department of the depository institution
or otherwise mingled with its general as
sets, a deposit liability of the institution is
created;
(ii) an obligation that represents a con
ditional, contingent or endorser’s
liability;
(iii) obligations, the proceeds of which
are not used by the depository institution
for purposes of making loans, invest
ments, or maintaining liquid assets such
as cash or “due from” depository institu
tions or other similar purposes. An obli
gation issued for the purpose of raising
funds to purchase business premises,
equipment, supplies, or similar assets is
not a deposit;
§204.2
(iv) accounts payable;
(v) hypothecated “deposits” created by
payments on an installment loan where
(A ) the amounts received are not used
immediately to reduce the unpaid bal
ance due on the loan until the sum of the
payments equals the entire amount of
loan principal and interest; (B) and
where such amounts are irrevocably as
signed to the depository institution and
cannot be reached by the borrower or
creditors of the borrower;
(vi) dealer reserve and differential ac
counts that arise from the financing of
dealer installment accounts receivable,
and which provide that the dealer may
not have access to the funds in the ac
count until the installment loans are re
paid, as long as the depository institution
is not actually (as distinguished from
contingently) obligated to make credit or
funds available to the dealer;
(vii) a dividend declared by a depository
institution for the period intervening be
tween the date of the declaration of the
dividend and the date on which it is paid;
(viii) an obligation representing a “pass
through account,” as defined in this
section;
(ix) an obligation arising from the reten
tion by the depository institution of no
more than a 10 percent interest in a pool
of conventional one- to four-family mort
gages that are sold to third parties;
(x) an obligation issued to a state or mu
nicipal housing authority under a loanto-lender program involving the issuance
of tax exempt bonds and the subsequent
lending of the proceeds to the depository
institution for housing finance purposes;
(xi) shares of a credit union held by the
National Credit Union Administration or
the National Credit Union Administra
tion Central Liquidity Facility under a
statutorily authorized assistance pro
gram; and
(xii) any liability of a United States
branch or agency of a foreign bank to an
other United States branch or agency of
the same foreign bank, or the liability of
the United States office of an Edge corpo3
§204.2
ration to another United States office of
the same Edge corporation.
(b) ( 1) “Demand deposit" means a deposit
that is payable on demand, or a deposit is
sued with an original maturity or required
notice period of less than 14 days, or a de
posit representing funds for which the de
pository institution does not reserve the
right to require at least 14 days’ written no
tice of an intended withdrawal. The term
includes all deposits other than time and
savings deposits. Demand deposits may be
in the form of (i) checking accounts; (ii)
certified, cashier’s and officer’s checks (in
cluding checks issued by the depository in
stitution in payment of dividends); (iii)
traveler’s checks and money orders that are
primary obligations of the issuing institu
tion; (iv) checks or drafts drawn by, or on
behalf of, a non-United States office of a de
pository institution on an account main
tained at any of the institution’s United
States offices; (v) letters of credit sold for
cash or its equivalent; (vi) withheld taxes,
withheld insurance and other withheld
funds; (vii) time deposits that have ma
tured or time deposits upon which the re
quired notice of withdrawal period has ex
pired and which have not been renewed
(either by action of the depositor or auto
matically under the terms of the deposit
agreement); and (viii) an obligation to pay
on demand or within 14 days a check (or
other instrument, device, or arrangement
for the transfer of funds) drawn on the de
pository institution, where the account of
the institution’s customer already has been
debited. The term does not include an obli
gation that is a time deposit under section
204.2(c) ( l) ( ii) .
(2) A “demand deposit” does not include
checks or drafts drawn by the depository
institution on the Federal Reserve or on an
other depository institution.
(c) (1) “Time deposit" means (i) a deposit
that the depositor does not have a right
to withdraw for a period of 14 days or
more after the date of deposit. “Time de
posit” includes funds:
(A ) payable on a specified date not
less than 14 days after the date of
deposit;
Regulation D
(B) payable at the expiration of a
specified time not less than 14 days af
ter the date of deposit;
(C) payable upon written notice
which actually is required to be given
by the depositor not less than 14 days
before the date of repayment;
(D ) such as “Christmas club” ac
counts and “vacation club” accounts,
that are deposited under written con
tracts providing that no withdrawal
shall be made until a certain number of
periodic deposits have been made dur
ing a period of not less than three
months even though some of the de
posits may be made within 14 days
from the end of the period; or
(E) that constitute a “savings depos
it” which is not regarded as a “transac
tion account.”
(ii) borrowings, regardless of maturity,
represented by a promissory note, an ac
knowledgment of advance, or similar ob
ligation described in section 204.2(a)(1)
(vii) that is issued to any office located
outside the United States of another de
pository institution or Edge or agreement
corporation organized under the laws of
the United States, to any office located
outside the United States of a foreign
bank, or to institutions whose time de
posits are exempt from interest rate limi
tations under section 217.3(g) of Regula
tion Q (12 CFR 217.3(g)).
(2) A time deposit may be represented by
a transferable or nontransferable, or a nego
tiable or nonnegotiable, certificate, instru
ment, passbook, statement, or otherwise. A
“time deposit” includes share certificates
and certificates of indebtedness issued by
credit unions, and certificate accounts and
notice accounts issued by savings and loan
associations.
(d) (1) “Savings deposit" means a deposit or
account with respect to which the depositor
is not required by the deposit contract but
may at any time be required by the deposi
tory institution to give written notice of an
intended withdrawal not less than 14 days
before withdrawal is made, and that is not
payable on a specified date or at the expira
tion of a specified time after the date of
Regulation D
deposit. A deposit may continue to be clas
sified as a savings deposit even if the deposi
tory institution exercises its right to require
notice of withdrawal. A “savings deposit”
includes a regular share account at a credit
union and a regular account at a savings
and loan association.
(2) For depository institutions subject to
12 CFR part 217 or 12 CFR part 329,
funds deposited to the credit of, or in which
any beneficial interest is held by, a corpora
tion, association, partnership or other orga
nization operated for profit may be classi
fied as a savings deposit if such funds do not
exceed $150,000 per depositor at the depos
itory institution.
(3) “Savings deposit” does not include
funds deposited to the credit of the deposi
tory institution’s own trust department
where the funds involved are utilized to
cover checks or drafts. Such funds are
“transaction accounts.”
(e) “Transaction account” means a deposit
or account on which the depositor or account
holder is permitted to make withdrawals by
negotiable or transferable instrument, pay
ment orders of withdrawal, telephone trans
fers, or other similar device for the purpose of
making payments or transfers to third persons
or others. “Transaction account” includes:
( 1) demand deposits;
( 2) deposits or accounts subject to check,
draft, negotiable order of withdrawal, share
draft, or other similar item;
(3) savings deposits or accounts in which
withdrawals may be made automatically
through payment to the depository insti
tution itself or through transfer of credit
to a demand deposit or other account in
order to cover checks or drafts drawn upon
the institution or to maintain a specified
balance in, or to make periodic transfers
to, such accounts (automatic transfer
accounts);
(4) deposits or accounts in which pay
ments may be made to third parties by
means of an automated teller machine, re
mote service unit or other electronic device;
and
(5) deposits or accounts in which pay
ments may be made to third parties by
means of a debit card;
§204.2
( 6) deposits or accounts under the terms
of which, or which by practice of the depos
itory institution, the depositor is permitted
or authorized to make more than three
withdrawals per month for purposes of
transferring funds to another account or for
making a payment to a third party by
means of preauthorized or telephone agree
ment, order or instruction. An account that
permits or authorizes more than three such
withdrawals in a calendar month, or state
ment cycle (or similar period) of at least
four weeks, is a “transaction account”
whether or not more than three such with
drawals actually are made during such peri
od. A “preauthorized transfer” includes
any arrangement by the depository institu
tion 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 depository institution
to pay a third party from the account of the
depositor at a predetermined time or on a
fixed schedule. An account is not a “trans
action account” by virtue of an arrange
ment that permits withdrawals for the pur
pose of repaying loans and associated
expenses at the same depository institution
(as originator or servicer).
(f) (1) “Nonpersonal time deposit” means:
(i) a time deposit, including a savings
deposit, that is not a transaction account,
representing funds in which any benefi
cial interest is held by a depositor which
is not a natural person;
(ii) a time deposit, including a savings
deposit that is not a transaction account,
that represents funds deposited to the
credit of a depositor that is not a natural
person, other than a deposit to the credit
of a trustee or other fiduciary if the entire
beneficial interest in the deposit is held by
one or more natural persons;
(iii) a time deposit that is transferable,
except a time deposit originally issued be
fore October 1, 1980, to and held by one
or more natural persons, including a de
posit to the credit of a trustee or other
fiduciary if the entire beneficial interest in
the deposit is held by one or more natural
persons;
5
§204.2
(iv) a time deposit that is transferable,
issued on or after October 1, 1980, to and
held by one or more natural persons, in
cluding a deposit to the credit of a trustee
or other fiduciary if the entire beneficial
interest is held by one or more natural
persons. A time deposit is transferable
unless it contains a specific statement on
the certificate, instrument, passbook,
statement or other form representing the
account that it is not transferable. A time
deposit that contains a specific statement
that it is not transferable is not regarded
as transferable even if the following
transactions can be effected: a pledge as
collateral for a loan; a transaction that
occurs due to circumstances arising from
death, incompetency, marriage, divorce,
attachment or otherwise by operation of
law or a transfer on the books or records
of the institution; and
(v) a time deposit represented by a
promissory note, an acknowledgment of
advance, or a similar obligation described
in section 204.2(a)(l)(vii) that is issued
to any office located outside the United
States of another depository institution
or Edge or agreement corporation orga
nized under the laws of the United States,
to any office located outside the United
States of a foreign bank, or to institutions
whose time deposits are exempt from in
terest rate limitations under section
217.3(g) of Regulation Q (12 CFR
217.3(g)).
(2) “Nonpersonal time deposit” does not
include nontransferable time deposits to the
credit of or in which the entire beneficial
interest is held by an individual pursuant to
an individual retirement account or Keogh
(H. R. 10) plan under 26 USC (IRC 1954)
408, 401, or nontransferable time deposits
held by an employer as part of an unfunded
deferred-compensation plan established
pursuant to subtitle D of the Revenue Act of
1978 (Pub. L. No. 95-600, 92 Stat. 2763).
(g) “Naturalperson” means an individual or
a sole proprietorship. The term does not mean
a corporation owned by an individual, a part
nership or other association.
(h) “Eurocurrency liabilities” means:
(1) For a depository institution or an Edge
6
Regulation D
or agreement corporation organized under
the laws of the United States, the sum, if
positive, of the following:
(i) net balances due to its non-United
States offices and its international bank
ing facilities ( “IBFs” ) from its United
States offices;
(ii) (A ) for a depository institution or
ganized under the laws of the United
States, assets (including participa
tions) acquired from its United States
offices and held by its non-United
States offices, by its IBF, or by non
United States offices of an affiliated
Edge or agreement corporation ;1 or
(B) for an Edge or agreement corpo
ration, assets (including participa
tions) acquired from its United States
offices and held by its non-United
States offices, by its IBF, by non-Unit
ed States offices of its U. S. or foreign
parent institution, or by non-United
States offices of an affiliated Edge or
agreement corporation ;1 and
(iii) credit outstanding from its non
United States offices to United States res
idents (other than assets acquired and
net balances due from its United States
offices), except credit extended (A) from
its non-United States offices in the aggre
gate amount of $ 100,000 or less to any
United States resident, (B) by a non
United States office that at no time dur
ing the computation period had credit
outstanding to United States residents ex
ceeding $1 million, (C) to an interna
tional banking facility, or (D ) to an insti
tution that will be maintaining reserves
on such credit pursuant to this part.
Credit extended from non-United States
offices or from IBFs to a foreign branch,
office, subsidiary, affiliate, or other for
eign establishment (“foreign affiliate”)
controlled by one or more domestic cor
porations is not regarded as credit ex
tended to a United States resident if the
proceeds will be used to finance the oper
1This subparagraph does not apply to assets (1) that
were acquired before October 7, 1979, or (2) that were
acquired by an IBF from its establishing entity before the
end of the fourth reserve computation period after its
establishment.
Regulation D
§204.2
(iii) such other items in the process of
ations outside the United States of the
collection, that are payable immediately
borrower or of other foreign affiliates of
upon presentation in the United States
the controlling domestic corporation(s).
and that are customarily cleared or col
(2) For a United States branch or agency
lected by depository institutions as cash
of a foreign bank, the sum, if positive, of the
following:
items, including;
(A) drafts payable through another
(i) net balances due to its foreign bank
depository institution;
(including offices thereof located outside
(B) redeemed bonds and coupons;
the United States) and its international
(C) food coupons and certificates;
banking facility after deducting an
(D ) postal and other money orders,
amount equal to 8 percent of the follow
and traveler’s checks;
ing: the United States branch’s or agen
(E) amounts credited to deposit ac
cy’s total assets less the sum of (A ) cash
counts in connection with automated
items in process of collection; (B) un
payment arrangements where such
posted debits; (C) demand balances due
credits are made one business day pri
from depository institutions organized
or to the scheduled payment date to
under the laws of the United States and
insure that funds are available on the
from other foreign banks; (D ) balances
payment date;
due from foreign central banks; and (E)
(F) commodity or bill of lading drafts
positive net balances due from its IBF, its
payable immediately upon presenta
foreign bank, and the foreign bank’s
tion in the United States;
United States and non-United States of
(G ) returned items and unposted deb
fices; and
(ii) assets (including participations) ac
its; and
(H ) broker security drafts.
quired from the United States branch or
(2) “Cash item in process of collection”
agency (other than assets required to be
does not include items handled as noncash
sold by federal or state supervisory au
collections and credit card sales slips and
thorities) and held by its foreign bank
(including offices thereof located outside
drafts.
the United States), by its parent holding
company, by non-United States offices or (j) “Net transaction accounts” means the to
an IBF of an affiliated Edge or agreement tal amount of a depository institution’s trans
action accounts less the deductions allowed
corporation, or by its IBFs .1
under the provisions of section 204.3.
(i) (1) “Cash item in process o f collection”
means:
(k) (1) “Vault cash” means United States
(i) checks in the process of collection,
currency and coin owned and held by a de
drawn on a bank or other depository in
pository institution that may, at any time,
stitution that are payable immediately
be used to satisfy depositors’ claims.
upon presentation in the United States,
(2) “Vault cash” includes United States
including checks forwarded to a Federal
currency and coin in transit to a Federal
Reserve Bank in process of collection and
Reserve Bank or a correspondent deposito
checks on hand that will be presented for
ry institution for which the reporting de
payment or forwarded for collection on
pository institution has not yet received
the following business day;
credit, and United States currency and coin
(ii) government checks drawn on the
in transit from a Federal Reserve Bank or a
Treasury of the United States that are in
correspondent depository institution when
the process of collection; and
the reporting depository institution’s ac
count at the Federal Reserve or correspon
dent bank has been charged for such
1 This subparagraph does not apply to assets (1) that
were acquired before October 7, 1979, or (2) that were
shipment.
acquired by an IBF from its establishing entity before the
(3) Silver and gold coin and other curren
end of the fourth reserve computation period after its
cy and coin whose numismatic or bullion
establishment.
7
§204.2
value is substantially in excess of face value
is not vault cash for purposes of this part.
(/) “Pass-through account" means a balance
maintained by a depository institution that is
not a member bank, by a U.S. branch or agen
cy of a foreign bank, or by an Edge or agree
ment corporation, ( 1) in an institution that
maintains required reserve balances at a Fed
eral Reserve Bank, (2) in a Federal Home
Loan Bank, (3) in the National Credit Union
Administration Central Liquidity Facility, or
(4) in an institution that has been authorized
by the Board to pass through required reserve
balances if the institution, Federal Home
Loan Bank, or National Credit Union Admin
istration Central Liquidity Facility maintains
the funds in the form of a balance in a Federal
Reserve Bank of which it is a member or at
which it maintains an account in accordance
with rules and regulations of the Board.
(m) (1) “Depository institution" means:
(i) any insured bank as defined in sec
tion 3 of the Federal Deposit Insurance
Act (12 USC 1813(h)) or any bank that
is eligible to apply to become an insured
bank under section 5 of such act (12
USC 1815);
(ii) any savings bank or mutual savings
bank as defined in section 3 of the Feder
al Deposit Insurance Act (12 USC
1813(f), (g));
(iii) any insured credit union as defined
in section 101 of the Federal Credit Un
ion Act (12 USC 1752(7)) or any credit
union that is eligible to apply to become
an insured credit union under section 201
of such act (12 USC 1781);
(iv) any member as defined in section 2
of the Federal Home Loan Bank Act (12
USC 1422(4)); and
(v) any insured institution as defined in
section 401 of the National Housing Act
(12 USC 1724(a)) or any institution
which is eligible to apply to become an
insured institution under section 403 of
such act (12 USC 1726).
(2) “Depository institution” does not in
clude international organizations such as
the World Bank, the Inter-American De
velopment Bank, and the Asian Develop
ment Bank.
8
Regulation D
(n) “Member bank” means a depository in
stitution that is a member of the Federal Re
serve System.
(o) “Foreign bank” means any bank or other
similar institution organized under the laws of
any country other than the United States or
organized under the laws of Puerto Rico,
Guam, American Samoa, the Virgin Islands,
or other territory or possession of the United
States.
(p) “De novo depository institution ” means a
depository institution that was not engaged in
business on July 1, 1979, and is not the suc
cessor by merger or consolidation to a deposi
tory institution that was engaged in business
prior to the date of merger or consolidation.
(q) “Affiliate” includes any corporation, as
sociation, or other organization:
( 1) of which a depository institution, di
rectly or indirectly, owns or controls either
a majority of the voting shares or more than
50 percent of the numbers of shares voted
for the election of its directors, trustees, or
other persons exercising similar functions at
the preceding election, or controls in any
manner the election of a majority of its di
rectors, trustees, or other persons exercising
similar functions;
( 2) of which control is held, directly or in
directly, through stock ownership or in any
other manner, by the shareholders of a de
pository institution or more than 50 percent
of the number of shares voted for the elec
tion of directors of such depository institu
tion at the preceding election, or by trustees
for the benefit of the shareholders of any
such depository institution;
(3) of which a majority of its directors,
trustees, or other persons exercising similar
functions are directors of any one deposito
ry institution; or
(4) which owns or controls, directly or in
directly, either a majority of the shares of
capital stock of a depository institution or
more than 50 percent of the number of
shares voted for the election of directors,
trustees or other persons exercising similar
functions of a depository institution at the
preceding election, or controls in any man
ner the election of a majority of the direc
tors, trustees, or other persons exercising
Regulation D
similar functions of a depository institution,
or for the benefit of whose shareholders or
members all or substantially all the capital
stock of a depository institution is held by
trustees.
(r) “United States” means the states of the
United States and the District of Columbia.
(s) “United States resident” means (1) any
individual residing (at the time of the transac
tion) in the United States; (2) any corpora
tion, partnership, association or other entity
organized in the United States ( “domestic
corporation”); and (3) any branch or office
located in the United States of any entity that
is not organized in the United States.
(t) “Any deposit that is payable only at an of
fice located outside the United States” means
(1) a deposit of a United States resident 2 that
is in a denomination of $ 100,000 or more, and
as to which the depositor is entitled, under the
agreement with the institution, to demand
payment only outside the United States or (2)
a deposit of a person who is not a United
States resident 2 as to which the depositor is
entitled, under the agreement with the institu
tion, to demand payment only outside the
United States.
SECTION 204.3—Computation and
Maintenance
(a) Maintenance o f required reserves. A de
pository institution, a U.S. branch or agency
of a foreign bank, and an Edge or agreement
corporation shall maintain reserves against its
deposits and Eurocurrency liabilities in ac
cordance with the procedures prescribed in
this section and section 204.4 and the ratios
prescribed in section 204.9. Penalties shall be
assessed for deficiencies in required reserves in
accordance with the provisions of section
204.7. Every institution holding transaction
2 A deposit of a foreign branch, office, subsidiary, affiliate
or other foreign establishment ("fo reig n affiliate” ) con
trolled by one or more domestic corporations is not regard
ed as a deposit of a United States resident if the funds serve
a purpose in connection with its foreign or international
business or that of other foreign affiliates of the controlling
domestic corporation(s).
§204.3
accounts or nonpersonal time deposits shall
file a report of deposits each week with the
Federal Reserve Bank of its District (see sec
tion 204.3(d) for the special rule for deposito
ry institutions with total deposits of less than
$15 million) and any other reports that the
Board may require by rule, regulation or or
der. For purposes of this part, the obligations
of a majority-owned (50 percent or more)
U.S. subsidiary (except an Edge or agreement
corporation) of a depository institution shall
be regarded as obligations of the parent depos
itory institution.
(1) United States branches and agencies o f
foreign banks.
(i) A foreign bank’s United States
branches and agencies operating within
the same state and within the same Fed
eral Reserve District shall prepare and
file a report of deposits on an aggregated
basis.
(ii) United States branches and agencies
of the same foreign bank shall, if possible,
assign the low reserve tranche on trans
action accounts (§ 204.9(a)) to only one
office or to a group of offices filing a sin
gle aggregated report of deposits. If the
low reserve tranche cannot be fully uti
lized by a single office or by a group of
offices filing a single report of deposits,
the unused portion of the tranche may be
assigned to other offices of the same for
eign bank until the amount of the tranche
or net transaction accounts is exhausted.
The foreign bank shall determine this as
signment subject to the restriction that if
a portion of the tranche is assigned to an
office in a particular state, any unused
portion must first be assigned to other of
fices located within the same state and
within the same Federal Reserve District,
that is, to other offices included on the
same aggregated report of deposits. If
necessary in order to avoid underutiliza
tion of the low reserve tranche, the allo
cation may be changed at the beginning
of a calendar month. Under other cir
cumstances, the low reserve tranche may
be reallocated at the beginning of a calen
dar year.
(2) Edge and agreement corporations.
(i) An Edge or agreement corporation’s
§ 204.3
offices operating within the same state
and within the same Federal Reserve
District shall prepare and file a report of
deposits on an aggregated basis.
(ii) An Edge or agreement corporation
shall, if possible, assign the low
reserve tranche on transaction accounts
(§ 204.9(a)) to only one office or to a
group of offices filing a single aggregated
report of deposits. If the low reserve
tranche cannot be fully utilized by a sin
gle office or by a group of offices filing a
single report of deposits, the unused por
tion of the tranche may be assigned to
other offices of the same institution until
the amount of the tranche or net transac
tion accounts is exhausted. An Edge or
agreement corporation shall determine
this assignment subject to the restriction
that if a portion of the tranche is assigned
to an office in a particular state, any un
used portion must first be assigned to
other offices located within the same state
and within the same Federal Reserve
District, that is, to other offices included
on the same aggregated report of depos
its. If necessary in order to avoid under
utilization of the low reserve tranche, the
allocation may be changed at the begin
ning of a calendar month. Under other
circumstances, the low reserve tranche
may be reallocated at the beginning of a
calendar year.
(b) Form o f reserves. Reserves shall be held
in the form of (i) vault cash, (ii) a balance
maintained directly with the Federal Reserve
Bank in the District in which it is located, or
(iii) a pass-through account. Reserves held in
the form of a pass-through account shall be
considered to be a balance maintained with
the Federal Reserve.
(c) Computation o f required reserves. Re
quired reserves are computed on the basis of
the daily average deposit balances during a
seven-day period ending each Wednesday
(the “computation period” ). Reserve require
ments are computed by applying the ratios
prescribed in section 204.9 to the classes of
deposits and Eurocurrency liabilities of the in
stitution. In determining the reserve balance
that is required to be maintained with the
10
Regulation-D
Federal Reserve, the average daily vault cash
held during the computation period is deduct
ed from the amount of the institution’s re
quired reserves. The reserve balance that is re
quired to be maintained with the Federal
Reserve shall be maintained during a corre
sponding seven-day period (the “maintenance
period” ) which begins on the second Thurs
day following the end of a given computation
period.
(d) Special rule for depository institutions that
have total deposits o f less than $15 million.
(1) A depository institution with total de
posits of less than $15 million shall file a
report of deposits once each calendar quar
ter for a seven-day computation period that
begins on the third Thursday of a given
month during the calendar quarter. Each
Reserve Bank shall divide the depository in
stitutions in its District that qualify under
this paragraph into three substantially
equal groups and assign each group a differ
ent month to report during each calendar
quarter.
(2) Required reserves are computed on the
basis of the depository institution’s daily av
erage deposit balances during the seven-day
computation period. In determining the re
serve balance that a depository institution is
required to maintain with the Federal Re
serve, the average daily vault cash held dur
ing the computation period is deducted
from the amount of the institution’s re
quired reserves. The reserve balance that is
required to be maintained with the Federal
Reserve shall be maintained during a corre
sponding period that begins on the fourth
Thursday following the end of the institu
tion’s computation period and ends on the
third Wednesday after the close of the insti
tution’s next computation period. Such re
serve balance shall be maintained in the
amount required on a daily average basis
during each week of the quarterly reserve
maintenance period.
(3) A depository institution that has less
than $15 million in total deposits as of De
cember 31, 1979, shall qualify under this
paragraph until it reports total deposits of
$15 million or more for two consecutive
calendar quarters.
Regulation D
(4) A depository institution that qualifies
under this paragraph may elect at the be
ginning of a calendar year to report deposits
and maintain reserves on a weekly basis.
(5) This paragraph shall not apply to an
Edge or agreement corporation or a United
States branch or agency of a foreign bank.
(e) Computation o f transaction accounts.
Overdrafts in demand deposit or other trans
action accounts are not to be treated as nega
tive demand deposits or negative transaction
accounts and shall not be netted since over
drafts are properly reflected on an institution’s
books as assets. However, where a customer
maintains multiple transaction accounts with
a depository institution, overdrafts in one ac
count pursuant to a bona fide cash manage
ment arrangement are permitted to be netted
against balances in other related transaction
accounts for reserve requirement purposes.
(f) Deductions allowed in computing reserves.
(1) In determining the reserve balance re
quired under this part, the amount of cash
items in process of collection and balances
subject to immediate withdrawal due from
other depository institutions located in the
United States (including such amounts due
from United States branches and agencies
of foreign banks and Edge and agreement
corporations) may be deducted from the
amount of gross transaction accounts. The
amount that may be deducted may not ex
ceed the amount of gross transaction ac
counts. However, if a depository institution
maintains any transaction accounts that are
first authorized under federal law after
April 1, 1980, it may deduct from these bal
ances cash items in process of collection
and balances subject to immediate with
drawal due from other depository institu
tions located in the United States only to
the extent of the proportion that such newly
authorized transaction accounts are of the
institution’s total transaction accounts. The
remaining cash items in process of collec
tion and balances subject to immediate
withdrawal due from other depository insti
tutions located in the United States shall be
deducted from the institution’s remaining
transaction accounts.
(2) United States branches and agencies of
§204.3
a foreign bank may not deduct balances due
from another United States branch or agen
cy of the same foreign bank, and United
States offices of an Edge or agreement cor
poration may not deduct balances due from
another United States office of the same
Edge corporation.
(3) Balances “due from other depository
institutions” do not include balances due
from Federal Reserve Banks, pass-through
accounts, or balances (payable in dollars or
otherwise) due from banking offices located
outside the United States. An institution ex
ercising fiduciary powers may not include
in “balances due from other depository in
stitutions” amounts of trust funds deposited
with other banks and due to it as a trustee
or other fiduciary.
(g) Availability o f cash items as reserves. Cash
items forwarded to a Federal Reserve Bank
for collection and credit shall not be counted
as part of the reserve balance to be carried
with the Federal Reserve until the expiration
of the time specified in the appropriate time
schedule established under Regulation J,
“Collection of Checks and Other Items and
Transfers of Funds” (12 CFR part 210). If a
depository institution draws against items be
fore that time, the charge will be made to its
reserve account if the balance is sufficient to
pay it; any resulting impairment of reserve
balances will be subject to the penalties pro
vided by law and by this part. However, the
Federal Reserve Bank may, at its discretion,
refuse to permit the withdrawal or other use
of credit given in a reserve account for any
time for which the Federal Reserve bank has
not received payment in actually and finally
collected funds.
(h) Carryover o f deficiencies. Any excess or
deficiency in a required reserve balance for
any maintenance period that does not exceed
2 percent of institution’s required reserves
shall be carried forward to the next mainte
nance period. Any carryover not offset during
the next period may not be carried forward to
additional periods.
(i) Pass-through rules.
(1) Procedure
(i) A nonmember depository institution
11
§ 204.3
required to maintain reserve balances
( “respondent” ) may select only one in
stitution to pass through its required re
serves. Eligible institutions through
which respondent required reserve bal
ances may be passed ( “correspondents” )
are Federal Home Loan Banks, the Na
tional Credit Union Administration Cen
tral Liquidity Facility, and depository in
stitutions that maintain required reserve
balances at a Federal Reserve office. In
addition, the Board reserves the right to
permit other institutions, on a case-bycase basis, to serve as pass-through corre
spondents. The correspondent chosen
must subsequently pass through the re
quired reserve balances of its respondents
directly to the appropriate Federal Re
serve office. The correspondent placing
funds with the Federal Reserve on behalf
of respondents will be responsible for re
serve account maintenance as described
in subparagraphs (3) and (4) below.
(ii) Respondent depository institutions
or pass-through correspondents may in
stitute, terminate, or change pass
through arrangements for the mainte
nance of required reserve balances by
providing all documentation required for
the establishment of the new arrange
ment and/or termination of the existing
arrangement to the Federal Reserve
Bank in whose territory the respondent is
located. The time period required for
such a change to be effected shall be spec
ified by each Reserve Bank in its operat
ing circular.
(iii) U.S. branches and agencies of for
eign banks and Edge and agreement cor
porations may (a) act as pass-through
correspondents for any nonmember insti
tution required to maintain reserves or
(b) pass their own required reserve bal
ances through correspondents. In accord
ance with the provision set forth in sub
paragraph (3) below, the U.S. branches
and agencies of a foreign bank or offices
of an Edge and agreement corporation
filing a single aggregated report of depos
its may designate any one of the other
U.S. offices of the same institution to
serve as a pass-through correspondent for
Regulation D
all of the offices filing such a single aggre
gated report of deposits.
(2) Reports
(i) Every depository institution that
maintains transaction accounts or non
personal time deposits is required to file
its report of deposits (or any other re
quired form or statement) directly with
the Federal Reserve Bank of its District,
regardless of the manner in which it
chooses to maintain required reserve
balances.
(ii) The Federal Reserve Bank receiving
such reports shall notify the reporting de
pository institution of its reserve require
ments. Where a pass-through arrange
ment exists, the Reserve Bank will also
notify the correspondent passing respon
dent reserve balances through to the Fed
eral Reserve of its respondent’s required
reserve balances.
(iii) The Federal Reserve will not hold a
correspondent responsible for guarantee
ing the accuracy of the reports of depos
its submitted by its respondents to their
local Federal Reserve Banks.
(3) Account maintenance
(i) A correspondent that passes through
required reserve balances of respondents
whose main offices are located in the
same Federal Reserve territory in which
the main office of the correspondent is lo
cated shall have the option of maintain
ing such required reserve balances in one
of two ways: (a) A correspondent may
maintain such balances, along with the
correspondent’s own required reserve
balances, in a single commingled account
at the Federal Reserve Bank office in
whose territory the correspondent’s main
office is located, or (b) A correspondent
may maintain its own required reserve
balance in an account with the Federal
Reserve Bank office in whose territory its
main office is located. The correspondent,
in addition, would maintain in a separate
commingled account the required reserve
balances passed through for respondents
whose main offices are located in the
same Federal Reserve territory as that of
the main office of the correspondent.
(ii) A correspondent that passes
Regulation D
through required reserve balances of re
spondents whose main offices are located
outside the Federal Reserve territory in
which the main office of the correspon
dent is located shall maintain such re
quired reserve balances in a separate
commingled account at each Federal Re
serve office in whose territory the main
offices of such respondents are located,
(iii) A Reserve Bank may, at its discre
tion, require a pass-through correspon
dent to consolidate in a single account
the reserve balances of all of its respon
dents whose main offices are located in
any territory of that Federal Reserve
District.
( 4 ) Responsibilities o f parties
(i) Each individual depository institu
tion is responsible for maintaining its re
quired reserve balance with the Federal
Reserve Bank either directly or through a
pass-through correspondent.
(ii) A pass-through correspondent shall
be responsible for assuring the mainte
nance of the appropriate aggregate level
of its respondents’ required reserve bal
ances. A Reserve Bank will compare the
total reserve balance required to be main
tained in each reserve account with the
total actual reserve balance held in such
reserve account for purposes of determin
ing required reserve deficiencies, impos
ing or waiving penalties for deficiencies
in required reserves, and for other reserve
maintenance purposes. A penalty for a
deficiency in the aggregate level of the re
quired reserve balance will be imposed by
the Reserve Bank on the correspondent
maintaining the account.
(iii) Each correspondent is required' to
maintain detailed records for each of its
respondents in a manner that permits
Reserve Banks to determine whether the
respondent has provided a sufficient re
quired reserve balance to the correspon
dent. A correspondent passing through a
respondent’s reserve balance shall main
tain records and make such reports as the
Federal Reserve System requires in order
to insure the correspondent’s compliance
with its responsibilities for the mainte
nance of a respondent’s reserve balance.
§204.3
Such records shall be available to the
Federal Reserve Banks as required.
(iv) The Federal Reserve Bank may ter
minate any pass-through relationship in
which the correspondent is deficient in its
recordkeeping or other responsibilities.
(v) Interest paid on supplemental re
serves (if such reserves are required un
der section 204.6 of this part) held by
respondent (s) will be credited to the
commingled reserve account(s) main
tained by the correspondent.
(5) Services
(i) A depository institution maintaining
its reserve balances on a pass-through ba
sis may obtain available Federal Reserve
System services directly from its local
Federal Reserve office. For this purpose,
the pass-through account in which a re
spondent’s required reserve balance is
maintained may be used by the respon
dent for the posting of entries arising
from transactions involving the use of
such Federal Reserve services, if the
posting of these types of transactions has
been authorized by the correspondent
and the Federal Reserve. For example,
access to the wire transfer, securities
transfer, and settlement services that in
volve charges to the commingled reserve
account at the Reserve Bank will require
authorization from the correspondent
and the Reserve Bank for the type of
transaction that is occurring.
(ii) In addition, in obtaining Federal
Reserve services, respondents maintain
ing their required reserves on a pass
through basis may choose to have entries
arising from the use of Federal Reserve
services posted to: (a) with the prior au
thorization of all parties concerned, the
reserve account maintained by any insti
tution at a Federal Reserve Bank, or (b)
an account maintained for clearing pur
poses at a Federal Reserve Bank by the
respondent.
(iii) Accounts at Federal Reserve Banks
consisting only of respondents’ reserve
balances that are passed through by a
correspondent to a Federal Reserve Bank
may be used only for transactions of re
spondents. A correspondent will not be
13
§204.3
Regulation D
permitted to use such pass-through ac
counts for purposes other than serving its
respondents’ needs.
(iv) A correspondent may not apply for
Federal Reserve credit on behalf of a re
spondent. Rather, a respondent should
apply directly to its Federal Reserve
Bank for credit. Any Federal Reserve
credit obtained by a respondent may be
credited, at the respondent’s option and
with the approval of the parties con
cerned, to the reserve account in which
its required reserves are maintained by a
correspondent, to a clearing account
maintained by the respondent, or to any
account to which the respondent is au
thorized to post entries arising from the
use of Federal Reserve services.
SE C T IO N 204.4— T ransitional
A djustm ents
The following transitional adjustments for
computing federal reserve requirements shall
apply to all member and nonmember deposi
tory institutions, except for reserves imposed
under sections 204.5 and 204.6.
(a) Nonmembers. Except as provided below,
the required reserves of a depository institu
tion that was engaged in business on July 1,
1979, but was not a member of the Federal
Reserve System on or after that date shall be
determined by reducing the amount of re
quired reserves computed under section 204.3
in accordance with the following schedule:
Reserve maintenance
periods occurring
between
Percentage that
computed reserves
will be reduced
N o v em b e r 13, 1980
to September 2, 1981
87.5
September 3, 1981
to September 1, 1982
75
September 2, 1982
to A ugu st 31, 1983
62.5
September 1, 1983
to September 5, 1984
50
September 6, 1984
to September 4 , 1985
37.5
September 5, 1985
to September 3, 1986
September 4 , 1986
to Septem ber 2, 1987
September 3, 1987
fo rw a rd
25
12.5
0
However, an institution shall not reduce the
amount of required reserves on any category
of deposits or accounts that are first autho
rized under federal law in any state after April
1, 1980.
(b) Members and former members. The re
quired reserves of any depository institution
that is a member bank on September 1, 1980,
or was a member bank on or after July 1, 1979
and withdrew from membership before March
31, 1980, or withdraws from membership on
or after March 31, 1980, shall be determined
as follows:
(1) A depository institution whose re
quired reserves are higher using the reserve
ratios in effect during a given computation
period (§ 204.9 (a)) than its required re
serves using the reserve ratios in effect on
August 31, 1980 (§ 204.9 (b)) (without
regard to required reserves on any category
of deposits or accounts that are first autho
rized under federal law in any state after
April 1, 1980):
(i) shall maintain the full amount of re
quired reserves on any category of depos
its or accounts that are first authorized
under federal law in any state after April
1, 1980; and
(ii) shall reduce the amount of its re
quired reserves on all other deposits com
puted under section 204.3 by an amount
determined by multiplying the amount
by which required reserves computed un
der section 204.3 exceed the amount of
required reserves computed using the re
serve ratios that were in effect on August
31, 1980 (§ 204.9 (b )), times the appro
priate percentage specified below in ac
cordance with the following schedule:
Reserve maintenance
periods occurring
between
Percentage
applied to
difference to
compute amount
to be subtracted
N o v em b e r 13, 1980
to September 2, 1981
75
September 3, 1981
to Septem ber 1, 1982
50
September 2, 1982
to A ugust 31, 1983
25
September 1, 1983
forw ard
0
Regulation D
§ 204.4
(2) A depository institution whose re
quired reserves are lower using the reserve
ratios in effect during a given computation
period (§ 204.9 (a )) than its required re
serves computed using the reserve ratios in
effect on August 31, 1980 (§ 204.8 (b ))
(without regard to required reserves on any
category of deposits or accounts that are
first authorized under federal law in any
state after April 1, 1980):
(i) shall maintain the full am ount of re
quired reserves on any category of depos
its or accounts that are first authorized
under federal law in any state after April
1, 1980; and
(ii) shall increase the am ount of its re
quired reserves on all other deposits com
puted under section 204.3 by an am ount
determined by multiplying the am ount
by which required reserves computed us
ing the reserve ratios that were in effect
on August 31, 1980 (§ 204.9 ( b )), ex
ceed the am ount of required reserves
computed under section 204.3, times the
appropriate percentage specified below in
accordance with the following schedule:
Reserve maintenance
periods occurring
between
Percentage
applied to
difference to
compute amount
to be added
N o v em b e r 13, 1980S e p te m b er2 , 1981
75
Septem ber 3, 1981M a rc h 3, 1982
62.5
M a rc h 4Septem ber 1, 1982
50
Septem ber 2, 1982M a rc h 2, 1983
37.5
M a rc h 3A u g u st 31, 1983
25
Septem ber 1, 1983F e b ru a ry 29, 1984
12.5
M a rc h 1, 1984
fo rw a rd
0
(c) Certain nonmembers an d branches and
agencies o f foreign banks. The required re
serves of a nonmember depository institution
that was not engaged in business on or before
July 1, 1979, but commenced business be
tween July 2, 1979, and September 1, 1980,
and any United States branch or agency of a
foreign bank with total worldwide consolidat
ed bank assets in excess of $ 1 billion shall be
determined by reducing the am ount of its re
quired reserves computed under section 204.3
in accordance with the following schedule:
Reserve maintenance
periods occurring
between
Percentage that
computed reserves
will be reduced
N o v em b e r 13, 1980F e b ru a ry 11, 1981
87.5
F e b ru a ry 12M a y 13, 1981
7 5.0
M a y 14A u g u st 12, 1981
62.5
A u g u st 13N o v em b e r 11, 1981
50.0
N o v em b e r 12, 1981F e b ru a ry 10, 1982
37.5
F e b ru a ry 11M a y 12, 1982
25.0
M a y 13A u g u st 11, 1982
12.5
A u g u st 12, 1982
fo rw a rd
0
However, an institution shall not reduce the
am ount of required reserves on any category
of deposits or accounts that are first autho
rized under federal law in any state after April
1, 1980. An additional United States branch
or agency of a foreign bank operating a
branch or agency in the United States as of
September 1, 1980, shall be entitled only to
the remaining phase-in available to the exist
ing U. S. branch or agency.
(d ) New members. The required reserves of a
nonmember depository institution that was
engaged in business but was not a member
bank during the period between July 1, 1979
and September 1, 1980, inclusive, and which
becomes a member of the Federal Reserve
System after September 1, 1980, shall be de
termined under paragraph (a) or (c), as ap
plicable, as if it had remained a nonmember
and adding to this am ount an am ount deter
mined by multiplying the difference between
its required reserves computed using the ra
tios specified in section 204.9(a) and its re
quired reserves computed as if it had re
mained a nonmember times the percentage
specified below in accordance with the follow
ing schedule:
§204.4
Maintenance periods
occurring during
successive quarters
after becoming
a member bank
1
2
3
4
5
6
7
8 and succeeding
Regulation D
Percentage applied
to difference
to compute amount
to be added
12.5
25.0
37.5
50.0
62.5
75.0
87.5
100.0
(e) D e novo institutions. (1) The required re
serves of any depository institution that was
not engaged in business on September 1,
1980, shall be computed under section
204.3 in accordance with the following
schedule:
Maintenance periods
occurring during
successive quarters
after entering
into business
1
2
3
4
5
6
7
8 and succeeding
Percentage o f
reserve requirement
to be maintained
40
45
50
55
65
75
85
100
This paragraph shall also apply to a
United States branch or agency of a foreign
bank if such branch or agency is the foreign
bank’s first office in the United States. Ad
ditional branches or agencies of such a for
eign bank shall be entitled only to the re
maining phase-in available to the initial
office.
(2) Notwithstanding subparagraph (1),
the required reserves of any depository in
stitution that—
(i) was not engaged in business on No
vember 18, 1981; and
(ii) has $50 million or more in daily av
erage total transaction accounts, nonper
sonal time deposits and Eurocurrency lia
bilities for any computation period after
commencing business shall maintain 100
percent of the required reserves com put
ed under section 204.3 starting with the
maintenance period that begins eight
days after the computation period during
which such institution has daily average
total transaction accounts, nonpersonal
time deposits and Eurocurrency liabilities
of $50 million or more.
(f) N onm em ber depository institutions with
offices in Hawaii. Any depository institution
that, on August 1, 1978, (i) was engaged in
business as a depository institution in Hawaii,
and (ii) was not a member of the Federal Re
serve System at any time on or after such date
shall not maintain reserves imposed under this
part against deposits held or maintained at its
offices located in Hawaii until January 2,
1986. Beginning January 2, 1986, the required
reserves on deposits held or maintained at of
fices located in Hawaii of such a depository
institution shall be determined by reducing
the am ount of required reserves under section
204.3 in accordance with the following
schedule:
Maintenance periods
occurring between
Percentage that
computed reserves
will be reduced
Jan uary 2
to D ecem b er 31, 1986
87.5
Jan uary 1, 1987
to Jan uary 6, 1988
75
Jan uary 7, 1988
to Jan uary 4, 1989
62.5
January 5, 1989
to January 3, 1990
50
Jan uary 4 , 1990
to Jan uary 2, 1991
37.5
January 3, 1991
to January 1, 1992
25
January 2, 1992
to January 6, 1993
12.5
January 7, 1993
fo rw ard
0
(g) Mergers and consolidations. The follow
ing rules concerning transitional adjustments
apply to mergers and consolidations of deposi
tory institutions:
(1) Where all depository institutions in
volved in a merger or consolidation are sub
ject to the same paragraph of the transition
al adjustment rules contained in paragraphs
(a) through (f) of this section during the
§ 204.4
Regulation D
reserve computation period immediately
preceding the merger, the surviving institu
tion shall continue to compute its transi
tional adjustment of required reserves un
der such applicable paragraph, except that
the am ount of reserves which shall be main
tained shall be reduced by an am ount deter
mined by multiplying the am ount by which
the required reserves during the com puta
tion period immediately preceding the date
o f the merger (computed as if the deposito
ry institutions had merged) exceed the sum
o f the actual required reserves of each de
pository institution during the same compu
tation period, times the appropriate per
centage as specified in the following
schedule:
Maintenance periods
occurring during
quarterly periods
following merger
1
2
3
4
5
6
7
8 and succeeding
Percentage applied
to difference
to compute amount
to be subtracted
87.5
75.0
62.5
50.0
37.5
25.0
12.5
0
(2) (i) Where the depository institutions
involved in a merger or consolidation are
not subject to the same paragraph of the
transitional adjustment rules contained in
paragraphs (a) through ( 0 of this sec
tion and such merger or consolidation
occurs—
(A ) on or after July 1, 1979, between
a nonmember bank and a bank that
was a member bank on or after July 1,
1979, and the survivor is a nonmember
bank;
(B ) on or after March 31, 1980, be
tween a member bank and a nonmem
ber bank and the survivor is a member
bank; or
(C ) on or after September 1, 1980, be
tween any other depository institu
tions,
the required reserves of the surviving in
stitution shall be computed by allocating
its deposits, Eurocurrency liabilities, oth
er reservable claims, balances due from
other depository institutions and cash
items in process of collection to each de
pository institution involved in the merg
er transaction and applying to such
amounts the transitional adjustment rule
of paragraphs (a) through (f) of this sec
tion to which each such depository insti
tution was subject during the reserve
computation period immediately prior to
the merger or consolidation.
(ii) The deposits of the surviving institu
tion shall be allocated according to the
ratio that daily average total required re
serves of each depository institution in
volved in the merger were to the sum of
daily average total required reserves of all
institutions involved in the merger or
consolidation during the reserve compu
tation period immediately preceding the
date of the merger.
(A ) If the merger occurs before N o
vember 6, 1980, such ratio of daily av
erage total required reserves shall be
computed using the reserve require
ment ratios in section 204.9(b).
(B ) If the merger occurs on or after
November 6, 1980, such ratio of daily
average total required reserves shall be
computed using the reserve require
ment ratios in section 204.9(a) with
out regard to the transitional adjust
ments of this section.
(iii) The low reserve tranche on transac
tion accounts (section 204.9(a)) shall be
allocated to each institution involved in
the merger or consolidation using the ra
tio computed in subparagraph (2) (ii)
and the reserve requirement tranches on
demand deposits (section 204.9(b))
shall be allocated to member bank depos
its using such ratio of daily average total
required reserves.
(iv) The vault cash of the surviving de
pository institution also will be allocated
to each institution involved in the merger
or consolidation according to the ratio
that daily average total required reserves
of each depository institution involved in
the merger was to the sum of daily
average total required reserves of all in
stitutions involved in the merger or con
solidation during the reserve computa17
§204.4
Regulation D
tion period immediately preceding the
date of the merger.
(v) The am ount of reserves which shall
be maintained shall be reduced by an
am ount determined by multiplying the
am ount by which the required reserves
during the computation period immedi
ately preceding the date of the merger
(computed as if the depository institu
tions had merged) exceed the sum of the
actual required reserves of each deposito
ry institution during the same com puta
tion period, times the appropriate per
centage as specified in the following
schedule:
Maintenance periods
occurring during
quarterly periods
following merger
1
2
3
4
5
6
7
8 and succeeding
Percentage applied
to difference
to compute amount
to be subtracted
87.5
7 5.0
62.5
5 0.0
37.5
2 5.0
12.5
0
SECTION 204.5—Emergency Reserve
Requirement
(a) Finding by Board. The Board may im
pose, after consulting with the appropriate
committees of Congress, additional reserve re
quirements on depository institutions at any
ratio on any liability upon a finding by at least
five members of the Board that extraordinary
circumstances require such action.
(b) Term. Any action taken under this sec
tion shall be valid for a period not exceeding
180 days, and may be extended for further pe
riods of up to 180 days each by affirmative
action of at least five members of the Board
for each extension.
(c) Reports to Congress. The Board shall
transm it promptly to Congress a report of any
exercise of its authority under this paragraph
and the reasons for the exercise of authority.
(d ) Reserve requirements. A t present, there
are no emergency reserve requirements im
posed under this section.
18
SECTION 204.6—Supplemental Reserve
Requirement
(a) Finding by Board. Upon the affirmative
vote of at least five members of the Board and
after consultation with the Board of Directors
of the Federal Deposit Insurance Corpora
tion, the Federal Home Loan Bank Board,
and the National Credit Union Administra
tion Board, the Board may impose a supple
mental reserve requirement on every deposito
ry institution of not more than 4 percent of its
total transaction accounts. A supplemental re
serve requirement may be imposed if:
(1) the sole purpose of the requirement is
to increase the am ount of reserves main
tained to a level essential for the conduct of
monetary policy;
(2) the requirement is not imposed for the
purpose o f reducing the cost burdens result
ing from the imposition of basic reserve
requirements;
(3) such requirement is not imposed for
the purpose of increasing the am ount of
balances needed for clearing purposes; and
(4) on the date on which supplemental re
serve requirements are imposed, the total
am ount of basic reserve requirements is not
less than the am ount of reserves that would
be required on transaction accounts and
nonpersonal time deposits under the initial
reserve ratios established by the Monetary
Control A ct of 1980 (Pub. L. 96-221) in
effect on September 1, 1980.
(b) Term.
(1) If a supplemental reserve requirement
has been imposed for a period of one year
or more, the Board shall review and deter
mine the need for continued maintenance of
supplemental reserves and shall transmit
annual reports to the Congress regarding
the need for continuing such requirement.
(2) Any supplemental reserve requirement
shall terminate at the close of the first 90day period after the requirement is imposed
during which the average am ount of supple
mental reserves required are less than the
amount of reserves which would be re
quired if the ratios in effect on September 1,
1980, were applied.
(c) Earnings Participation Account. A depos
Regulation D
itory institution’s supplemental reserve re
quirement shall be maintained by the Federal
Reserve Banks in an Earnings Participation
Account. Such balances shall receive earnings
to be paid by the Federal Reserve Banks dur
ing each calendar quarter at a rate not to ex
ceed the rate earned on the securities portfolio
of the Federal Reserve System during the pre
vious calendar quarter. Additional rules and
regulations may be prescribed by the Board
concerning the payment of earnings on E arn
ings Participation Accounts by Federal Re
serve Banks.
(d) R eport to Congress. The Board shall
transm it promptly to the Congress a report
stating the basis for exercising its authority to
require a supplemental reserve under this
section.
(e) Reserve requirements. At present, there
are no supplemental reserve requirements im
posed under this section.
SECTION 204.7—Penalties
(a) Penalties fo r deficiencies.
(1) Assessment o f penalties. Deficiencies in
a depository institution’s required reserve
balance, after application of the 2 percent
carryover provided in section 204.3(f) are
subject to penalties. Federal Reserve Banks
are authorized to assess penalties for defi
ciencies in required reserves at a rate of 2
percent per year above the lowest rate in
effect for borrowings from the Federal Re
serve Bank on the first day of the calendar
month in which the deficiencies occurred.
Penalties shall be assessed on the basis of
daily average deficiencies during each com
putation period. Reserve Banks may, as an
alternative to levying monetary penalties,
after consideration of the circumstances in
volved, permit a depository institution to
eliminate deficiencies in its required reserve
balance by maintaining additional reserves
during subsequent reserve maintenance
periods.
(2) Waivers, (i) Reserve Banks may waive
the penalty for reserve deficiencies except
when the deficiency arises out of a depos
itory institution’s gross negligence or
§204.8
conduct that is inconsistent with the
principles and purposes of reserve re
quirements. Each Reserve Bank has
adopted guidelines that provide for waiv
ers of small penalties. The guidelines also
provide for waiving the penalty once dur
ing a two-year period for any deficiency
that does not exceed a certain percentage
o f the depository institution’s required
reserves. Decisions by Reserve Banks to
waive penalties in other situations are
based on an evaluation of the circum
stances in each individual case and the
depository institution’s reserve mainte
nance record. If a depository institution
has demonstrated a lack of due regard for
the proper maintenance of required re
serves, the Reserve Bank may decline to
exercise the waiver privilege and assess
all penalties regardless of am ount or rea
son for the deficiency.
(ii) In individual cases, where a federal
supervisory authority waives a liquidity
requirement, or waives the penalty for
failing to satisfy a liquidity requirement,
the Reserve Bank in the D istrict where
the involved depository institution is lo
cated shall waive the reserve requirement
imposed under this part for such deposi
tory institution when requested by the
federal supervisory authority involved.
(b) Penalties fo r violations. Violations of this
part may be subject to assessment of civil
money penalties by the Board under authority
of section 19(1) of the Federal Reserve Act
(12 USC 505) as implemented in 12 C FR
part 263. In addition, the Board and any other
federal financial institution supervisory au
thority may enforce this part with respect to
depository institutions subject to their juris
diction under authority conferred by law to
undertake cease and desist proceedings.
SECTION 204.8—International Banking
Facilities
(a) Definitions. For purposes of this part, the
following definitions apply:
(1) “International banking fa c ility ” or
“IB F ” means a set of asset and liability ac
counts segregated on the books and records
!9
§204.8
of a depository institution, United States
branch or agency of a foreign bank, or an
Edge or agreement corporation that in
cludes only international banking facility
time deposits and international banking fa
cility extensions of credit.
(2)
"International banking fa cility tim e de
posit" or “IBF tim e deposit” means a depos
it, placement, borrowing or similar obliga
tion represented by a promissory note, ac
knowledgment of advance, or similar in
strum ent that is not issued in negotiable or
bearer form, and
(i) (A ) that must remain on deposit at
the IB F at least overnight; and
(B ) that is issued to—
( 1 ) any office located outside the
United States of another depository
institution organized under the laws
of the United States or of an Edge or
agreement corporation;
(2) any office located outside the
U nited States of a foreign bank;
(5) a United States office or a non
U nited States office of the entity es
tablishing the IBF;
(4 ) another IBF; or
(5) an institution whose time de
posits are exempt from interest rate
limitations under section 217.3(g)
of Regulation
Q
(12
CFR
217.3(g)); or
(ii) (A ) that is payable—
( 1 ) on a specified date not less than
two business days after the date of
deposit;
(2) upon expiration of a specified
period of time not less than two
business days after the date of de
posit; or
( J ) upon written notice that actual
ly is required to be given by the de
positor not less than two business
days prior to the date of withdrawal;
(B ) that represents funds deposited to
the credit of a non-United States resi
dent or a foreign branch, office, subsid
iary, affiliate, or other foreign estab
lishment ( “foreign affiliate” ) con
trolled by one or m ore domestic corpo
rations provided that such funds are
used only to support the operations
20
Regulation D
outside the United States of the deposi
tor or of its affiliates located outside
the United States; and
(C ) that is maintained under an
agreement or arrangement under
which no deposit or withdrawal of less
than $100,000 is permitted, except that
a withdrawal of less than $100,000 is
permitted if such withdrawal closes an
account.
(3)
“International banking fa cility exten
sion o f credit ” or “IB F loan ” means any
transaction where an IBF supplies funds by
making a loan, or placing funds in a deposit
account. Such transactions may be repre
sented by a promissory note, security, ac
knowledgment of advance, due bill, repur
chase agreement, or any other form of cred
it transaction. Such credit may be extended
only to—
(i) any office located outside the United
States of another depository institution
organized under the laws of the United
States or of an Edge or agreement
corporation;
(ii) any office located outside the United
States of a foreign bank;
(iii) a United States or a non-United
States office of the institution establishing
the IBF;
(iv) another IBF;
(v) an institution whose time deposits
are exempt from interest rate limitations
under section 217.3(g) of Regulation Q
(12 CFR 217.3(g)); or
(vi) a non-United States resident or a
foreign branch, office, subsidiary, affiliate
or other foreign establishment ( “foreign
affiliate” ) controlled by one or more do
mestic corporations provided that the
funds are used only to finance the opera
tions outside the U nited States of the bor
rower or of its affiliates located outside
the United States.
(b) Acknowledgm ent o f use o f IB F deposits
and extensions o f credit. An IBF shall provide
written notice to each of its customers (other
than those specified in section 204.8(a)(2)
(i)(B ) and section 2 0 4 .8 (a )(3 )(i) through
(v )) at the time a deposit relationship or a
credit relationship is first established that it is
§204.9
Regulation D
the policy o f the Board of Governors of the
Federal Reserve System that deposits received
by international banking facilities may be used
only to support the depositor’s operations out
side the United States as specified in section
2 0 4 .8 (a )(2 )(ii)(B ) and th at extensions of
credit by IBFs may be used only to finance
operations outside o f the United States as
specified in section 204.8(a) (3) (vi). In the
case o f loans to or deposits from foreign affili
ates of U. S. residents, receipt of such notice
must be acknowledged in writing whenever a
deposit or credit relationship is first estab
lished with the IBF.
(c) Exem ption fro m reserve requirements. An
institution that is subject to the reserve re
quirements of this part is not required to
maintain reserves against its IBF tim e depos
its or IB F loans. Deposit-taking activities of
IBFs are limited to accepting only IBF time
deposits and lending activities o f IBFs are re
stricted to making only IBF loans.
(f) Recordkeeping requirements. A deposito
ry institution shall segregate on its books and
records the asset and liability accounts of its
IB F and submit reports concerning the opera
tions o f its IB F as required by the Board.
SECTION 204.9—Supplement: Reserve
Requirement Ratios
(a) Reserve percentages. The following re
serve ratios are prescribed for all depository
institutions, Edge and agreement corporations
and United States branches and agencies of
foreign banks:
Category
$ 0 -$ 2 6 m illio n
O v e r $26 m illio n
(d ) E stablishm ent o f an international bank
ing facility. A depository institution, an Edge
N O N P E R S O N A L T IM E
D E P O S IT S
or agreement corporation or a United States
branch or agency o f a foreign bank may estab
lish an IB F in any location where it is legally
authorized to engage in IB F business. Howev
er, only one IBF may be established for each
reporting entity that is required to submit a
Report of Transaction Accounts, O ther De
posits and Vault Cash (Form F R 2900).
B y o rig in a l m a tu rity
( o r no tice p e r io d ):
(e) Notification to Federal Reserve. A t least
14 days prior to the first reserve computation
period that an institution intends to establish
an IBF it shall notify the Federal Reserve
Bank of the D istrict in which it is located of
its intent. Such notification shall include a
statement of intention by the institution that it
will comply with the rules of this part con
cerning IBFs, including restrictions on sourc
es and uses of funds, and recordkeeping and
accounting requirements. Failure to comply
with the requirements of this part shall subject
the institution to reserve requirements under
this part and to interest payment limitations
that may be applicable under Regulation Q
(12 C FR part 217) on its IBF time deposits,
or result in the revocation of the institution’s
ability to operate an IBF.
Reserve requirement
N E T T R A N S A C T IO N
A CCO UNTS
3 % o f am o unt
$ 78 0 ,0 0 0 plus 1 2 %
o f am o unt over
$26 m illio n
less th a n fo u r years
3%
fo u r years o r m ore
0%
EUROCURRENCY
L IA B IL IT IE S
3%
(b) Reserve ratios in effect during last compu
tation period prior to Septem ber 1, 1980.
Category
Reserve requirement
NET DEM AND
D E P O S IT S
D ep o sit tranche:
S0-S2 m illio n
over $2 m illio n $10 m illio n
ov e r $ 10 m illio n $ 1 0 0 m illio n
7%
$ 1 4 0 ,0 0 0 + 9 $ %
o f am ount over
$2 m illio n
$ 9 0 0 ,0 0 0 + 1 1J %
o f am o unt over
$ 10 m illio n
o ver $ 1 0 0 m illio n $ 4 0 0 m illio n
$ 1 1 ,4 7 5 ,0 0 0 + 1 2 |%
o f am ount over
$ 100 m illio n
o ver $ 40 0 m illio n
$ 4 9 ,7 2 5 ,0 0 0 + 16±%
o f am o unt over
$400 m illio n
21
§204.9
Category
S A V IN G S D E P O S IT S
Regulation D
Reserve requirement
3%
T I M E D E P O S IT S
(subject to 3 %
m in im u m specified
by la w )
B y in itia l m a tu rity :
less th a n 180 days
$ 0-5 m illio n
over $5 m illio n
180 days to fo u r
years
fo u r years o r m ore
3%
6%
2J%
1%
A ccounts a u th o rized
pu rsuant to section 303
o f Pub. L . 96-221
offered b y m em ber banks
located in states
outside C onn ecticut,
M a in e , M assachusetts,
N e w H am p s h ire ,
N e w Jersey, N e w Y o r k ,
R h o d e Is la n d and
V e rm o n t
1 2%
C lu b accounts
3%
For purposes of computing the reserves un
der this part, that would have been required
using the reserve ratios that were in effect on
August 31, 1980, the reserve ratio on time de
posits of a member bank shall be the average
time deposit ratio of the member bank during
the 14-day period ending August 6, 1980, ex
cept that the reserve ratio on time deposits of
a nonmember bank that was a member bank
on or after July 1, 1979, but which became a
nonmember bank before M arch 31, 1980, may
be the average time deposit ratio o f the non
member during the 14-day period ending A u
gust 27, 1980.
Federal Reserve Act
Dispersed th ro u g h o u t 12 U S C ; 38 Stat. 251; Pub. L . 6 4 -2 7 0 (D e c e m b e r 2 3 , 1 9 1 3 )
SECTION 19—Bank Reserves
in section 401 of the N ational Housing
A ct or any institution which is eligible
(a) The Board is authorized for the purposes
to make application to become an in
o f this section to define the term s used in this
sured institution under section 403 of
section, to determine what shall be deemed a
such Act; and
payment of interest, to determine w hat types
(vii) for the purpose of section 13 and
of obligations, whether issued directly by a
the fourteenth paragraph of section 16,
member bank or indirectly by an affiliate of a
any association or entity which is
member bank or by other means, shall be
wholly owned by or which consists
deemed a deposit, and to prescribe such regu
only o f institutions referred to in claus
lations as it may deem necessary to effectuate
es (i) through (vi).
the purposes of this section and to prevent
(B ) The term ‘bank’ means any insured
evasions thereof.
or noninsured bank, as defined in section
3 of the Federal Deposit Insurance Act,
(b ) Reserve requirements.
other than a mutual savings bank or a
(1) Definitions. The following definitions
savings bank as defined in such section.
and rules apply to this subsection, subsec
(C ) The term ‘transaction account’
tion (c ), section 11A, the first paragraph of
means a deposit or account on which the
section 13, and the second, thirteenth, and
depositor or account holder is permitted
fourteenth paragraphs of section 16:
to make withdrawals by negotiable or
(A )
The term ‘depository institution’
transferable instrument, payment orders
means—
of withdrawal, telephone transfers, or
(i) any insured bank as defined in sec
other similar items for the purpose of
tion 3 of the Federal Deposit Insur
making payments o r transfers to third
ance A ct or any bank which is eligible
persons or others. Such term includes de
to make application to become an in
mand deposits, negotiable order of with
sured bank under section S of such
drawal accounts, savings deposits subject
Act;
to automatic transfers, and share draft
(ii) any mutual savings bank as de
accounts.
fined in section 3 of the Federal Depos
(D ) The term ‘nonpersonal time depos
it Insurance A ct or any bank which is
its’ means a transferable time deposit or
eligible to make application to become
account or a time deposit or account rep
an insured bank under section 5 of
resenting funds deposited to the credit of,
such Act;
or in which any beneficial interest is held
(iii) any savings bank as defined in
by, a depositor who is not a natural
section 3 of the Federal Deposit Insur
person.
ance A ct or any bank which is eligible
(E ) In order to prevent evasions o f the
to make application to become an in
reserve requirements imposed by this
sured bank under section 5 of such
subsection, after consultation with the
Act;
Board o f D irectors of the Federal Depos
(iv) any insured credit union as de
it Insurance Corporation, the Federal
fined in section 101 of the Federal
Home Loan Bank Board, and the N a
Credit Union A ct or any credit union
tional Credit Union Administration
which is eligible to make application to
Board, the Board of Governors of the
become an insured credit union pursu
Federal Reserve System is authorized to
ant to section 201 o f such Act;
determine, by regulation or order, that an
(v) any member as defined in section
2
of the Federal Home Loan Bank Act; account or deposit is a transaction ac
count if such account or deposit may be
(vi) any insured institution as defined
23
Statutory Provisions
used to provide funds directly o r indirect
ly for the purpose of making payments or
transfers to third persons or others.
(2 ) Reserve requirements. (A ) Each de
pository institution shall m aintain re
serves against its transaction accounts as
the Board may prescribe by regulation
solely for the purpose of implementing
monetary policy—
(i) in the ratio of 3 per centum for
that portion of its total transaction ac
counts of $25,000,000 or less, subject
to subparagraph (C ); and
(ii) in the ratio of 12 per centum, or
in such other ratio as the Board may
prescribe not greater than 14 per cen
tum and not less than 8 per centum,
for that portion of its total transaction
accounts in excess of $25,000,000, sub
ject to subparagraph (C ).
(B) Each depository institution shall
m aintain reserves against its nonpersonal
time deposits in the ratio of 3 per cen
tum, or in such other ratio not greater
than 9 per centum and not less than zero
per centum as the Board may prescribe
by regulation solely for the purpose of
implementing m onetary policy.
(C ) Beginning in 1981, not later than
December 31 of each year the Board
shall issue a regulation increasing for the
next succeeding calendar year the dollar
am ount which is contained in subpara
graph (A ) or which was last determined
pursuant to this subparagraph for the
purpose of such subparagraph, by an
am ount obtained by multiplying such
dollar am ount by 80 per centum of the
percentage increase in the total transac
tion accounts of all depository institu
tions. The increase in such transaction
accounts shall be determined by subtract
ing the am ount of such accounts on June
30 of the preceding calendar year from
the am ount of such accounts on June 30
o f the calendar year involved. In the case
o f any such 12-month period in which
there has been a decrease in the total
transaction accounts of all depository in
stitutions, the Board shall issue such a
regulation decreasing for the next suc
ceeding calendar year such dollar
Regulation D
am ount by an am ount obtained by multi
plying such dollar am ount by 80 per cen
tum of the percentage decrease in the to
tal transaction accounts of all depository
institutions. The decrease in such trans
action accounts shall be determined by
subtracting the am ount of such accounts
on June 30 of the calendar year involved
from the am ount of such accounts on
June 30 of the previous calendar year.
(D ) Any reserve requirement imposed
under this subsection shall be uniformly
applied to all transaction accounts at all
depository institutions. Reserve require
ments imposed under this subsection
shall be uniformly applied to nonpersonal
time deposits at all depository institu
tions, except that such requirements may
vary by the m aturity of such deposits.
(3) W aiver o f ratio lim its in extraordinary
circumstances. Upon a finding by at least 5
members of the Board that extraordinary
circumstances require such action, the
Board, after consultation with the appro
priate committees o f the Congress, may
impose, with respect to any liability of
depository institutions, reserve require
ments outside the limitations as to ratios
and as to types of liabilities otherwise pre
scribed by paragraph (2) for a period not
exceeding 180 days, and for further periods
not exceeding 180 days each by affirmative
action by at least 5 members of the Board in
each instance. The Board shall promptly
transm it to the Congress a report of any
exercise of its authority under this para
graph and the reasons for such exercise of
authority.
(4) Supplem ental reserves. (A ) T he Board
may, upon the affirmative vote of not less
than 5 members, impose a supplemental
reserve requirement on every depository
institution of not more than 4 per centum
of its total transaction accounts. Such
supplemental reserve requirement may be
imposed only if—
(i) the sole purpose of such require
ment is to increase the am ount of re
serves maintained to a level essential
for the conduct of monetary policy;
(ii) such requirement is not imposed
for the purpose of reducing the cost
Regulation D
burdens resulting from the imposition
of the reserve requirements pursuant
to paragraph (2);
(iii) such requirem ent is not imposed
for the purpose of increasing the
am ount of balances needed for clearing
purposes; and
(iv) on the date on which the supple
mental reserve requirement is imposed,
the total am ount of reserves required
pursuant to paragraph (2 ) is not less
than the am ount o f reserves that would
be required if the initial ratios specified
in paragraph (2) were in effect.
(B ) The Board may require the supple
mental reserve authorized under subpar
agraph (A ) only after consultation with
the Board o f D irectors o f the Federal De
posit Insurance Corporation, the Federal
Home Loan Bank Board, and the N a
tional Credit Union Administration
Board. The Board shall promptly trans
m it to the Congress a report with respect
to any exercise o f its authority to require
supplemental reserves under subpara
graph (A ) and such report shall state the
basis for the determination to exercise
such authority.
(C ) The supplemental reserve autho
rized under subparagraph (A ) shall be
maintained by the Federal Reserve banks
in an Earnings Participation Account.
Except as provided in subsection
(c ) ( 1 ) ( A ) ( ii) , such Earnings Participa
tion Account shall receive earnings to be
paid by the Federal Reserve banks during
each calendar quarter at a rate not more
than the rate earned on the securities
portfolio of the Federal Reserve System
during the previous calendar quarter.
The Board may prescribe rules and regu
lations concerning the payment o f earn
ings on Earnings Participation Accounts
by Federal Reserve banks under this
paragraph.
(D ) If a supplemental reserve under
subparagraph (A ) has been required of
depository institutions for a period of one
year or more, the Board shall review and
determine the need for continued m ainte
nance of supplemental reserves and shall
transm it annual reports to the Congress
Statutory Provisions
regarding the need, if any, for continuing
the supplemental reserve.
(E ) Any supplemental reserve imposed
under subparagraph (A ) shall term inate
at the close of the first 90-day period af
ter such requirement is imposed during
which the average am ount o f reserves re
quired under paragraph (2) are less than
the am ount of reserves which would be
required during such period if the initial
ratios specified in paragraph (2) were in
effect.
(5 ) Reserves related to foreign obligations
or assets. Foreign branches, subsidiaries,
and international banking facilities of non
member depository institutions shall main
tain reserves to the same extent required by
the Board o f foreign branches, subsidiaries,
and international banking facilities o f mem
ber banks. In addition to any reserves oth
erwise required to be maintained pursuant
to this subsection, any depository institu
tion shall m aintain reserves in such ratios as
the Board may prescribe against—
(A ) net balances owed by domestic of
fices of such depository institution in the
United States to its directly related for
eign offices and to foreign offices of non
related depository institutions;
(B ) loans to United States residents
made by overseas offices of such deposi
tory institution if such depository institu
tion has one or m ore offices in the United
States; and
(C ) assets (including participations)
held by foreign offices of a depository in
stitution in the United States which were
acquired from its domestic offices.
(6) Exemption fo r certain deposits. The re
quirements imposed under paragraph (2)
shall not apply to deposits payable only out
side the States of the U nited States and the
D istrict of Columbia, except that nothing in
this subsection limits the authority o f the
Board to impose conditions and require
ments on member banks under section 25 of
this A ct or the authority of the Board under
section 7 of the International Banking Act
o f 1978 (12 U.S.C. 3105).
(7) Discount an d borrowing. Any deposito
ry institution in which transaction accounts
or nonpersonal time deposits are held shall
25
Statutory Provisions
be entitled to the same discount and bor
rowing privileges as member banks. In the
administration of discount and borrowing
privileges, the Board and the Federal Re
serve banks shall take into consideration
the special needs of savings and other de
pository institutions for access to discount
and borrowing facilities consistent with
their long-term asset portfolios and the sen
sitivity of such institutions to trends in the
national money markets.
(8) Transitional adjustments.
(A) Any depository institution required
to maintain reserves under this subsec
tion which was engaged in business on
July 1, 1979, but was not a member of
the Federal Reserve System on or after
that date, shall maintain reserves against
its deposits during the first twelve-month
period following the effective date of this
paragraph in amounts equal to oneeighth of those otherwise required by this
subsection, during the second such
twelve-month period in amounts equal to
one-fourth of those otherwise required,
during the third such twelve-month peri
od in amounts equal to three-eighths of
those otherwise required, during the
fourth twelve-month period in amounts
equal to one-half of those otherwise re
quired, and during the fifth twelve-month
period in amounts equal to five-eighths of
those otherwise required, during the
sixth twelve-month period in amounts
equal to three-fourths of those otherwise
required, and during the seventh twelve
month period in amounts equal to seveneighths of those otherwise required. This
subparagraph does not apply to any cate
gory of deposits or accounts which are
first authorized pursuant to Federal law
in any State after April 1, 1980.
(B) With respect to any bank which was
a member of the Federal Reserve System
during the entire period beginning on
July 1, 1979, and ending on the effective
date of the Monetary Control Act of
1980, the amount of required reserves
imposed pursuant to this subsection on
and after the effective date of such Act
that exceeds the amount of reserves
which would have been required of such
Regulation D
bank if the reserve ratios in effect during
the reserve computation period immedi
ately preceding such effective date were
applied may, at the discretion of the
Board and in accordance with such rules
and regulations as it may adopt, be re
duced by 75 per centum during the first
year which begins after such effective
date, 50 per centum during the second
year, and 25 per centum during the third
year.
(C)(i) With respect to any bank which
is a member of the Federal Reserve
System on the effective date of the
Monetary Control Act of 1980, the
amount of reserves which would have
been required of such bank if the re
serve ratios in effect during the reserve
computation period immediately pre
ceding such effective date were applied
that exceeds the amount of required re
serves imposed pursuant to this subsec
tion shall, in accordance with such
rules and regulations as the Board may
adopt, be reduced by 25 per centum
during the first year which begins after
such effective date, 50 per centum dur
ing the second year, and 75 per centum
during the third year.
(ii) If a bank becomes a member bank
during the four-year period beginning
on the effective date of the Monetary
Control Act of 1980, and if the amount
of reserves which would have been re
quired of such bank, determined as if
the reserve ratios in effect during the
reserve computation period immedi
ately preceding such effective date
were applied, and as if such bank had
been a member during such period, ex
ceeds the amount of reserves required
pursuant to this subsection, the
amount of reserves required to be
maintained by such bank beginning on
the date on which such bank becomes
a member of the Federal Reserve Sys
tem shall be the amount of reserves
which would have been required of
such bank if it had been a member on
the day before such effective date, ex
cept that the amount of such excess
shall, in accordance with such rules
Regulation D
Statutory Provisions
tory institution shall maintain reserves
and regulations as the Board may
against its deposits during the sixth
adopt, be reduced by 25 per centum
calendar year which begins after such
during the first year which begins after
effective date in an am ount equal to onesuch effective date, 50 per centum dur
eighth of that otherwise required by para
ing the second year, and 75 per centum
graph (2 ), during the seventh such year
during the third year.
( D ) ( i) Any bank which was a member
in an am ount equal to one-fourth o f that
otherwise required, during the eighth
bank on July 1, 1979, and which with
such year in an am ount equal to threedraws from membership in the Federal
eighths of that otherwise required, during
Reserve System during the period be
the ninth such year in an am ount equal
ginning on July 1, 1979, and ending on
to one-half of that otherwise required,
the day before the date of enactment of
during the tenth such year in an am ount
the Depository Institutions Deregula
equal to five-eighths of that otherwise re
tion and M onetary Control A ct of
quired, during the eleventh such year in
1980, shall maintain reserves beginning
an am ount equal to three-fourths of that
on such date of enactment in an
otherwise required, and during the
am ount equal to the am ount of re
twelfth such year in an am ount equal to
serves it would have been required to
seven-eighths o f that otherwise required.
maintain if it had been a member bank
(9) Exemption. This subsection shall not
on such date of enactment. A fter such
apply with respect to any financial institu
date of enactment, any such bank shall
tion which—
maintain reserves in the same amounts
(A ) is organized solely to do business
as member banks are required to main
with other financial institutions;
tain under this subsection, pursuant to
(B) is owned primarily by the financial
subparagraphs (B ) and (C )(i).
institutions with which it does business;
(ii) Any bank which withdraws from
membership in the Federal Reserve
and
(C ) does not do business with the gener
System on or after the date of enact
ment of the Depository Institutions
al public.
(10) Waivers. In individual cases, where a
Deregulation and M onetary Control
Federal supervisory authority waives a li
Act of 1980 shall maintain reserves in
quidity requirement, or waives the penalty
the same am ount as member banks are
for failing to satisfy a liquidity requirement,
required to maintain under this subsec
the Board shall waive the reserve require
tion, pursuant to subparagraphs (B)
ment, or waive the penalty for failing to
and (C )(i).
satisfy a reserve requirement, imposed pur
(E )
This subparagraph applies to any
suant to this subsection for the depository
depository institution which was engaged
institution involved when requested by the
in business on August 1, 1978, as a de
Federal supervisory authority involved.
pository institution organized under the
laws of a State, which was not a member
(c)(l)R ese rv e s held by a depository institu
of the Federal Reserve System on that
tion to meet the requirements imposed pur
date, and the principal office of which
suant to subsection (b ) shall, subject to
was outside the continental limits of the
such rules and regulations as the Board
United States on that date and has re
shall prescribe, be in the form of—
mained outside the continental limits of
(A ) balances maintained for such pur
the United States ever since. Such a de
poses by such depository institution in
pository institution shall not be required
the Federal Reserve bank of which it is a
to maintain reserves against its deposits
member or at which it maintains an ac
pursuant to this subsection until the first
count, except that (i) the Board may, by
day of the sixth calendar year which be
regulation or order, permit depository in
gins after the effective date of the M one
stitutions to maintain all or a portion of
tary Control A ct of 1980. Such a deposi
27
Statutory Provisions
Regulation D
their required reserves in the form of
vault cash, except that any portion so
permitted shall be identical for all deposi
tory institutions, and (ii) vault cash may
be used to satisfy any supplemental re
serve requirement imposed pursuant to
subsection (b )(4 ), except that all such
vault cash shall be excluded from any
computation of earnings pursuant to sub
section (b )( 4 )( C ) ; and
(B ) balances maintained by a depository
institution which is not a member bank
in a depository institution which main
tains required reserve balances at a Fed
eral Reserve bank, in a Federal Home
Loan Bank, or in the National Credit
Union Administration Central Liquidity
Facility, if such depository institution,
Federal Home Loan Bank, or National
Credit Union Administration Central Li
quidity Facility maintains such funds in
the form of balances in a Federal Reserve
bank of which it is a member or at which
it maintains an account. Balances re
ceived by a depository institution from a
second depository institution and used to
satisfy the reserve requirement imposed
on such second depository institution by
this section shall not be subject to the re
serve requirements of this section im
posed on such first depository institution,
and shall not be subject to assessments or
reserves imposed on such first depository
institution pursuant to section 7 of the
Federal Deposit Insurance A ct (12
U.S.C. 1817), section 404 of the National
Housing A ct (12 U.S.C. 1727), or sec
tion 202 of the Federal Credit Union Act
(12 U.S.C. 1782).
(2) The balances maintained to meet the
reserve requirements of subsection (b) by a
depository institution in a Federal Reserve
bank or passed through a Federal Home
Loan Bank or the National Credit Union
Administration Central Liquidity Facility
or another depository institution to a Fed
eral Reserve bank may be used to satisfy
liquidity requirements which may be im
posed under other provisions of Federal or
State law.
28
[12 U S C 464 ]
(g) In estimating the reserve balances re
quired by this Act, member banks may deduct
from the am ount of their gross demand depos
its the amounts of balances due from other
banks (except Federal Reserve banks and for
eign banks) and cash items in process of col
lection payable immediately upon presenta
tion in the U nited States, within the meaning
of these term s as defined by the Board o f Gov
ernors of the Federal Reserve System.
[12 U S C 465.]
SECTION 11 —Powers of the Board of
Governors of the Federal Reserve System
The Board of Governors of the Federal Re
serve System shall be authorized and
empowered:
*
*
*
*
*
(c) To suspend for a period not exceeding
thirty days, and from time to time to renew
such suspensions for periods not exceeding fif
teen days, any reserve requirements specified
in this Act.
*
*
*
*
*
(e) To add to the number of cities classified
as reserve cities under existing law in which
national banking associations are subject to
the reserve requirements set forth in section
[nineteen] of this Act; or to reclassify existing
reserve cities or to term inate their designation
as such.
[12 U S C 248 ]
*
*
*
*
*
SECTION 25 — Foreign Branches
[1 2 U S C 4 6 1 ]
*
(0 The required balance carried by a mem
ber bank with a Federal Reserve bank may,
under the regulations and subject to such pen
alties as may be prescribed by the Board of
Governors of the Federal Reserve System, be
checked against and withdrawn by such mem
ber bank for the purpose of meeting existing
liabilities.
*
*
*
*
Any national banking association possessing a
capital and surplus of $1,000,000 or more may
Statutory Provisions
Regulation D
file application with the Board of Governors
of the Federal Reserve System for permission
to exercise, upon such conditions and under
such regulations as may be prescribed by the
said board, the following powers.
*
[12
*
*
*
*
use 601.]
SECTION 25(a)—Banking
Corporations Authorized to Do Foreign
Banking Business
•
*
*
*
*
Each corporation so organized shall have
power, under such rules and regulations as the
Board of Governors of the Federal Reserve
System may prescribe:
(a) To purchase, sell, discount, and negoti
ate, with or without its indorsement or guar
anty, notes, drafts, checks, bills of exchange,
acceptances, including bankers’ acceptances,
cable transfers, and other evidences of indebt
edness; to purchase and sell with or without
its indorsement or guaranty, securities, in
cluding the obligations of the United States or
of any State thereof but not including shares
of stock in any corporation except as herein
provided; to accept bills or drafts drawn upon
it subject to such limitations and restrictions
as the Board of Governors of the Federal Re
serve System may impose; to issue letters of
credit; to purchase and sell coin, bullion, and
exchange; to borrow and to lend money; to
issue debentures, bonds, and promissory notes
under such general conditions as to security
and such limitations as the Board of Gover
nors of the Federal Reserve System may pre
scribe; to receive deposits outside of the U nit
ed States and to receive only such deposits
within the United States as may be incidental
to or for the purpose of carrying out transac
tions in foreign countries or dependencies or
insular possessions of the United States; and
generally to exercise such powers as are inci
dental to the powers conferred by this A ct or
as may be usual, in the determination o f the
Board of Governors of the Federal Reserve
System, in connection with the transaction of
the business of banking or other financial op
erations in the countries, colonies, dependen
cies, o r possessions in which it shall transact
business and not inconsistent with the powers
specifically granted herein. Nothing contained
in this section shall be construed to prohibit
the Board of Governors of the Federal Re
serve System, under its power to prescribe
rules and regulations, from limiting the aggre
gate am ount of liabilities of any or all classes
incurred by the corporation and outstanding
at any one time. W henever a corporation or
ganized under this section receives deposits in
the United States authorized by this section it
shall carry reserves in such am ounts as the
Board of Governors of the Federal Reserve
System may prescribe for member banks of
the Federal Reserve System.
*
[12 USC 615.]
*
*
*
*
International Banking Act of 1978
12 U S C 3105; 9 2 S tat. 620; Pub. L . 9 5 -3 6 9 (S eptem b er 17, 197 8 )
SECTION 7—Authority of Federal
Reserve System
( a ) ( 1 ) ( A ) Except as provided in paragraph
(2) of this subsection, subsections (a),
(b ), (c), (d ), (f), (g ), (i), (j), 0 0 . and
the second sentence of subsection (e) of
section 19 of the Federal Reserve Act
shall apply to every Federal branch and
Federal agency of a foreign bank in the
same manner and to the same extent as if
the Federal branch or Federal agency
were a member bank as that term is de
fined in section 1 of the Federal Reserve
Act; but the Board either by general or
specific regulation or ruling may waive
the minimum and maximum reserve ra
tios prescribed under section 19 o f the
Federal Reserve A ct and may prescribe
any ratio, not more than 22 per centum,
for any obligation of any such Federal
branch or Federal agency th at the Board
may deem reasonable and appropriate,
taking into consideration the character of
business conducted by such institutions
and the need to maintain vigorous and
fair competition between and among
such institutions and member banks. The
Board may impose reserve requirements
on Federal branches and Federal agen
cies in such graduated m anner as it
deems reasonable and appropriate.
(B ) A fter consultation and in coopera
tion with the State bank supervisory au
thorities, the Board may make applicable
to any State branch or State agency any
requirement made applicable to, or
which the Board has authority to impose
upon, any Federal branch o r agency un
der subparagraph (A ) o f this paragraph.
(2) A branch or agency shall be subject to
this subsection only if (A ) its parent for
eign bank has total worldwide consolidated
bank assets in excess o f $1,000,000,000; (B)
its parent foreign bank is controlled by a
foreign company which owns or controls
foreign banks th at in the aggregate have to
tal worldwide consolidated bank assets in
excess of $1,000,000,000; or (C ) its parent
foreign h ank is controlled by a group o f for
eign companies that own or control foreign
banks th at in the aggregate have total
worldwide consolidated bank assets in ex
cess of $1,000,000,000.
*
*
*
*
*
[ 12 U S C 3105.]
31
Board of Governors of the Federal Reserve System
Amendments to Regulation D
Reserve Requirements
of Depository Institutions*
May 1982
1. Effective April 28, 1982, section 204.3(d)
is amended by adding at the end thereof a
new sentence to read as follows:
SECTION 204.3— Computation and
Maintenance
*
*
*
*
*
shall be 100 percent of the required
reserves com puted under section
204.3 starting with the maintenance
period that begins eight days after the
com putation period during which
such institution has daily average total
transaction accounts, nonpersonal
time deposits and Eurocurrency liabil
ities of $50 million or more.
(d) * * *
(3) * * * The Board may require
any depository institution that is expe
riencing above-normal growth to re
port on a weekly basis prior to report
ing $ 15 million or more in total depos
its for two consecutive calendar
quarters.
2. Effective
A pril
28,
1982,
section
2 0 4 .4 (e)(2 ) is revised to read as follows:
SECTION
Adjustments
*
*
*
204.4— Transitional
3. Effective April 29, 1982, section 204.9(a)
is revised to read as follows:
SECTION 204.9— Reserve Require
ment Ratios
(a) Reserve percentages. The following
reserve ratios are prescribed for all de
pository institutions, Edge and agree
m ent corporations and United States
branches and agencies of foreign banks:
Category
Reserve requirement
N E T T R A N S A C T IO N
ACCO UNTS
*
*
(e) De novo institutions. * * *
(2) N otw ithstanding paragraph (1 ),
the required reserves of any deposito
ry institution that—
(i) was not engaged in business on
November 18, 1981; and
(ii) has $50 million or more in dai
ly average total transaction ac
counts, nonpersonal time deposits
and Eurocurrency liabilities for any
com putation period after com menc
ing business
* F o r this regu lation to be com plete, as a m e n d e d effec
tive A p ril 29, 1982, retain:
• R egulation D p am p h let d ated M a r c h 1982 (see in
sid e c o v e r)
• this slip sheet
S0-S26 m illio n
O v e r $ 2 6 m illio n
3%
o f am o unt
$ 7 8 0 ,0 0 0 plus 1 2 %
o f a m o u n t over
$26 m illio n
N O N P E R S O N A L T IM E
D E P O S IT S
B y o rig in a l m a tu rity
(o r n o tice p e rio d ):
less th a n 3^ years
3%
3 j years o r m o re
0%
EUROCURRENCY
L IA B IL IT IE S
3%
@FedFRASER