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F E D E R A L R E S E R V E BANK O F N E W YO R K Circular No. 8331 April 26, 1978 REGULATION Q Temporary Suspension of Early Withdrawal Penalty in Connection with Weather-Related Conditions in Nebraska To A l l M e m b e r B a n k s , a n d O th e rs C on cern ed , in the S e c o n d F e d e r a l R e se rv e D is tr ic t: The Board of Governors of the Federal Reserve System has temporarily suspended, through September 30, 1978, the Regulation Q penalty for the withdrawal of time deposits from member banks prior to maturity by depositors who have suffered property or other financial loss as a result of the recent severe storms, ice jams, snowmelt, and flooding in the State of Nebraska. The Board of Governors’action is retroactive to March 24, 1978. Enclosed is a copy of the Board’s Order in this matter. Any questions regarding the Board’s action may be directed to our Consumer Affairs Division (Tel. No. 212-791-5919). P aul A. V olcker , President. Board of Governors of the Federal Reserve System REGULATION Q SECTION 217.4—PAYMENT OF TIME DEPOSITS BEFORE MATURITY Order Granting: Temporary Suspension of Early W ithdrawal Penalty Effective March 2U, 1978 through September 30, 1978 AGENCY! Board of Governors o f th e Federal Reserve System ACTION! Temporary suspension o f the regulation Q penalty normally Im posed. upon the withdrawal o f funds from, tim e deposits prior to m aturity. SUMMARY: T he Board o f Governors; acting, through its Secretary, pursuant to delegated authority, has suspended tem porarily th e regulation Q penalty for th e withdrawal of tim e deposits prior to m aturity from members banks for depositors affected by th e severe storm s, ice Jams, snowm elt, and flood* ing beginning about March 13.1978. in the S tate of Nebraska. EFFECTIVE DATE: March 24,19781 FOR FURTHER INFORMATION CONTACT; Allen L Raiken. A ssociate General Counsel, Legal Division. Board of Governors of the Federal Reserve System , W ashington, D.C. 20551. SUPPLEMENTARY INFORMATION!' On March 24. 1978, pursuant ta sec tion 301 of th e D isaster R elief Act o f 1974 (42 U.S.C. 5141) and Executive Order 11796 o f J td r 11, 1974. th e President, acting through th e Admin istrator of th e Federal Disaster-Assia* tanee Administration, designated th e following counties of the State of Ne braska. a major rttsaster area: Casa: t o Ifax. Dodge, Douglas, Jefferson; Nuckolls. Platte; Sarpy, Saundera and T hayer. The Board regards th e Presi dent's action as recognition by the Federal government th at a disaster o f major proportions haabccurred. The President’s designation enables victim s of th e disaster to qualify for special emergency financial assistance. The Board believes it appropriate to pro vide. an additional measure of assis tance to victims, by temporarily sus pending the regulation Q early with drawal penalty.*■ The Board's action permits a member bank, wherever lo cated, to pay a tim e deposit before ma tu rity w ithout imposing this penalty upon a showing that th e depositor has suffered property or other financial loss in the disaster area as a result of the severe storm s, ice jams; snowmelt, and flooding. A member bank should obtain from a depositor seeking to withdraw a tim e deposit pursuant to th is action a sighed statem ent describ ing fully th e disaster-related Joss. T his statem ent should be approved and cer tified by an officer of th e bank. T his action will be retroactive to March 24, 1978, and will remain in effect until 12 midnight Septem ber 30, 1978. ; Section 19(J) of th e Federal Reserve Act (12. UJS.CL 371b> provides th at no member bank sh all pay any tim#» de posit before m aturity except upon such conditions and- in accordance w ith such rules and regulations as may be prescribed by the Board. The Board has determined it to be in the overrid ing public interest to suspend th e pen alty provision in &217.44d> o f regula tion Q for the benefit of depositors suffering disaster-related losses within those geographical area of the State of Nebraska officially designated a major disaster area by the President. T he Board, in granting thU temporary suspension, encourages member hanirq US permit^ penalty-free withdrawal before maturity of tim e deposits for depositors, who have suffered disasterrelated losses within the designated di saster area In view o f th e urgent n eed to pro vid e im m ediate assistan ce to relieve th e finan cial hardship b e in g su ffered b y persons directly a ffected by th e severe dam age and d estru ction occa sion ed by th e flooding in th e d esign at ed cou n ties of N eb ra sk a th e Board finds th a t good cause ex ists for dis p en sin g w ith n otice and public partici pation referred to in section 553(b) o f title 5 o f th e U nited S ta tes Code w ith repect to th is action and th a t public procedure w ith regard to th is action w ould be contrary to th e public in ter est. B ecause o f th e need to provide as sista n ce as soon as possible and be cause th e Board’s action relieves a re striction, th e Board finds th a t th ere is good cause to m ake th e action effec tive Im m ediately. B y order o f th e Board o f Governors, actin g th rou gh its S ecretary, pursu an t to delegated au th o rity (12 CFR 265.2(a)(18)), April 7, 1978. T h xo do ri E. A l l iso n . S e c r e ta r y o f th e B o a r d . LFR Doc 78-9850 Filed 4-12-78; 8:45 am) 'Sec. 2IT.4(dX o f regulation Q provides that where a time deposit, or any portion thereof, ia paid before maturity, a mem bee bank, may pay interest on the am ount With draw n at a rate not to exceed th a t currently prescribed for a savings deposit and th at tha depositor shall forfeit 3 months of interest payable af snch rate-. PRINTED IN NEW YORK, FROM FEDERAL REGISTER, V O L 43, N O . 77 F-ic. Cir No.
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