Full text of Federal Reserve Bank of New York Circulars : 8810. Monetary Control Act of 1980

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MONETARY CONTROL ACT OF 1980
Reserve Requirements and Access to Services with Regard to
Certain Former Member Banks and Merged Banks
To A ll Commercial Banks, and Others Concerned,
in the Second Federal Reserve District:

The Board of Governors of the Federal Reserve System has adopted an interpretation of the
Monetary Control Act of 1980 and has amended its Regulation D, “Reserves of Member Banks.”
The Board’s action is designed to implement the Monetary Control Act as it applies to reserve
requirements for banks that were members of the Federal Reserve System on July 1, 1979 and
subsequently withdrew, and for member banks involved in mergers or consolidations since that
date. The interpretation, which is effective as of April 21, 1980, also deals with the availability of
Federal Reserve services to those banks.
The following is quoted from the text of the Board’s announcement:
The Monetary Control Act of 1980 provides that:
— A bank that was a member of the System on July 1, 1979 and withdrew between that time and March
30, 1980 is required to maintain reserves to the same extent as a member bank.
— A bank that withdraws from the System on or after March 31, 1980 must continue to maintain reserves
to the same extent as a member bank.
The Board has approved the following interpretations relating to provisions of the A c t :
1.

H ow the date of withdrawal of a member bank from the System is to be determined.

2. W aiving reserve requirements of former member banks for the period March 31 through August 27,
1980. These banks will be required to maintain full reserve requirements thereafter, with provisions for
limited extensions to avoid hardships in extraordinary circumstances.
3. H ow reserve requirements will be applied in the cases of banks that withdrew from the System on
or after July 1, 1979 due to merger or consolidation where:
(1 )

a nonmember bank merged or consolidated with a member bank and the surviving bank is a non­
member, when
(a ) the merger or consolidation took place between July 1, 1979 and August 27, 1980;
(b ) the merger or consolidation takes place on or after August 28, 1980, or

(2 )
4.

a surviving member bank merges with a nonmember bank after March 30, 1980.
H ow the date of a merger or consolidation will be determined.

5. Policy for access to Federal Reserve services, providing that banks maintaining full Federal reserves
pursuant to this interpretation will be given access to all Federal Reserve services.

Enclosed— for commercial banks and bank holding companies in this District— is the text of
the official notice of the Board’s action. It will be published in the F e d e r a l R e g i s te r and will also
be sent to you upon request directed to our Circulars Division. Questions on the determination of
dates of withdrawal, merger, or consolidation should be directed to our Domestic Banking Appli­
cations Department (Tel. No. 212-791-5863); questions relating to the maintenance of reserves
should be directed to our Accounting Department (Tel. No. 212-791-5250, 5251, 7769, or 7792).




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