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May 30, 1980
To the Addressee:
As indicated in this Bank’s Circular No. 8838, we are enclosing
copies of the text of the regulatory changes that reflect the actions taken
on May 22, 1980, by the Board of Governors of the Federal Reserve System to
modify its credit restraint program:
(1)
Amendment to Subpart A (Consumer Credit) of the Credit Restraint
regulation, to reduce the special deposit requirement to an
amount equal to 7-1/2 percent of the amount by which a creditor's
outstanding covered credit during a month exceeds its base.
(2)
Amendment to Subpart B (Short Term Financial Intermediaries) of
the Credit Restraint regulation, to decrease the special deposit
ratio to 7-1/2 percent for creditors subject to this subpart.
(3)
Amendment
Restraint
nonmember
a covered
(4)
Amendment to Subpart D (Reports) of the Credit Restraint regulation,
to reduce the reporting burden under the program on commercial banks,
U.S. branches and agencies of foreign banks, and on finance compa
nies and bank holding companies, and to discontinue the reporting
requirements for large corporate borrowers.
(5)
Amendment to Regulation D (Reserves of Member Banks), to decrease
the marginal reserve requirement ratio, for member banks, Edge and
Agreement Corporations, and certain U.S. branches and agencies of
foreign banks, to 5 percent and to increase, generally, a covered
institution's managed liabilities base.
to Subpart C (Nonmember Commercial Banks) of the Credit
regulation, to decrease the special deposit ratio for
commercial banks to 5 percent and to increase, generally,
bank's managed liabilities base.
Additional copies of the enclosures will be furnished upon
request.
Circulars Division
FEDERAL RESERVE BANK OF NEW YORK
TITLE 1 2 —
CHAPTER
SUBCHAPTER A
II —
-- B O A R D O F
BANKS AND BANKING
FEDERAL
GOVERNORS
RESERVE
OF
[Regulation
( D o c k e t N o.
Part
204
—
AGENCY:
Board
of
ACTION:
Final
rul e .
SUMMARY:
Governors
On October
to
establish
an
by
which
total
the
and Agreement
of
foreign
6,
8 per
1979,
liabilities.
of
managed
exceeds
On March
14,
requirement
ratio
managed
liabilities
base
reduction
and
in
balances
upon
has
an
an
due
cent
and,
of
institution
EFFECTIVE
to
be
day
DATE:
total
period
Division,
20551.
SUPPLEMENTARY
amended
member
branches
bank
26,
and
excess
No.
29,
is
and
to
to
cent
(and E d g e
base
by
to n o n - U n i t e d
other
credit
the
data,
marginal
an
institution's
amount
residents
Based
the
requirement
managed
the
States
institutions.
agencies
managed
the
other
reserve
and
of
reduce
or
D
amount
branches
increase
and
7 per
loans
effective
Board
ratio
liabilities
to
base
for
period
liabilities
marginal
reserves
beginning June
outstanding
12,
during
required
1980,
the
seven-
1980.
Paul
Gilbert
S.
of
Part
cent
the
204)
amount
and Agreement
of
foreign
of
$1
banks
billion
outstanding
6,
1979,
to
impose
Reserve
the
Board
the
System,
of
a marginal
by w h i c h
with
Assistant General
(202/452-3281),
the
total
Corporations)
exceeds
during
whichever
Schwartz,
Attorney
t he F e d e r a l
On October
(12 C F R
T.
Pilecki,
of G o v e r n o r s
on
acted
cent
of
of
banks
States
Regulation
the
cent.
CONTACT:
or
$100 mill i o n ,
8838]
gross
increase
managed
(and E d g e
agencies
in
or
Cir.
D
8 per
liabilities
1979)
[Ref.
of
greater
seven-day
INFORMATION:
banks
assets
managed
Board
Regulation
requirement
of
the
INFORMATION
Board
banking
per
member
on
institution's
10 p e r
offices
to
action
during
(202/452-3625),
D.
C.
This
marginal
Legal
the
amended
requirement
of
an
the m a r g i n a l
7-1/2
beginning May
FOR FURTHER
Counsel
by
of
System.
of G o v e r n o r s
reserve
8 to
the
recent
generally,
maintained
against
of
to d e c r e a s e
5 per
an
1980,
foreign
Reserve
certain United
institution's
from
evaluation
determined
Board
amount
from
by
Requirements
liabilities
and
the
reserve
of
the
SYSTEM
MEMBER BANKS
Federal
cent marginal
Corporations)
banks
t he
RESERVE
D]
OF
Reserve
of
FEDERAL
R-0304)
RESERVES
Marginal
THE
SYSTEM
total
Governors
reserve
managed
and United
worldwide
amount
of
base
period
(September
(44
liabilities
States
consolidated
the
is g r e a t e r
Washington,
t he
institution's
13-
F e d . R e g . 60071).
-2 -
On March
ratio
14,
1980,
to 10 p e r
the
cent
F e d . R e g . 17924).
deposits
in
denominations
less
than
one year;
of
less
than
one
required
agencies;
one
with
parties
year
o n U.
other
and
(4)
S.
sales
to r e l a t e d
to U.
S.
the
financial,
to
dampen
data,
the
ratio
to
Based
upon
Board
has
5 per
maintenance
period
an
evaluation
This
institutions* subject
the
determined
reserve
ending
September
lesser
of
26,
21,
1.075
or
its
a
reported
May
21,
1980,
(107.5 per
daily
average
ending
base
of
cent
total
September
of
such
liabilities
daily
average
balances
week
is
of
managed
will
an
not
be
28,
liabilities
institution
period
that
September
loans
The
28,
offices
any
into
Federal
re
offices,
were
office
to better
excesses
thereby
during
the
8 of
serve
f or
f or
will
by
a net
13-26,
1979.
the
statement
for
the
an
base
lender
198 0 ,
of
base
the
t he
an
institution
period
ending
institution's
the
to
period
amount.
be
residents
of
the
will
reduced
the
and
during
such
was
the
liabilities
institution's
statement
and
from March
a net
13-26,
not
in
gross
loans
period
that
liabilities
managed
by w h i c h
(September
managed
if
new managed
amount
base
week
$107.5 million
such
September
for
period
the
during
example,
because
institution
be
multiplied
fourteen-day
amount
institution
computation
FR 2414d,
be
an
shall
institutions
The
if
computation
States
period
liabilities
program.
fourteen-day
then
week
addition,
managed
th e
continue
average
requirement
reserve
29,
if
the
other
In
For
the
1980,
1980.
liabilities
million,
above
t he
reserve
the
credit
reserve
for
of
Form
197 9 .
base
of
and other
requirement
base would
$100 million.
was
amount
However,
$105
daily
base
during
below
12,
to non- U n i t e d
lowest
during
1980.
reduced
be
increased
May
June
$105 million,
liabilities
the
outstanding
to M a y
be
after
new
liabilities
was
place
managed
base
its
would
foreign
than
less
foreign
and
banking
take
for
26,
million).
1979,
gross
from
lower
balances
1980
due
of
of
entered
speculative
reserve
line
total
liabilities
cannot
periods
bank
liabilities
base
September
$100
The m a n a g e d
computation
managed
average
institution
base
maturities
government
banking
actions
beginning May
reported on
managed
26,
S.
the m a r g i n a l
base
liabilities
$100 million,
times
recent
t he
period
its
ending
managed
of
the m a r g i n a l
liabilities
as
daily
fourteen-day period
has
to
1979,
1980,
maturities
original
to m a i ntain
curb
(45
time
institutions
securities
these
help
on Thursday,
managed
its m a n a g e d
ending Ma y
times
of
of
(1)
maturities
foreign
to decrease
to a d j u s t
computation
borrower
f r o m U.
and member
reduction will
beginning
for
a net
and
from
with
depository
original
of
original
and commodity markets
determined
Board
For
total
with
required
credit,
the
reserve
liabilities
forces.
the
was
has
bank
of
agency
purposes
marginal
managed
borrowings
with
offices
The
more
reserves
borrowings
exchange
cent.
or
and
the
of
include
offices
institutions
foreign
inflationary
base
funds
agreements
of
foreign
S.
Federal
residents.
expansion
in
increase
t he
$100,000
U.
Eurodollar
loans
to
Federal
government
than
asset
control
of
from
repurchase
year
acted
adjust
liabilities
(2)
to m a i n t a i n
(3)
than
serves;
to
Managed
of
not
Board
and
1979),
change
during
6,
borrower
for
the
-3-
the
Board
deferral
to
this
In o r d e r
to achieve
for
cause
of
good
effective
action
is
These
under
§§
461,
Act
of
601
Effective
is
§
(12 U . S . C .
June
revised
204.5
s e q .) a n d
as
12,
taken
1980,
the
of
the
(3) .
(2)
daily
average
the
the
beginning
exceeds
the
accordance
with
the
public
interest.
Board's
Reserve
regard
authority
Act
(12 U . S . C .
International
Banking
(12 C F R
204.5)
bank
of
i ts
period ending
States
assets
by w h i c h
reserve
shall
equal
total
eight
maintain
to
as
5 per
managed
days
maintenance
base
branches
a g e n c y of
in
excess
against
a daily
cent
of
average
t he
liabilities
prior
to
period
determined
the
and
of
its
$1
billion
of
in
t he
during
beginning
exceeds
t he
accordance
*
foreign
shall
with
worldwide
maintain
5 per
managed
days
as
a daily
cent
liabilities
prior
maintenance
base
banks.
total
to
total
eight
reserve
liabilities
(3).
of
with
equal
i ts
ending
seven-day
managed
subparagraph
bank
liabilities
daily average
corresponding
agencies
a foreign
computation period
institution's
with
bank
deposits
liabilities
balance
th e
*
* * *
seven-day
of
553(b)
Regulation D
*
A member
time
average
b r anch or
reserve
amount
during
of
*
seven-day
United
States
consolidated
of
the
bank's managed
A United
and
§
the
t he
quickly,
procedure,
Requirements.
its
computation
corresponding
subparagraph
to
7 of
204.5
*
banks.
against
by w h i c h
member
section
section
Reserve
Member
balance
seven-day
to
Federal
action more
REQUIREMENTS
Marginal
(1)
amount
5 U.S.C.
contrary
t he
this
public
3105).
*
reserve
of
pursuant
of
of
notice,
follows:
RESERVE
(f)
and
25(a)
under
§
th e
provisions
are
25 a n d
objectives
that
impracticable
19,
et
1978
date
actions
sections
the
finds
to
t he
period
determined
in
* *
(3)
Managed liabilities bas e .
D u r i n g the s e v e n - d a y reserve
c o m p u t a t i o n p e r i o d b e g i n n i n g M a y 29, 1 9 8 0 , a n d d u r i n g e a c h s e v e n - d a y
reserve
computation period
of
a member
bank
of
a foreign
or
bank
("family")
(i)
basis,
day
is
base
shall
be
reserve
a net
period
the
For
ending
lesser
computation
of
1.075,
during
fourteen-day
shall
total
September
t he
period
times
of
or
the m a n a g e d
United States
a member
borrower
multiplied
the
thereafter,
a f a m i l y of
be
bank
determined
or
family
managed
26,
t he
period
daily
1979,
ending
21,
as
and
that,
on
average
the
fourteen-
liabilities
liabilities
1980,
a daily
during
its m a n a g e d
average
base
agencies
follows:
liabilities
reported managed
ending May
liabilities
branches
base
(Form F R
of
its
total
September
26,
1979.
for
2414d,
line
managed
For
base
the
8)
liabilities
each
-4 coraputation p e r i o d
base
of
period
a member
by
the
beginning
bank
amount
or
after
family
by w h i c h
(A)
(B)
May
shall
its
is
lower
during
than
outstanding
May
to
28,
the
the
during
1980.
next
was
gross
and
loans
gross
balances
other
institutions—
deposits
limitations
base
period
basis,
average
of
which
of
of
United States
credit
is
26,
resident
extended)
District
of
or
entity organized
other
any
branch
Credit
other
Columbia;
or
office
extended
foreign
or
more
to
a United
such
business
of
the
from
the
Q pursuant
after
such
May
loans
difference
liabilities
liabilities
1979,
be
less
million.
the
exempt
between March
and
A
offices
/
to
7
p e r i o d e n d i n g S e p t e m b e r 26, 1 9 7 9 , i t s
t h e s u m o f it s d a i l y a v e r a g e n e g a t i v e
18/
are
Regulation
day base
s h a l l be
time
residents—
6,
28,
and
1980,
shall
be
1980,
balances
and
rounded
base
during
than
for
the
an
institution
fourteen-day
$100 m i l l i o n .
(ii)
For a m e m b e r bank or f a m i l y that, o n a d a i l y a v e r a g e
a n e t l e n d e r of total m a n a g e d l i a b i l i t i e s d u r i n g the f o u r t e e n -
is
$100
of
institutions,
beginning
such
liabilities
computation
$2 m i l l i o n .
managed
September
the
foreign
7 or
amount
the m a n a g e d
of
managed
average
from
thereof,—
representing
will
borrower
ending
of
computation period
amount
event
due
time
daily
the
during
to n o n - U n i t e d S t a t e s
rate
lowest multiple
a net
daily
computation period
any
The
In n o
that
any
lowest
1980,
reduced
lowest
§ 217.3(g)
outstanding
28,
be
to
any
Any
State
individual
of
corporation,
therein
of
a foreign
branch,
office,
corporations
resident
of
("foreign
other
if
foreign
any other
not
or
and
(c)
entity wherever
deemed
will
be
affiliates
of
the
t o be
used
organized.
affiliate
controlled
proceeds
the
t he
association
subsidiary,
be
(at
States
corporation");
affiliate")
will
t he
residing
the U n i t e d
partnership,
("domestic
located
domestic
that
(a)
any
therein
establishment
States
or
(b)
is:
in
m a n aged liabilities base
total managed liabilities
in
or
by o n e
credit
i ts
controlling
extended
foreign
domestic
corporation(s).
19/
and
Any
the
banking
office
District
located
of C o l u m b i a
of
outside
a
the
States
bank o r g a n i z e d
of
the U n i t e d S t a t e s
under
domestic
or
foreign
law.
20/
A
foreign
the U n i t e d
central
States
and Development
exempt
Regulation Q
bank,
or
a member,
any
such
international
as
the
(World B a n k ) , International
Development Bank,
entities
is
and
from
(12 C F R
other
foreign
interest
rate
2 1 7 . 3 ( g ) (3)).
organization
International
Bank
M o n e t a r y Fund,
international,
limitations
or
under
of
for
which
Reconstruction
Inter-American
supranational
§ 217.3(g)(3)
of
Board of Governors of the Federal Reserve System
CREDIT RESTRAINT
A M E N D M E N T S TO S U B P A R T S A, B, C, and D
(Modification of Credit Restraint Program)
[Docket
Part
229
-
No.
R-0300]
Credit
Restraint
[ S u b p a r t A]
Consumer
AGENCY:
Board
of
ACTION:
Final
Rule.
SUMMARY:
program
Governors
On March
14,
(12 C . F . R .
1980,
Part
that
sumer
credit
to m a i n t a i n
equal
to
of
program
the
15%
during
was
certain
t he
to
curb
of
consumer
of
t he
of
consumer
credit
its
deposit
requirement
a
consumer
creditor's
EFFECTIVE
FOR
credit
DATE:
FURTHER
to
an
outstanding
July
INFORMATION
(202/452-3274);
Counsel
would
with
certain
th e
creditor's
by
that
be
base.
in
the
the
equal
to
Gilbert
Division,
of
Governors
creditor's
INFORMATION:
a
increase
because
growth
March,
of
through
the
of
t he
a month
t he
in
t he
Board's
Board
reduce
t he
restraining
trends
of
The
by
has
the
therefore
special
amount
by
exceeds
which
it s
base.
L.
Robert
T.
E.
Egginton,
of
Mannion,
Schwartz,
the
Attorney
Federal
Deputy
Assistant
General
General
Counsel
(202/452-3786);
Reserve
System,
Legal
Washington,
20551.
SUPPLEMENTARY
the
covered
to
In
adopting
its
consumer
r e g u l a t i o n , p u r s u a n t to the C r e d i t C o n t r o l A c t (12
a s I m p l e m e n t e d by E x e c u t i v e O r d e r 1 2 2 0 1 , t h e B o a r d
amount
con
Reserve
purpose
Recent
7 1/2%
during
19,
of
The
regulation
regulation
types
outstanding
economy
appropriate.
restraint
March
Federal
modification
credit
CONTACT:
Margaret
C.
extend
credit
17927,
198 0 .
or
D.
Reg.
requirement.
restraint
amount
(202/452-3625);
Board
the
covered
covered
24,
that
System.
a consumer
Fed.
pressures
indicate
credit
45
creditor's
deposit
regulation
amended
the
Reserve
adopted
A;
deposit
which
credit
special
consumer
by
inflationary
growth
growth
Board
creditors
exceeds
imposition
Federal
Subpart
a special
amount
a month
t he
the
229,
1980)
credit
requires
of
Credit
of
trends
reduction
in
t he
in c o v e r e d
Board
covered
credit.
in c o n s u m e r
the
ratio
credit
regarded
Since
credit
to
be
as
that
the
credit
required
special
amount
as
appropriate
adoption
of
the
have
applied
led
the
Board
restraint
U .S.C. §§ 1 9 0 1-1909)
a d o p t e d 15% of a
deposit
to
regulation
to
in d e t e r m i n i n g
conclude
the
[Ref. Cir. No. 8838]
in m i d that
special
For this Regulation to be complete, retain:
1) Regulation pamphlet entitled “Credit Restraint,” adopted effective March 14, 1980.
2) Subpart D, effective March 28, 1980.
3) Amendment to Subpart B, effective March 28, 1980.
4) Amendments to Subpart A, effective April 2, 1980 and April 14, 1980.
5) This slip sheet.
restrain
deposit
requirement
the
month
July
of
24,
the
is
of
1980,
month
the
burden
by
The
good
cause
5 U.S.C.
to
the
§
Board
of
comment
the
its
as
public
§
hereby
amends
by
special
deposit
the
will
outstanding
it
is
useful
notice
the
deposit
period
be
for
beginning
equal
covered
and
public
while
that
to
credit
public
this
interest
maintaining
publication
purpose.
and
to
in
program,
possible,
regard
during
7 1/2%
during
base.
that
a
the
held
The
Board
procedure
action
are
to
reduce
its
of
ef
this
rule
therefore
provisions
unnecessary
for
of
and
contrary
Act
(12
interest.
to
i ts
as
substituting
of §
the
(a)
Each
deposit
average
amount
229,
"7%"
reads
229.4
covered
equal
of
Part
number
229.4(a)
special
authority
under
implemented
12 C . F . R .
SECTION
its
the
with
1901-1901),
sentence
as
with
special
restraint
serve
that
Pursuant
U.S.C.
the
be
creditor's
believes
not
553(b)
must
creditor's
promptly
finds
of
the
credit
would
Beginning
which
amount
which
exceeds
fectiveness,
1980,
the
amount
the
for
appropriate.
June,
to
as
-
by
S u b p a r t A,
for
the
set
forth
creditor
credit
12201,
"15,"
July
so
that
the
24,
Board
1980,
the
first
below:
OF
shall
cent
Control
Order
effective
number
MAINTENANCE
7 1/2 per
i ts c o v e r e d
the C r e d i t
Executive
of
SPECIAL
hold
t he
DEPOSIT
a non-interest
amount
outstanding
by
during
which
the
bearing
t he
month
exceeds
base.
*
By
System,
order
effective
*
of
the
Board
May
22,
1980.
*
of
*
Govervors
(Sign e d )
[SEAL]
-2-
*
of
the
Federal
Reserve
Theodore
E.
Allison
Theodore
E.
Allison
Secretary
of
the B o a r d
(Docket No. R-0301)
PART
229— CREDIT
RESTRAINT
[ S u b p a r t B]
S h o r t Terra F i n a n c i a l
AGENCY:
Board
of G o v e r n o r s
ACTION:
Final
Rule.
SUMMARY:
to
On March
14,
1980,
the C r e d i t C o n t r o l A c t
Executive
Order
12201
through money market
subsequently
was
of
to
the F e d e r a l
the
Board
(12 U . S . C .
restrain
funds
amended
Intermediaries
and other
on March
adopted
§§
the
Reserve
this
1901-1909)
expansion
similar
28,
System.
Subpart
as
of
short
Based
This
upon
by
terra c r e d i t
creditors.
1980.
pursuant
implemented
an
Subpart
evaluation
of r e c e n t c r e d i t data, t he B o a r d has d e t e r m i n e d to d e c r e a s e the s p e c i a l
d e p o s i t r a t i o f r o m 15 p e r c e n t t o 7- 1 / 2 p e r c e n t for c r e d i t o r s s u b j e c t
to
this
Subpart.
EFFECTIVE
to
be
1980,
FOR
DATE:
for
the
FURTHER
Counsel
INFORMATION
Division,
20551.
SUPPLEMENTARY
term
current
to
by
credit
28,
1980
credit
ratio
by
Subpart.
from
deposits
required
June
1980,
30,
CONTACT:
Gilbert
L.
Daniel
for
Order
(45
Subpart
14,
15 p e r
The
to
Board
cent
decreased
12201
to
Assistant General
Reserve
Board
restrain
adopted
§§
the
System,
Washington,
this
1901-1909)
expansion
of
similar
creditors
subsequently was
amended
by
has
to
Based
determined
7-1/2
per
ratio will
computation
upon
an
for
all
effective
during
the
period
beginning
the
of
special
creditors
for
maintenance
June
the
(45
Board
evaluation
to d e c r e a s e
cent
be
30,
(202/452-3711),
(12 U . S . C .
funds
June
1980.
Schwartz,
the
required
beginning
and
be m a i n t a i n e d
the
16,
Attorney
1980,
Act
F e d . R e g . 23642).
the
T.
deposits
period
the F e d e r a l
through money market
This
special
June
Rhoads,
of
On March
Executive
for
beginning
the C r e d i t C o n t r o l
data,
deposit
this
effective
or
INFORMATION:
F e d . R e g . 17930).
on March
is
seven-day maintenance
B o a r d of G o v e r n o r s
pursuant
implemented
short
the
(202/452-3625),
Legal
Subpart
action
during
computation period
D.C.
as
This
maintained
period
16,
covered
special
beginning
1980.
In
the
Board
provisions
and
order
for
of
contrary
good
5 U.S.C.
to
the
Pursuant
U.S.C.
§§
Restraint
to achieve
cause
§
553(b)
public
to
its
the
finds
objectives
that
the
with
of
notice
regard
to
this
and
action more quickly,
public
these
procedure
actions
are
impracticable
the C r e d i t C o n t r o l
Act
(12
interest.
authority
1901-1909)
the
Board
regulation
(12 C . F . R .
under
hereby
Part
amends
229)
Subpart B
effective
of
June
its C r e d i t
30,
1980,
as
follows:
in
its
1.
place
2.
its
place
In
section
229.14(a)(1),
bystriking
229.14(b),
striking
by
May
order
23,
"15"
and
and
inserting
inserting
of
the B o a r d
of G o v e r n o r s
of
t he F e d e r a l
Reserve
1980.
(Sign e d )
[ S EAL]
"15"
"7-1/2".
By
System,
In s e c t i o n
"7-1/2".
Theodore
E.
Allison
Theodore
E.
Allison
Secretary
of
the B o a r d
in
(Docket No. R-0302)
PART
229— CREDIT
RESTRAINT
[ S u b p a r t C]
Nonmember
AGENCY:
Board
of
ACTION:
Final
rule.
SUMMARY:
Pursuant
as
implemented
on
March
the
by
Based
to
the
the
System
Federal
of
upon
an
equal
of
recent
increase,
Reserve
Act
System.
(12 U . S . C .
Board
banks
that
are
not
members
to
of
10 per
of
cent
those
banking
credit
and
deposit
an
t he
banks
during
generally,
1901-1909)
provisions
bearing
outstanding
special
§§
adopted
a non-interest
liabilities
the
Banks
the
commercial
liabilities
to d e c r e a s e
and
12201
to m a i n t a i n
Reserve
evaluation
cent
Federal
Control
Order
managed
such m a n a g e d
t he
Credit
requiring
total
determined
5 per
to
of
Executive
1980,
the
of
by
Reserve
with
which
amount
has
14,
Federal
deposit
Governors
Commercial
ratio
amount
exceeds
a base
data,
from
institution's
of
special
the
period.
the
Board
10 per
managed
cent
liabilities
base.
EFFECTIVE
required
DATE:
to
day
period
May
29,
be
beginning
FOR FURTHER
L.
INFORMATION
Rhoads,
of
the
SUPPLEMENTARY
Subpart
be
nonmember
12,
1980,
implemented
Reserve
System
Federal
to
the
effective
for
commercial
for
the
Gilbert
Pilecki,
the
banks
special
for
computation
Reserve
System,
On March
14,
Credit Control
12201
banks
that
to m a i n t a i n
the
equal
of
outstanding
a covered
a
to
nonmember
bank
special
10 p e r
bank
during
Legal
1980,
(45
are
the
period
deposit
sevenbeginning
of
exceeded
a net
Assistant General
(202/452-3281),
Division,
the
D.C.
Board
(12 U . S . C .
§§
Board
members
the
adopted
the
period.
borrower
amount
of
Federal
deposit
with
managed
such m a n a g e d
Additionally,
of
This
the
by w h i c h
of
this
1901-1909)
bearing
total
or
of
20551.
F e d . R e g . 17932).
not
non-interest
cent
a base
that was
Schwartz,
Washington,
Act
Order
Reserve
T.
Attorney
(202/452-3711),
Executive
liabilities
S.
commercial
liabilities
requires
Paul
Attorney
by
requires
Federal
CONTACT:
INFORMATION:
pursuant
Subpart
the
by
June
(202/452-3625),
Governors
as
amendment will
1980.
Counsel
Daniel
This
maintained
managed
this
Subpart
liabilities
during
its
the
base
fourteen-day
by
an
domestic
offices.
based
the
on
States
residents
beginning
down
to
daily
Subpart
banks
does
not
(12 C . F . R .
are
§
Board
subject
cent
be
to
March
deposit
s u m of
from
of
1980.
That
of
States
upon
an
United
this
be
and
the
branches
bank
of
10 p er
and
then
other
rounded
of
in e x c e s s
reserve
from
This
agencies
assets
is
any computation
period.
branches
recent
the
is
banking
special
cent
effective
period
of
subtracted
base
from
to n o n - U n i t e d
for
is
reduce
period
offices
lending
difference
States
to
for
seven-day period
computation
loans
foreign
such
f or
to
lending
foreign
of
$1
requirements
and
agencies
of
Subpart.
to d e c r e a s e
from
gross
Board's marginal
evaluation
Subpart
the
to
1980,
foreign
computation
$2 m i l l i o n
liabilities
Other
12,
its
its
due
the
subject
in
total
subject
to
March
any given
consolidated
f or
corresponding
19,
multiple
to U n i t e d
ratio will
maintained
the
gross
managed
determined
this
for
world-wide
are
has
ending
reduction
balances
lowest
204.5(f)).
banks
Based
the
between
lower
of
the
adjustment
apply
total
that
foreign
after
largest
period
for
gross
the
average
with
billion
and
and
week
the
The
difference
institutions,
the
base
adjustment
5 per
special
beginning
the
and
credit
deposit
ratio
cent.
The
data,
f or
new
deposits
required
June
1980.
seven-day
12,
period
banks
5 per
to
The
beginning
May
covered
banks
29,
1980.
The
to m a k e
For
a covered
excess
day
be
Board has
a one-time
of
period
multiplying
by
7-1/2
12,
per
beginning
was
period
a net
ending March
million
may
not
daily
average
balances
week
is
due
lower
balances
was
than
28
The
managed
loans
foreign
the
13,
base
of
12,
will
liabilities
base
will
1980,
of
by
1.075.
will
by
2412d
for
However,
during
on M a r c h
12,
the
a
fourteen-
1980,
was
for
statement
-6-
any
The
such
base
during
reduced
that
February
bank's
t he
loans
week
for
an
statement
and
f or
institution
the
base
period
below
$100
million.
was
28
in
the
and gross
during
or
a bank
period
residents
of
1980.
be
reduced
by w h i c h
amount
liabilities
not
to be
amount
institutions
period
28,
continue
States
average
will
the
base
determined
f o r m F.R.
by
the
other
base
change
during
be
in
fourteen-
base.
to M a y
managed
1980)
not
base
the
liabilities
8 of
base.
liabilities
during
liabilities
whose
daily
the
1980
liabilities
will
1980,
to n o n - U n i t e d
lowest
borrower
- March
28,
offices
during
from March
a net
(February
gross
outstanding
period
that
of
from
its
May
15,
certain
managed
base
line
managed
liabilities
after
new
May
1980,
increase
The m a n a g e d
periods
12,
of
of
basis
its m a n a g e d
reported on
borrower
allow
managed
borrower
The
period
to
their
average
1980,
cent.
computation
computation
of
a net
base
that
in
a daily
bank's
$100
the
was
on
the
bank
day
that
million
determined
increase
ending March
increased
the
bank
$100
also
only
a net
- March
lender
12,
198 0 .
In order to achieve the objectives of this action more quickly,
the Board for good cause finds that the notice, public procedure, and
deferral of effective date provisions of 5 U.S.C. § 553(b) with regard
to these actions are impracticable and contrary to the public interest.
Pursuant to its authority under the Credit Control Act (12
U.S.C. §§ 1901-1909), the Board hereby amends Subpart C of its Credit
Restraint regulation (12 C.F.R. Part 229) effective June 12, 1980, as
follows:
SECTION 229.24— MAINTENANCE OF SPECIAL DEPOSIT
(a) During the seven-day maintenance period beginning June 12,
1980, and each deposit maintenance period thereafter, each covered bank
shall maintain a non-interest bearing special deposit equal to 5 per
cent of the amount by which the daily average of its total managed liabilities
during the seven-day computation period ending eight days prior to the
beginning of the corresponding seven-day maintenance period exceeds
its managed liabilities base as determined in accordance with paragraph (b).
*
*
*
(b) Managed liabilities base. During the seven-day deposit
computation period beginning May 29, 1980, and during each seven-day
deposit computation period thereafter, the managed liabilities base
of a covered bank shall be determined as follows:
(1) For a covered bank that, on a daily average basis,
was a net borrower of total managed liabilities during the
fourteen-day base period ending March 12, 1980, its base for
the computation period beginning May 29, 1980, shall be equal
to its base reported for the computation period beginning
May 15, 1980 (as reported on line 8 of form F.R. 2412d) multiplied
by 1.075. However, a covered bank whose base has never exceeded
$100 million shall not multiply its base by 1.075. The managed
liabilities base of a covered bank shall be reduced by the
amount by which its lowest daily average of
3/
(A) gross loans to non-United States residents—
and
3/ A United States resident is: (a) any individual residing (at the
time the credit is extended) in any State of the United States or the
District of Columbia; (b) any corporation, partnership, association
or other entity organized therein ("domestic corporation"); and (c)
any branch or office located therein of any other entity wherever organized.
Credit extended to a foreign branch, office, subsidiary, affiliate or
other foreign establishment ("foreign affiliate") controlled by one
or more such domestic corporations will not be deemed to be credit extended
to a United States resident if the proceeds will be used in its foreign
business or that of other foreign affiliates of the controlling domestic
corporation(s).
-7 -
(B) gross balances due from foreign offices of
other institutions— or institutions the time deposits
of which are exempt from the rate limitations of Regulation Q
pursuant to § 217.3(g) thereof,—
outstanding during any computation period beginning after
May 28,1980, is lower than the lowest daily average amount
of such loans and balances outstanding during the base period
or any computation period between March 13, 1980 and May 28,
1980. The amount of the reduction shall be rounded down to
the largest lower multiple of $2 million. However, in no
event will the managed liabilities base for a covered bank
that was a net borrower of managed liabilities during the
fourteen-day base period ending March 12, 1980, be less than
$100 million.
(2) For a covered bank that, on a daily average basis,
is a net lender of total managed liabilities during the fourteenday base period ending March 12, 1980, its managed liabilities
base shall be the sum of its daily average negative total
managed liabilities and $100 million.
4/ Any banking office located outside the States of the United States
and the District of Columbia of a bank organized under domestic or foreign
law.
5/ A foreign central bank, or any international organization, of which
the United States is a member, such as the International Bank for Reconstruc
tion and Development (World Bank), International Monetary Fund, InterAmerican Development Bank, and other foreign international, or supranational
entities exempt from interest rate limitations under § 217.3(g)(3) of
Regulation Q (12 C.F.R. § 217.3(g)(3)).
By order of the Board of Governors of the Federal Reserve
System, May 27, 1980.
(Signed) Theodore E. Allison
Theodore E. Allison
Secretary of the Board
[SEAL]
(Docket No. R-0303)
PART 229-CREDIT RESTRAINT
[Subpart D]
Reports Under Special Credit Restraint Program
AGENCY:
Board of Governors of the Federal Reserve System.
ACTION:
Final rule.
SUMMARY: Pursuant to the Credit Control Act (12 U.S.C. §§ 1901-1909)
as implemented by Executive Order 12201, under its Special Credit
Restraint Program issued on March 14, 1980, the Board has amended its
regulation to enable it to reduce the reporting burden on U.S. commercial
banks, and U.S. branches and agencies of foreign banks, finance companies,
U.S. bank holding companies, and to discontinue the reporting require
ments for large corporate borrowers.
EFFECTIVE DATE: May 27, 1980.
FOR FURTHER INFORMATION CONTACT: Gilbert T. Schwartz, Assistant General
Counsel (202/452-3625), Bronwen Mason, Senior Attorney (202/452-3564)
Legal Division, or Eleanor J. Stockwell, Senior Deputy Associate Director
(202/452-3651), Division of Research and Statistics, Board of Governors
of the Federal Reserve System, Washington, D.C. 20551.
SUPPLEMENTARY INFORMATION: On March 14, 1980, the Board announced
a Special Credit Restraint Program designed to encourage lenders and
borrowers, in their individual credit decisions, to take specific account
of the overall aims and quantitative objectives of the Federal Reserve
in restraining growth in money and credit generally. While compliance
with the Program guidelines is on a voluntary basis, the Board instituted
a reporting program, as authorized by section 1-104 of Executive Order
12201, to monitor developments in the credit markets and compliance
with the Program. Under this reporting program the affected lenders
were required to provide data periodically concerning types and amounts
of outstanding loans and selected corporations were required to provide
data on certain types of borrowing. (45 Fed. Reg. 22883) .
Based on an evaluation of recent banking and credit data,
on May 22, 1980, the Board announced that it would reduce the reporting
burden on U.S. commercial banks, U.S branches and agencies of foreign
banks, finance companies, and U.S. bank holding companies, which
should now file reports on a bimonthly basis. In addition, the Board
stated that it would discontinue reports by large corporate borrowers.
The first quarterly report for intermediate size banks due in June,
will be simplified, and the need for subsequent reports will be evaluated
after that checkpoint is passed.
In order to achieve the objectives of this action more quickly
the Board for good cause has determined that the notice and public
procedure provisions of 5 U.S.C. § 553(b) with regard to this action
are not in the public interest, and will not be followed.
Pursuant to its authority under the Credit Control Act (12
U.S.C. §§ 1901-1909) as implemented by Executive Order 12201 the Board
has amended sections 229.33 and 229.34 of Subpart D of its Credit
Restraint Regulation (12 C.F.R. § 229) to read as follows:
SUBPART D - Reports under Special Credit Restraint Program
*
*
*
*
*
SECTION 229.33— REPORTS BY LARGE LENDERS
(a) Large Commercial banks. Each U.S. commercial bank having
U.S. consolidated assets of $1 billion or more shall file such reports
on its activities as may be required by the Board from time to time
on forms prescribed by the Board in accordance with the instructions
thereto.
(b) U.S. agencies and branches of foreign banks. Each family
of U.S. offices of a foreign bank having worldwide banking assets of
more than $1 billion monthly shall file such reports on its activities
as may be required by the Board from time to time on forms prescribed
by the Board in accordance with the instructions thereto.
(c) U.S, bank holding companies. Each U.S. bank holding
company with U.S. consolidated financial assets of $1 billion or more
shall file such reports on its activities as may be required by the
Board from time to time on forms prescribed by the Board in accordance
with the instructions thereto.
(d) U.S. finance companies. Each U.S. finance company with
total business receivables outstanding (that is, all loans excluding
those made for personal, family or household uses) of $1 billion or
more shall file such reports on its activities as may be required by
the Board from time to time on forms prescribed by the Board in
accordance with the instructions thereto.
-1 0 -
SECTION 229.34— REPORTS BY INTERMEDIATE-SIZED COMMERCIAL BANKS
Each U.S. commercial bank with U.S. consolidated assets of
$300 million or more but less than $1 billion shall file such reports
on its activities as may be required by the Board from time to time
on forms prescribed by the Board in accordance with the instructions
thereto.
Board of Governors of the Federal Reserve System, effective
May 27, 1980.
Theodore E. Allison
Secretary of the Board
[SEAL]
-11-
@FedFRASER