Full text of Federal Reserve Bank of New York Circulars : Rules Regarding Delegation of Authority : Amendments

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4 t /W
_
July 12, 1979

To the Addressee:
Enclosed is a copy of amendments, effective October 17, 1978
and March 21, 1979» to the "Rules Regarding Delegation of Authority" of
the Board of Governors of the Federal Reserve System.

The amendments

relate to the delegation of Board authority for a wide range of Federal
Reserve activities to the Board's staff and to the Reserve Banks.
Also enclosed is a copy of an erratum sheet, correcting an error
in the Board's Regulation Y pamphlet "Bank Holding Companies and Change in
Bank Control," which was issued on April 5, 1978.




Circulars Division
Federal Reserve Bank of New York

Board of Governors of the Federal Reserve System
RULES REGARDING DELEGATION OF AUTHORITY
AMENDMENTS

Effective October 17, 1978, section 265.2(j) is
deleted and section 265.2(d) is amended as fol­
lows:
SECTION 265.2—SPECIFIC FUNCTIONS
DELEGATED TO BOARD EMPLOYEES
AND TO FEDERAL RESERVE BANKS
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amount approved may not exceed in any budg­
etary year one hundred thousand dollars ($100,000)
for each Reserve Bank and seven hundred fifty
thousand dollars ($750,000) for all Reserve Banks
in the System.

*

Effective March 21, 1979, section 265.2 is
amended as follows:
(d)
The Staff Director for Federal Reserve
1. Section 265.2(b) is amended by adding a
Bank Activities or the Staff Director’s designee
new paragraph (8) to read as follows:
is authorized:
SECTION 265.2— SPECIFIC FUNCTIONS
* * * * *
DELEGATED TO BOARD EMPLOYEES
(3) Under the provisions of the third paragraph
AND TO FEDERAL RESERVE BANKS
of section 16 of the Federal Reserve Act (12
* * * * *
U.S.C. 413), to apportion credit among the Re­
serve Banks for unfit notes that are destroyed,
(b) The General Counsel of the Board (or in
giving consideration to the net number of notes
the General Counsel’s absence, the acting Gen­
of each denomination that were issued by each
eral Counsel) is authorized:
Reserve Bank during the preceding calendar year.
* * * * *
(4) Under the provision of §§ 216.5(b), 216.5(d),
and 216.6 of this chapter (Regulation P), with
(8)
to approve provisions of Federal Reserve
respect to Federal Reserve Banks and branches
Bank operating circulars related to uniform
(i) to require reports on security devices;
services.
(ii) to require special reports; and
2. Section 265.2(e) is deleted and reserved.
(iii) to determine in view of the provisions
3. Section 265.2(d) is amended by revising
of §§ 216.3 and 216.4 whether security devices
paragraphs (1), (2) and (5) and adding new para­
and procedures are deficient in meeting the re­
graphs (6)— to read as follows:
(8)
quirements of Part 216, to determine whether
such requirements should be varied in the circum­
SECTION 265.2— SPECIFIC FUNCTIONS
stances of a particular banking office, and to
DELEGATED TO BOARD EMPLOYEES
require corrective action.
AND TO FEDERAL RESERVE BANKS
(5) To approve or disapprove supplementary
* * * * *
budget requests and special incentive programs to
improve operations or reduce costs, provided that
(d)
The Staff Director for Federal Reserve
the Board has previously approved the budget of
Bank Activities or the Staff Director’s designee
the requesting Reserve Bank and provided that
is authorized:
the supplemental request adheres to the Board’s
(1) To approve
general expense guidelines and such guidelines as
(i)
requests of up to $500,000 for each Re­
the Board may have imposed in approving the
serve Bank for the purchase or iease of computer
Reserve Bank’s budget and provided that the
mainframes, if the acquisition is consistent with

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For these Rules to be complete, retain:
1) Pamphlet amended effective August 2, 1978.
2) Amendments effective October 19, 1978. January 1. 1979,
March 10, 1979, and April 26, 1979.
3) This slip sheet.
P R IN T E D IN N EW YORK
AT Cir. No. 85991

(Over)

the long-range automation plan approved by the full depreciation before 40 years after the date
Board of Governors, and
of completion of the structure, and
(ii)
requests of up to $500,000 for each Re­ (iv)
write-down of Government securities
serve Bank for purchase or lease of automation below cost, including establishment of a valua­
or communications equipment not specifically in­ tion reserve.
cluded in the long-range automation plan approved
4.
Section 265.2(f) is amended by revising
by the Board of Governors, except computer paragraphs (25) and (34) and adding new para­
mainframes.
graphs (39—56) to read as follows
(2)
To approve proposed remodeling or reno­
SECTION 265.2— SPECIFIC FUNCTIONS
vation of or additions to Reserve Bank or Branch
DELEGATED TO BOARD EMPLOYEES
buildings if the cost is over $500,000, but not
AND TO FEDERAL RESERVE BANKS
over $1,000,000, and if the project has been in­
cluded in the capital or operating budget ap­
* * * * *
proved by the Board of Governors.
(f) Each Federal Reserve Bank is authorized:
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(5) To review Reserve Bank agreements with
architects and other consultants for new con­
struction or renovation projects over $100,000,
but not over $1,000,000.
*

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*

(25) To set the salaries of its officers below the
level of First Vice President (including the Gen­
eral Auditor) within guidelines issued by the
Board of Governors.

* *
*

(6) Within the contingency allowance for a
new building project, to approve individual con­
struction change orders over $500,000 but not
over $1,000,000.

*

*

*

*

(34) Under the provisions of sections 3 and
11j of the Federal Reserve Act (12 U.S.C. 521
and 248 (j)) to undertake remodeling, renovation
of or addition to its existing buildings or those
of its branches if the expenditure for any com­
pleted project is not over $500,000, and if it has
been included in the capital or operating budget
approved by the Board of Governors.

(7) To exercise supervision over the following
matters relating to Federal P.eserve notes:
(i) printing orders and
(ii) contracts for shipment, giving considera­
tion to:
(a) the Jesirabiliiy of maintaining a twoyear reserve supply of $5 and $100 notes and a
one-year supply cf $ 1 notes, and
(b) awarding contracts to the lowest bid­
der determined to be qualified.

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*

*

*

(39) Under the provisions of the twenty-first
paragraph of section 4 of the Federal Reserve
Act (12 U.S.C. 306), to approve the appointment
of assistant Federal Reserve agents (including
representatives or alternate representatives of such
agents).
(40) Under the provisions of the sixteenth
paragraph of section 4 of the Federal Reserve
Act (12 U.S.C. 304), to classify member banks
for the purposes of electing Federal Reserve Bank
class A and class B directors, giving consideration
to:
(i) the statutory requirement that each of the
three groups shall consist as nearly as may be
of banks of similar capitalization, and
(ii) the desirability that every member bank
have the opportunity to vote for a class A or a
class B director at least once every three years.

(8) To modify the Reserve Bank Accounting
Manual (after considering the views of the Sub­
committee on Accounting Systems, Budgets and
Expenditures of the Committee on Management
Systems and Support Services of the Conference
of First Vice Presidents) in accordance with gen­
erally accepted accounting practices for banks,
except that the following will not be authorized:
(i) reserves for contingencies,
(ii) charge-off of land to below estimated
market value,
(iii) charge-offs of buildings, or special al­
lowances for depreciation that would result in




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2

(41) To increase its operating budget up to 1
per cent of the annual operating budget.
(42) To purchase or lease new automation or
communications equipment, except computer
mainframes, at a cost of up to $1,000,000, if
included in long-range automation plans and capi­
tal or operating budgets approved by the Board
of Governors.
(43) To set the salary structure for nonofficial
employees within guidelines issued by the Board
of Governors, and to approve payment of salary
above or below established salary ranges for one
year.
(44) To approve payment of separation allow­
ances upon the involuntary termination of em­
ployment of officers below the level of First
Vice President (separation payments made to the
General Auditor may be approved by the Chair­
man of the Board of Directors).
(45) In connection with building projects:
(i) to enter into agreements with architects
and other consultants up to $100,000;
(ii) to administer the contingency allowance;
(iii) within the contingency allowance for a
new building to approve construction change
orders up to $500,000;
(iv) to approve exceptions to Buy American
Policy for construction materials within author­
ized dollar limits; and
(v) to award contracts to other than the
lowest bidder within authorized dollar limits.
(46) To sell real property (prior consultation
with the Director of the Division of Federal Re­
serve Bank Operations is required for any prop­
erty appraised at more than $1,000,000).
(47) To purchase or lease new fixed or oper­
ating equipment, other than automation or com­
munications equipment, costing up to $250,000,
if identified in capital or operating budgets ap­
proved by the Board.
(48) To make changes in territories served by
offices within its district for specific functions.
(49) To extend the employment of officers and
employees, except the President and First Vice
President, for one year beyond mandatory retire­
ment age.




(50) To grant performance cash awards
(i) to Senior Vice Presidents, if approved by
the President, and
(ii) to the General Auditor, if approved by
the Chairman of the Board of Directors.
(51 i To extend the time within which a bank holding
company may acquire shares, a new bank to be
acquired by a bank holding company may be opened
for business, or a merger may be consumated in
connection with an application approved by the Board,
if no material change that is relevant to the proposal
has occurred since its approval.
(52) To extend the time within which a bank holding
company must file its annual report.
(53) To extend the time within which
(i) a State member bank may establish a
domestic branch,
(ii) a member bank may establish a foreign
branch, or
(iii) an “Edge Act” or “Agreement” corporation
may establish a branch or agency, if no material
change has occurred in the bank’s (or corporation’s)
general condition since the application was approved.
(54) To extend the time within which an “Edge Act”
or “Agreement” corporation or a member bank may
accomplish a purchase of stock that has been
authorized by the Board pursuant to section 25 or 25(a)
of the Federal Reserve Act, if no material change has
occurred in the general condition of the corporation or
the member bank since such authorization.
(55) To extend the time within which Federal
Reserve membership must be accomplished, if no
material change has occurred in the bank’s general
condition since the application was approved.

(56) To waive the penalty for deficient reserves by a
member bank if, after a review of all the circumstances
relating to such deficiency, the Reserve Bank
concludes that waiver of the penalty is warranted,
except that in no case shall a penalty for deficient
reserves be waived if the deficiency arises out of the
bank's gross negligence or conduct inconsistent with
the principles and purposes of reserve requirements.

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X
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BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

BANK HOLDING COMPANIES AND CHANGE IN BANK CONTROL

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ERRATUM: REGULATION Y
Correction to pamphlet amended effective April 5, 1978

The Regulation Y pamphlet amended effective
April 5, 1978, contains an error in the text of
§ 225.4(a)(2). This passage should read correctly
as set forth below:
SECTION 225.4 - NONBANKING ACTIVITIES
(a) Activities closely related to banking or
managing or controlling banks. * * *
(2)
operating as an industrial bank, Morris Plan
bank, or industrial loan company, in the manner
authorized by State law so long as the institution
does not both accept demand deposits and make
commercial loans; * * *

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[Ene. Cir. No. AT 8599]