Full text of Federal Reserve Notes : December 1983

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RESERVE BW

Reserve Notes
FEDERAL RESERVE BANK OF SAN FRANCISCO

•

December 1983

Serving Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Utah & Washington

NEW FEE SCHEDULES
FOR CHECK COLLECTION

NEW FEES FOR SECURITIES SAFEKEEPING
AND NONCASH COLLECTION SERVICES
New fee schedules for definitive se

ponents of the Federal Reserve's

All Federal Reserve Banks' revised

curities safekeeping and noncash
collection services were approved
by the Federal Reserve Board and

securities service. Definitive securi

fee schedules for commercial check
services became effective Decem

ed in the table below. Since this

ties safekeeping consists of vault
storage, primarily of municipal and
corporate securities. Noncash col
lection provides a payments mech
anism designed to collect items that
cannot be processed through normal

Bank does not offer definitive safe

check collection channels. These

keeping services or accept items for
collection that are payable outside

two services are interrelated as a

mies in the Federal Reserve's Inter-

district Transportation System.

the Twelfth District, certain fees are

large portion of bonds and coupons
collected by the Federal Reserve

omitted.

Banks are derived from securities

became effective October 27, 1983.
The fees for such services offered

by the San Francisco Bank are list

The revisions to the definitive secur

held by them in safekeeping.

ferentiation in account maintenance

Copies of the Board's notice are
available from our Corporate Ser
vices Department, (415) 974-2752.
For further information, please

fees based on the number of re

contact

ceipts and issues held in an account.

Officer of the Federal Reserve office

ities safekeeping service include
the elimination of the account switch

and bond redemption fees and a dif

Changes to the noncash collection
service include adding an out-ofdistrict component to the coupon
collection fee, and converting the
bond collection charge from a peritem to a per-transaction fee. The
out-of-district fee is a surcharge for
coupons payable outside the Fed
eral Reserve District in which they
are deposited for collection.

the

Securities

Services

serving your institution:

Ted Schroeder

(503)221-5907

Dean C. Gonnerman

Salt Lake City

(801) 322-7828

Don W. Sheets

Seattle

(206)422-5105
Kenneth L. Peterson

Both definitive securities safekeep
ing and noncash collection are com

Federal Reserve Bank of San Francisco
Current Prices

Definitive Safekeeping

Noncash Collection

With implementation of the new
schedules, the Federal Reserve has
fulfilled the requirements of the

Monetary Control Act to include the
cost of check float at the federal

funds rate in check prices. Overall,
the increase in fees is modest con

sidering that they include the first
full recovery of float costs.
direct send and consolidated inter-

territory check services, and check
services for in-zone depositors,
have been mailed to depository
institutions currently using those
services. If your institution does not
now use the Fed's interterritory
deposit services and would like to
see the schedules and learn about

their advantages, or if you require
additional information about speci
fic services, please call the Finan
cial Services Officer serving your
area: San Francisco — Martha Perry
at (415) 974-2127; Los Angeles —
Mary Ellen Martin at (213) 683-8318;
Portland —

Inter-

Bond

Local

District

Per$1000

Purchases and Sales

Collection

(per trans
action)

Coupon
(per
envelope)

Coupon

(per transaction)

Coupon
(per
envelope)

$35.50

$4.00

N.A.

$1.00

$23.50

charges will be adjusted in the near
future to reflect upcoming econo

Availability and fee schedules for

San Francisco
(415) 974-2453
Bruce H. Thompson
Los Angeles
(213)683-8375
Portland

ber 1, 1983. The new deposit prices
are expected to remain in effect
through the end of 1984. Consoli
dated shipment transportation sur

Value

Susan Robertson at

(503) 221-5909; Salt Lake City —
Rod Burrell at (801) 322-7927;
Seattle — Bill Ferensen at (206)
422-2754.

(continued on page 3)

REGULATIONS AND OPERATIONS UPDATE

Reserve Board has announced two changes under

The official notice is available from our Corporate Ser
vices Department at (415) 974-7252. For further informa

Regulation D. The first is an increase in the amount of net

tion, please contact Wayne Rickards at (415) 974-2242.

transaction accounts to which the lowest (3 percent)

Regulation O — Loans to Executive Officers: The
Board approved changes in Regulation O to make it con
form to the Garn-St Germain Depository Institutions Act
of 1982. This Act deleted certain reporting and disclosure
requirements with respect to loans to executive officers,
principal shareholders and their related interests, and
gave federal bank regulators authority to issue rules con
cerning reporting and disclosure of such loans by a
federally insured bank or by any of an insured bank's
correspondent banks.

Regulation D — Reserve Requirements: The Federal

reserve requirement will apply in 1984 — from $26.3
million to $28.9 million. The Board also increased the

amount of reservable liabilities in depository institutions
that are subject to a zero percentage reserve requirement
from $2.1 million to $2.2 million. The adjustments took
effect for all depository institutions with the reserve main
tenance period beginning January 12,1984.

The second change modified reserve requirements on
non-personal time deposits and became effective Octo
ber 6, 1983. Under the amendment, only non-personal
time deposits with original maturities of 11/2 years or less

are subject to reserve requirements. Of course, for those
member banks using the phase-in schedule in section
204.4(B) of Regulation D, other time deposit categories
still enter into the calculation of required reserves until the
phase-in period is completed on February 1,1984.

The Board's Regulation O amendments, effective De
cember 31, 1983, require state member banks to disclose
to the public, on request, the names of each executive
officer and principal shareholder who (together with their
related interests) had loans from the bank or its corres

For further information, please contact Ells Lund, Reports

pondent banks equal to a minimum of 5 percent of the
member bank's capital and surplus (or in any event equal
to $500,000). But no disclosure is required when the

Manager, at (415) 974-3149 or Doren Helterline,
Reserves Manager, at (415) 974-3151.

ceed 5 percent of the bank's capital and surplus.

Regulation K — International Banking Operations:
The Federal Reserve Board approved revisions of its
rules to add to the list of activities permissible for United

States banking organizations the operation of a travel
agency abroad. The Board also approved amendments to
its Rules Regarding Delegation of Authority to expedite
procedures for investment in an export trading company,
by delegating to the Reserve Banks authority to process
certain notifications filed by bank holding companies to
invest in the shares of export trading companies. These
actions became effective December 20,1983.

Copies of the Board's announcement are available from
Corporate Services at (415) 974-2752. For further infor
mation, please contact Rodney Reid at (415) 974-2266
Regulation L — Management Official Interlocks:
Amendments to the Board's Regulation L approved in
August by federal regulators of depository institutions
took effect November 30,1983. They simplify procedures
for obtaining exceptions and extensions of time under the
Depository Institutions Management Interlocks Act, ease
the burden of the Act on depository institution holding
companies, broaden exclusions from the prohibitions of
the Act for certain management officials, broaden circum
stances under which exemptions are available due to
disruptive management loss, clarify circumstances re
quiring termination of non-grandfathered interlocks, and
provide rules terminating interlocks between depository
institutions and non-depository organizations that be
come diversified savings and loan holding companies.

loans total less than $2,500, even if this sum would ex

For further information, please contact Wayne Rickards
at (415) 974-2242 or Merle Borchert at (415) 974-2238.
Regulation Q — Interest on Deposits: The Board has
revised Regulation Q to make it conform to recent actions
of the Depository Institutions Deregulation Committee.
The modifications effective January 1, 1984 involve (1)
the removal of the "thrift" differential on passbook sav

ings accounts and 7- to 31-day deposits under $2,500,
making the ceiling for all such accounts 51/2 percent at
both thrifts and commercial banks, and (2) the removal of
the $2,500 minimum denomination on money market

deposit accounts, Super NOW accounts, and 7- to 31-day
accounts when any of these accounts is held by an IRA or

Keogh depositor. The revision also phases out the $2,500
minimums for other depositors in two steps: Effective
January 1, 1985, the minimum will be reduced to $1,000;
there will be no minimum as of January 1,1986.

For further information, please contact Bill Cooper at
(415) 974-2254 or Bob Mulford at (415) 974-2256.

Regulation T — Credit by Brokers and Dealers: The
Board has deferred the effective date for complying with

the revised Regulation T from November 21, 1983 to
March 31, 1984. The new regulation governing credit
extended by brokers and dealers was adopted by the
Board on May 16,1983.

Copies of the Board's notice are available from our
Corporate Services Department at (415) 974-2752. For
further information on Regulation T, please contact David
Vandre at (415) 974-2965.

PROPOSED CHANGES IN FED'S
PRIVATE ADJUSTMENT FACTOR

CHECK COLLECTION FEES
(continued from page 1)

The Federal Reserve Board is con

taxes that would have been paid

sidering comment on proposed
revisions to its procedure for calcu
lating the Private Sector Adjustment

on the purchases of certain goods

The new service schedule incorpor
ates the following changes for the

and services if the Reserve Banks

San Francisco District:

Factor (PSAF). As provided in the
Monetary Control Act of 1980, the
PSAF is an allowance for the taxes

that would have been paid and a
return on capital had the Federal
Reserve's priced services been
furnished by a private sector firm.

were subject to such taxes.
•• Recovery of expenses incurred
by Board staff working directly on
the development of priced ser
vices, and inclusion of the Board's

assets employed in this specific
activity in the PSAF asset base.

The Board also is considering public

The proposed revisions include:

comment on an alternative method

• Use of data directly linking single-

of determining the income rate used
in calculating the PSAF. Public
comment was due by December 20,

purpose assets to Federal Re
serve services.

• Expansion of the sample used to
calculate the PSAF from 12 to the

25 largest bank holding companies.
• Removal of the financing costs of
net adjustment float from the
asset base.

• Recovery of the estimated sales

1983.

• The fine sort deposit deadline for
Nevada and Hawaii items has
been extended until 5:00 a.m. for

immediate availability.

• A new deferred availability Coun
try Zone has been established for
routing that involves Guam, and
American Samoa. Effective De

cember 1, these items were no

longer accepted in RCPC deposits
but must be deposited in separate
cash letters at 12:01 a.m. with

availability deferred one day.

For further information, please
contact Maureen Shields at (415)
974-2434. Copies of the Board's

• A cash letter surcharge of $1.00
will apply to all local deposits. Wi

announcement are available from

our Corporate Services Depart

ment, (415) 974-2752. ijji

Regulation X — Rules Governing Borrowers Who
Obtain Securities Credit: The Federal Reserve has

completely revised Regulation X, which applies to
borrowers who obtain credit for purchasing or carrying
securities (margin credit). The revision was part of the
Board's Regulatory Improvement Project, with major
substantive changes involving: the exclusion of purely
domestic borrowings which are already regulated by
margin rules applicable to lenders, an increase in the
exemption for margin credit obtained by U.S. persons
residing abroad from $5,000 to $100,000, a number of
technical revisions, and the elimination of the require
ment for borrowers to file form X-1.

For further information, please contact David Vandre at
(415)974-2965.

Regulation Y — Bank Holding Companies and
Change in Bank Control: The Federal Reserve has
completely revised its Regulation Y following review of
some 800 letters of comment received following publica
tion in May 1983 of the proposed overhaul. The revision
included a liberalization of procedures that should reduce
by a third the time now required for handling applications,
and an expanded definition of a bank. The procedural
changes are effective for applications filed on or after
January 1,1984. Other changes are effective February 6,
1984.

Copies of the Board's notice — all 240 pages — are
available from our Corporate Services Department at
(415) 974-2752. For further information, please contact
Harry Green at (415) 974-2235.

FOR PUBLIC COMMENT

Regulation Y — Bank Holding Company Regulation:
The Board has requested comment by January 24, 1984
on a proposed amendment to Regulation Y to eliminate
the requirement that bank holding companies engaging in
credit life, accident and health insurance underwriting
must provide specific rate reductions or increased policy
benefits.

The Board's notice is available from our Corporate Ser
vices Department at (415) 974-2752. For further informa
tion, please contact Robert Johnston at (415) 974-2352.

Regulation Z — Truth in Lending: The Federal Reserve
Board has published a proposed update to the official
staff commentary on Regulation Z and requested com
ment by January 31,1984. Three principal subjects of the
proposed revision involve (1) fees imposed on card
holders that use electronic terminals in interchange or
shared systems; (2) FHA mortgage insurance premiums
and the like when paid at or before settlement in a lump
sum by the non-creditor seller; and (3) disclosures for
discounted variable-rate transactions.

For further information, please contact David Vandre at
(415) 974-2965. Copies of the proposals are available
from our Corporate Services Department at (415) 974-2752.
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FED CLARIFIES
BANKERS' ACCEPTANCES

NO CHANGE IN
CAPITAL GUIDELINES
FOR MULTINATIONALS

The Federal

After considering public comments

and experience with the current
capital adequacy guidelines, the
Federal Reserve Board has decided

against any narrowing of the current
minimum 5 percent capital ratio for
multinational organizations.
Multinational banking organizations
have substantially increased their
capital ratios since the implementa
tion of the capital guidelines pro

gram in 1981. The Board reaffirmed
its amendments adopted in June
1983 to the capital adequacy

guide

lines,

amendments

noting

that

established

those
the

current 5 percent ratio and expan
ded the definition of secondary

capital to include unsecured longterm debt issued by a bank holding
company or a nonbank affiliate of
the holding company.

Reserve Board

has

clarified the meaning of participants
in bankers' acceptances for the pur
poses of the bankers' acceptance
limitations in the Bank Export Ser
vices Act (BESA). The Board's final
action takes effect June 10,1984.

BESA provided in part that if any
portion of an "eligible" bankers'
acceptance created by a member
bank or by a U.S. branch or agency
of a foreign bank covered by BESA
were conveyed through a participa
tion agreement to another bank
covered by BESA, that portion
should not be included in calculating
the creating bank's bankers' accep
tance limits. Instead, this portion is
to be applied to the limits applicable
to the "covered" bank receiving the

1984
HOLIDAY SCHEDULE
Federal Reserve Bank
of San Francisco

January 2
February 20
May 28
July 4

New Year's Day
President's Day
Memorial Day
Independence
Day
September 3 Labor Day
November 22 Thanksgiving
Day
December 25 Christmas Day
State holiday closings
are as follows:

April 20

San Francisco and
Los Angeles close
at noon

September 10 San Francisco,
Los Angeles

participation.

October 8

Salt Lake City
Seattle

In reaffirming its guidelines, the

A copy of the Board's notice is avail
able from our Corporate Services
Department at (415) 974-2752. For

November 6

Board reiterated that for bank hold

further information, please contact

ing company organizations with
total assets exceeding $150 million,
the capital guidelines apply both to

Rodney Reid at (415) 974-2266.^j|

individual banks in the holding com

pany as well as to the bank holding
company on a consolidated basis.
For

further

information,

please

contact Harry Green in Bank Hold
ing Company and International

Regulations at(415) 974-2235.ijflfi

November 12 Portland,

Salt Lake City,
Seattle