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Federal Reserve Bank of Dallas

October 1982

Advisory Committee Meets to Express Views
Deregulation of the industry and
s im p lific a tio n of re p o rtin g re­
quirements were major concerns ex­
pressed by the Advisory Committee of
Financial Institutions when it met at
the Dallas Fed September 9. The
17-member committee is composed of
representatives from commercial
banks, savings and loan associations,
and credit unions and provides a
liaison between the Board of Directors
of the Dallas Reserve Bank and the
financial institutions in the Eleventh
Federal Reserve District.
During the half-day committee
meeting, some members of the group
e xpressed
co nce rn
th a t the
deregulatory efforts of the Depository
Institutions Deregulation Committee
(DIDC) are not progressing as rapidly
as they had hoped. Money market
mutual funds and other high-yielding
alternatives place financial institu­
tions at a competitive disadvantage,
they said.
Other committee members stated
that regulatory reporting requirements
are an excessive burden on smaller in­
stitutions. They expressed the opinion
that as much unnecessary reporting as
possible should be eliminated and that
the remainder should be simplified.
Members of the committee stressed
that the relationship between the
Federal Reserve Bank of Dallas and
the financial institutions in the District
is generally excellent. Dallas Fed
President Robert H. Boykin agreed
with that sentiment and expressed his
satisfaction in being associated with

the financial institutions of the
Southwest. Moreover, Boykin con­
firmed to the committee that its views
would be conveyed to appropriate
regulatory and legislative authorities.
Advisory committee members began
their afternoon by attending a lun­
cheon with the Federal Reserve Bank
of Dallas Board of Directors. After­
ward, formal presentations on the
economy, financial services, and com­
munications were heard during a
meeting with Reserve Bank manage­
ment and members of the Board of
Directors. An open discussion fol­
lowed, where committee members ex­
pressed their opinions on matters of
mutual concern. The role of the Federal

Reserve in the financial services
market was also discussed.
The Advisory Committee of Finan­
cial Institutions was created last year
to establish a constructive dialogue
between the Dallas Fed and financial
institutions. The initial meeting of the
committee was held March 12, 1981.

• Call Reports
• Zinc Penny
• All Savers

New Safekeeping Services Announced
The Federal Reserve Bank of Dallas
announced that it has broadened its
securities safekeeping services to in­
clude three new categories of
definitive securities which can now be
held in vaults at the Fed. These new
categories of securities are equity
securities such as stocks and bonds,
certificates of deposit, and bankers’
acceptances. Securities owned by a
financial institution or owned by an in­
stitution’s customers are eligible for
this new service.
Institutions often use Federal
Reserve safekeeping services not only
as a security measure, but to have their
securities readily available for use as
collateral on discount window loans. A
variety of custody classes are offered
by the Dallas Fed to allow institutions
to categorize securities as they wish
and meet internal controls.

Better Information is Aim
Of Call Report Revisions
All federally-insured commercial
banks will begin reporting data on past
due and other nonperforming loans to
federal regulators at the end of this
year through the quarterly Reports of
Condition and Income, known as Call
Reports by the industry.
The Federal Financial Institutions
Examination Council (FFIEC), which is
composed of representatives from
several federal regulatory agencies,
recently announced that major revi­
sions to the Call Reports would be im­
plemented beginning March 31, 1984.
At the same time, however, the council
decided that certain key sections of
the revised reports require earlier im­
The FFIEC believes these sections
are pertinent to the immediate super­
visory needs of the agencies and that
the data is essential to the effective
monitoring and supervising of the na­
tion’s banking system.
Banks will begin reporting informa­

tion on past due, nonaccrual and
renegotiated loans and lease financing
receivables beginning w ith the
December 31,1982 reports. In addition,
this new information will be made
available to the public beginning with
the June 30, 1983 reports. Earlier im­
plementation of other sections of the
Call Reports will take place in 1983.
The FFIEC’s main objective in revis­
ing the Call Reports is to obtain addi­
tional information it needs to monitor
individual bank condition and perfor­
mance. The revisions include certain
additions to information required to be
reported as well as elimination of
some current requirements.
Call Reports involve separate repor­
ting forms and requirements for three
categories of banks: banks with
foreign offices, banks with domestic
offices only and assets of $100 million
or more, and banks with domestic of­
fices only and assets of less than $100

Reg Z Revised
The Official Staff Commentary
to Regulation Z was revised ef­
fective September 17, 1982 to pro­
vide more flexibility for institu­
tions governed by the regulation
while preserving the basic con­
sumer protection. The mandatory
compliance date for the revised
commentary, which applies and
interprets the truth in lending
regulation, will be April 1, 1983.
The issues dealt with in the
revised commentary include
variable-rate open-end credit,
finance charge rules, prepayment
disclosures, and mortgage finan­
cing plan disclosures.
October 1 marks the man­
datory compliance date for the
new Regulation Z, which had
been revised effective April 1,
1981 under the Truth in Lending
Simplification Act of 1980. In­
stitutions were given the choice
of compliance with either the old
or new regulation during the in­
terim before the mandatory Oc­
tober 1 date.

A Zinc Penny For Your Thoughts
Pennies. Somehow they collect in
pockets, drawers, and jars. They
multiply as mysteriously as coat
hangers left unguarded in the hall
As familiar as the penny is, it is
undergoing a change. At the beginning
of 1982, the Philadelphia mint began
producing pennies containing 97 per­
cent zinc and three percent copper,
and several Eastern Reserve Banks
began distribution. This is exactly the
reverse from the previous mix of 97 per­
cent copper and three percent zinc.
The copper-coated pennies look iden-

slig h t problem for the Federal
Reserve’s Cash Department. All coins
currently coming into the Fed are
verified by weight. According to
Charles Worley, manager of the Dallas
Fed’s Cash Department, “ We will have
to verify each bag by piece counting for
When the new pennies are distri­
buted through the Dallas Fed early in
1983, all bags of incoming pennies will
be individually counted for approx­
imately one year to compensate for the
mixture of copper and zinc pennies.
Why only one year? “ Pennies just dis-

more than their face value in copper.
Some pennies have increased in
value, however. Known as “ wheaties”
because they have two stalks of wheat
on the back, these pennies are now
worth two cents apiece. Their value in­
creased in 1959 when the Lincoln
Memorial replaced the wheat design
on the back of the penny.
The penny hasn’t always been the
lowest coin denomination. In 1793,
copper cents and half-cents about the
size of the present quarter and nickel
were minted in Philadelphia. The halfcent eventually became obsolete and

tical to the mostly-copper older pen­
nies. However, the new pennies cost
less to mint. It costs the government
six-tenths of a cent to produce a zinc
penny, compared to nine-tenths of a
cent to make a copper penny. With ap­
proximately 12 billion pennies minted
per year, that difference results in a
yearly savings of $36 million.
The new zinc pennies also weigh
less than the copper pennies—21 per­
cent less. This means a $50 bag of zinc
pennies will weigh 27 pounds instead
of the 34 pounds copper pennies
weigh. The weight difference poses a

appear,” says Worley. Whether people
hoard them, stash them in jars, or
throw them in fountains, pennies
simply do not circulate like other
coins. Every month, large quantities of
pennies are distributed to financial in­
stitutions. Of those sent out, less than
one percent are returned to the Fed as
Do pennies disappear because of
widespread hoarding? According to
Worley, this is sometimes the case.
However, even though people may
believe the copper pennies will become
more valuable, they will never be worth

the Indian head penny took over as the
lowest denomination coin. In 1909, the
profile of Abraham Lincoln was placed
on the front of the penny. All but one of
the currently minted coins honor past
U.S. presidents. The exception is the
small dollar coin introduced in 1979
which honors Susan B. Anthony,
famous advocate of women’s rights.
Even though pennies are often
looked upon as nuisances, they do
serve a useful function in society. After
all, what can substitute for a penny
when the bill at the gas station is

All Savers Certificate Facing Uncertain Future
Time is running short for the all
savers certificate. First offered in Oc­
tober 1981, the one-year instruments
are coming up for renewal this month
and, unless Congressional action is
taken, they will continue to be offered
only through December 31, 1982.
Over the past year, the tax-exempt
certificates have proven extremely ef­
fective in attracting billions of dollars
to financial institutions. Although the
growth was most spectacular the first
month they were introduced, when the
rate of interest paid was at its highest
level of 12.61 percent, funds have con­
tinued to flow into financial institu­
tions helping them compete in today’s
money market.
As the accompanying table shows,
total funds in all savers deposits grew
20 percent from December 1981 to
March 1982, with federally-insured
nonmember banks showing the largest
individual increase of 30 percent.


Amounts of All Savers
Deposits (Billions of Dollars)

Type of Institution

March 31, 1982

December 31, 1981

$ 1 1 .3

$ 9 .6

S ta te M e m b e r B anks

2 .7

2 .2

F e d e r a lly In s u re d N o n m e m b e r B a n k s

7 .0

5 .6

F e d e r a lly In s u re d M u tu a l S a v in g s B a n k s

5 .2

N a tio n a l B a n k s

F e d e r a lly In s u re d S a v in g s a n d L o a n s

2 0 .6
2 .3 '

F e d e r a lly In s u r e d C r e d it U n io n s

$ 4 9.1

4 .5
1 8 .3 2
2 .3
$ 4 2 .5

1. Amount outstanding as of December 31,1981. The NCUA collects this information only semiannually as of June 30
and December 31.
2. Savings and loan associations report by fiscal years. Approximately 15% do not report on December 31. Of those
reporting on December 31 the amount of all savers deposits was $15.6 billion. It was estimated that those not
reporting hold approximately $2.7 billion of such deposits.
Source: Federal Financial Institutions Examination Council.

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