FEDERAL RESERVE SYSTEM 12 CFR Part 217 Regulation Q Docket
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Observations on Regulation D and the Use of Reserve Requirements
United States Government Accountability Office Report to Congressional Requesters October 2016 FEDERAL RESERVE Observations on Regulation D and the Use of Reserve Requirements GAO-17-117 October 2016 FEDERAL RESERVE Observations on Regulation D and the Use of Reserve Requirements Highlights of GAO-17-117, a report to congressional requesters Why GAO Did This Study What GAO Found Section 19 of the Federal Reserve Act The methods by which depository institutions can implement Regulation D requires depository institutions to (Reserve Requirements of Depository Institutions) include maintaining reserves maintain reserves against a portion of against transaction accounts and enforcing a numeric transfer and withdrawal their transaction accounts solely for the (transaction) limit for savings deposits if they wish to avoid classifying those implementation of monetary policy. accounts as reservable transaction accounts. GAO estimates that 70–78 percent Regulation D implements section 19, of depository institutions limit savings deposit transactions. Other methods and it also requires institutions to limit include automatically transferring balances from transaction (e.g., checking) certain kinds of transfers and accounts to savings deposits in order to reduce reserve requirements. Institutions withdrawals from savings deposits to may choose to maintain transaction account reserves against savings deposits to not more than six per month or eliminate the need to enforce the transaction limit. But some institutions GAO statement cycle if they wish to avoid having to maintain reserves against surveyed indicated that they had operational burdens associated with monitoring these accounts. The transaction limit and enforcing the transaction limit (for example, 63–73 percent cited challenges, allows the Federal Reserve to such as creating forms and converting and closing accounts). -
Understanding the Effects of the Repeal of Regulation Q on Financial Institutions and Small Businesses
UNDERSTANDING THE EFFECTS OF THE REPEAL OF REGULATION Q ON FINANCIAL INSTITUTIONS AND SMALL BUSINESSES HEARING BEFORE THE SUBCOMMITTEE ON FINANCIAL INSTITUTIONS AND CONSUMER CREDIT OF THE COMMITTEE ON FINANCIAL SERVICES U.S. HOUSE OF REPRESENTATIVES ONE HUNDRED TWELFTH CONGRESS SECOND SESSION MARCH 1, 2012 Printed for the use of the Committee on Financial Services Serial No. 112–104 ( U.S. GOVERNMENT PRINTING OFFICE 75–076 PDF WASHINGTON : 2012 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 VerDate Nov 24 2008 18:21 Aug 03, 2012 Jkt 075076 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 K:\DOCS\75076.TXT TERRIE HOUSE COMMITTEE ON FINANCIAL SERVICES SPENCER BACHUS, Alabama, Chairman JEB HENSARLING, Texas, Vice Chairman BARNEY FRANK, Massachusetts, Ranking PETER T. KING, New York Member EDWARD R. ROYCE, California MAXINE WATERS, California FRANK D. LUCAS, Oklahoma CAROLYN B. MALONEY, New York RON PAUL, Texas LUIS V. GUTIERREZ, Illinois DONALD A. MANZULLO, Illinois NYDIA M. VELA´ ZQUEZ, New York WALTER B. JONES, North Carolina MELVIN L. WATT, North Carolina JUDY BIGGERT, Illinois GARY L. ACKERMAN, New York GARY G. MILLER, California BRAD SHERMAN, California SHELLEY MOORE CAPITO, West Virginia GREGORY W. MEEKS, New York SCOTT GARRETT, New Jersey MICHAEL E. CAPUANO, Massachusetts RANDY NEUGEBAUER, Texas RUBE´ N HINOJOSA, Texas PATRICK T. MCHENRY, North Carolina WM. LACY CLAY, Missouri JOHN CAMPBELL, California CAROLYN MCCARTHY, New York MICHELE BACHMANN, Minnesota JOE BACA, California THADDEUS G. -
ATA TIME When Market Interest Rates Have Soared These Ceilings Were Adopted January 21, 1970
The Administration of Regulation Q * by CHARLOTTE E. RUEBLING ATA TIME when market interest rates have soared These ceilings were adopted January 21, 1970. Dur- to levels never before reached in this country, rates ing 1969 the ceilings were lower, \vith yields on small on deposits at banks and other financial institutions time deposits limited to 5 per cent or less, a rate which have been held much lower, The rate commercial didnot compensate savers for the 6 per cent decline in banks charge on prime business loans has been 8½ the purchasing po\ver of their funds. per cent since early last June. Mortgage and many Interest rate ceilings on deposits at banks which other market interest rates are currently about as high. are members of the Federal Reserve System are es- On the other hand, payment of interest is pro- tablished under Federal Reserve Regulation Q. Ceil- hibited on demand deposits, and the maximum rates ings at insured nonmember banks, which have been permitted on time and savings deposits vary between 1 the same as for mernher banks, are set by a regula- 4.50 and 7.50 per cent. The highest rate applies only tion of the Federal Deposit Insurance Corporation.2 to deposits in denominations of $100,000 or more These Regulations stem from Banking Acts of 1933 maturing in a year or longer. Smaller time and sav- and 1935, respectively.3 Some states have at times im- ings deposits are permitted to yield 4.50 to 5.75 per posed ceilings for state-chartered banks which are cent (see table below). -
"A Legal History of Federal Regulation of Payments of Interest Or Deposits
A ci LEGAL HISTORY OF THE FEDERAL RESERVE SYSTEM General statement of purpose and plan, l»#«f to review discuss the la gal aspects of the origin and developiaent, both fimetloaallgr «ad atruetwatllyi of System including refMrtnofis to oourt of the AttoMt^y Q*n*raljt ^^^ regulatioaa^ rulings, intaiTpretatic^ia of tfet Boards with refer^nets to political and economic aspects limited to a minimum. A* Background diacmstioti of first and Bm®m& banks of th# United States> National Bank kct, and possibly ®m® reference to foreign central banks* General indication of defects of the banking system before the Federal Reserve Act, i.e.> ismiastle mtrrnmy} laote of r©s#rroir of r#0arw®t etc* B* Early Psroposals studies of National Monetary Cormnission and Pujo Coiroittee, with some discussion of pioposals of Aldbplohf Willis, Waxfeurg* C» I^gislati1^ Blstoxy Diaoission of wijor points of eontroirwsyj dtbatas C reports of c^i»dtt0#sf etc. D# fhm Origiiial Act Osi^ral amimary of pswisions B« Iiagal Basis —some disc- sslon of court decisions m to constitutionality of F©d@ral regal/itlon of banking # 11. A* Central Ctatlint itatt^iut of priBeipal changti in ttit Sjrstfn both functional and structural} shifts in eicphasis, etc* Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis 1# fhe Cwreiicy Funotion 1* Federal Reserve notes status (b) froosdwt for issuance (c) (k&lateral requirements shift 1» saphasls {#) Redemption (f) Interest *—hoif ttoiy have bt#n n»M in llea of fr&n&faise tsx 2t fisdersl Reserve Mmk not#§ (m) 1913 provisions (b) 1933 iwrgeney pi^viadons 3* Thomas Amendment -"•legal tender* etc* h* §oM Reserve let -*- effect on Federal Easerro Boak# and the Discounting Ftuaetion 1* Original eow^pt 2* Qeneral nmWm «-dncluding dlscsretlonarj natiare 3» Sllglbllltgr r#quir«itntt U« Bankers9 acetptmnets ««thelr purpose and. -
The Bank Holding Company Act of 1956
THE BANK HOLDING COMPANY ACT OF 1956 T HE Bank Holding Company Act of 1956,1 designed principally to regulate the expansion of bank holding companies and to insure the separation of banking and nonbanking enterprises,' is perhaps the most important banking legislation of the past two decades. The im- mediate economic consequences of the act are themselves deserving of comment, 3 but, even more significantly, the act represents the first comprehensive congressional action with regard to multiple banking through the use of the holding company. Though of comparatively recent origin,4 the bank holding company device has become as prom- inent as both the other forms of multiple banking, chains5 and branches,6 largely because of the economic inadequacies of the former 7 and the legal restrictions imposed upon the latter.8 A brief historical survey of bank holding company -development will serve to highlight an analysis of the act itself. Historically, the independent, unit bank, with its welfare dependent upon the economic health of the small area it serves, has too frequently been unable to withstand the adverse affect of even brief, localized eco- nomic depression2 Particularly in the small towns of the agrarian West and South during the i92O's and 193O's, bank suspensions occurred at an astonishing rate." Some form of multiple banking which could 70 STAT. 133, 12 U.S.C.A. §§ 1841-48 (Supp. 1956). sS. REP. No. 1095, 84 th Cong., ist Sess. 2 (.955). s See note 131 infra. 'The first independently capitalized bank holding company was the Marine Ban- corporation organized in Seattle, Washington in 1927. -
Blackrock, Inc
February 13, 2012 BY ELECTRONIC SUBMISSION Department of the Treasury Securities and Exchange Commission Office of Domestic Finance 100 F Street, N.E. 1500 Pennsylvania Avenue, N.W. Washington, D.C. 20549 Washington, D.C. 20520 Re: File Number S7-41-11 Board of Governors of the Federal Reserve System Office of the Comptroller of the Currency 20th Street and Constitution Avenue, N.W. 250 E Street, S.W. Washington, D.C. 20551 Washington, D.C. 20219 Re: Docket No. R-1432 and RIN 7100-AD82 Re: Docket ID OCC-2011-14 Federal Deposit Insurance Corporation Commodity Futures Trading Commission 550 17th Street, N.W. 1155 21st Street, N.W. Washington, D.C. 20429 Washington, D.C. 20581 Re: RIN 3064-AD85 Re: RIN 3038-AD05 RE: Notice of Proposed Rulemaking Prohibitions and Restrictions on Proprietary Trading and Certain Interests in, and Relationships with, Hedge Funds and Private Equity Funds Dear Sir or Madam: BlackRock, Inc. appreciates the opportunity to provide comments on the new Section 13 (the “Volcker Rule”) of the Bank Holding Company Act of 1956 (the “BHC Act”) to the regulatory agencies (the “Agencies”) charged with its implementation.1 BlackRock is an independently-managed public company (NYSE: BLK) that engages solely in providing asset management and risk management services to its clients. We manage over $3.5 trillion on behalf of institutional and individual clients worldwide through a variety of equity, fixed income, cash management, alternative investment, real estate and advisory products. Our client base includes corporate, public and multi-employer pension plans, insurance companies, mutual funds and exchange-traded funds, endowments, foundations, charities, corporations, government and other official institutions, banks and individuals around the world. -
National Federation of Independent Business, David S. Addington
~NFIB. 555 12th St. NW, Ste. 1001 Washington, D.C. 20004 Via www.regulations.gov, [email protected], [email protected], and via U.S. First Class Mail March 20, 2021 Hon. Janet L. Yellen Hon. Jerome H. Powell Hon. Jelena McWilliams Secretary of the Treasury Chairman Chairman, FDIC c/o Chief Counsel's Office c/o Ann E. Misback, Sec'y c/o James P. Sheesley OCC Comment Processing Board of Governors of the Asst. Executive Sec'y 400 7th St. SW, 3E-218 Federal Reserve System Attn: RIN 3064-AF73 Washington, DC 20219 20th & Constitution NW 550 17th St. NW Washington, DC 20551 Washington, DC 20429 Dear Madam Secretary, Mr. Chairman, and Madam Chairman: RE: Notice Titled "Amendment to the Capital Rule to Facilitate the Emergency Capital Investment Program," Dkt. ID OCC-2021-0002, Regulation Q/Dkt. No. R-1741/ RIN 7100-AG11, and RIN 3064-AF73, 86 Fed. Reg. 15076 (March 22, 2021) This letter presents comments of the National Federation of Independent Business (NFIB)1 on the Office of the Comptroller of the Currency of the U.S. Department of the Treasury (OCC), Board of Governors of the Federal Reserve System (Board), and Federal Deposit Insurance Corporation (FDIC) interim final rule titled "Amendment to the Capital Rule to Facilitate the Emergency Capital Investment Program" and published in the Federal Register of March 22, 2021 . The interim final rule implements a statutory authorization for an Emergency Capital Investment Program (ECIP) in which the Treasury invests in financial institutions in low-income or moderate-income communities.2 NFIB does not object to what OCC, the Board, and the FDIC did in the interim final rule; NFIB objects to how you did it. -
Bank Holding Company Supervision Manual
International Banking Activities Section 2100.0 2100.0.1 FOREIGN OPERATIONS OF banking and financing operations, some of U.S. BANKING ORGANIZATIONS which the parent banks themselves are not per- mitted to undertake under existing laws. These U.S. banking organizations may conduct a wide corporations may act as holding companies, pro- range of overseas activities. The Federal vide international banking services, and finance Reserve has broad discretionary powers to regu- industrial and financial projects abroad, among late the foreign activities of member banks and other activities. bank holding companies (BHCs) so that, in Sections 25 and 25A of the Federal Reserve financing U.S. trade and investments abroad, Act grant Edge Act and agreement corporations these U.S. banking organizations can be com- authority to engage in international banking and petitive with institutions of the host country foreign financial transactions. The Board’s without compromising the safety and soundness Regulation K (12 CFR 211.6) also outlines the of their U.S. operations. permissible activities of Edge and agreement Some of the Federal Reserve’s responsibili- corporations in the United States. Among other ties over the international operations of member activities, these corporations may (1) make for- banks (national and state member banks) and eign investments that are broader than those BHCs include permissible for member banks, and (2) conduct a deposit and loan business in states, including • authorizing the establishment of foreign those where the parent of the Edge or agreement branches of national banks and state member corporation does not conduct such banking banks and regulating the scope of their activi- activities, provided that the business is strictly ties; related to international or foreign business. -
Revisiting the History of Bank Holding Company Regulation in the United States
2011-2012 THAT WHICH WE CALL A BANK 113 THAT WHICH WE CALL A BANK: REVISITING THE HISTORY OF BANK HOLDING COMPANY REGULATION IN THE UNITED STATES SAULE T. OMAROVA* ** MARGARET E. TAHYAR Introduction ....................................................................... 114 I. Background: Bank Holding Company Regulation in the United States ...................................................................... 117 A. The BHCA Statutory Scheme: Brief Overview ............ 118 B. The Shifting Policy Focus of the BHCA ....................... 120 II. Back to the Beginning: The Birth of the Statute ................ 129 III. Who Is In? The Evolution of the Statutory Definition of “Bank” ............................................................................... 138 A. The 1966 Amendments ................................................. 139 B. The 1970 Amendments ................................................. 142 C. The Competitive Equality Banking Act of 1987 ........... 153 IV. Who Is Out? Exemptions from the Definition of “Bank” under the BHCA ................................................................. 158 A. Industrial Loan Corporations ........................................ 158 B. Credit Card Banks ......................................................... 169 C. Limited Purpose Trust Companies ................................ 173 D. Credit Unions ................................................................ 174 E. Savings Associations ..................................................... 179 V. Looking Back, Thinking Forward: -
Regulating the Investment Banks and Gses After the Subprime Crisis
1 Regulating the Investment Banks and GSEs After the Subprime Crisis Dwight M. Jaffee Haas School of Business, University of California, Berkeley Email: [email protected] Date: October 23, 2008 1. Introduction This paper offers a framework and a specific proposal for the re-regulation of the US investment banks and the government sponsored enterprises (GSEs, that is, Fannie Mae and Freddie Mac) in the aftermath of the subprime mortgage crisis. The largest investment banks are now all operating within bank holding company structures, but the regulatory issues remain; indeed, the bank holding company structure makes it more important than ever to deal with the regulatory issues of the investment banks.1 It may seem optimistic to refer to the subprime crisis in the past tense, but I believe this will soon be true, and that Congress and the new Administration will give their highest priority to the re-regulation of the US financial system. US financial history is replete with examples of a dialectic in which financial sector innovations create financial crises and financial crises create new regulatory structures. In both directions, we find an admirable record of success. First, financial system regulation has invariably responded to crises created by new financial market innovations, and almost always with long-lasting benefits. The following are examples of the impressive track record of regulatory responses to past financial crises: • The National Bank Act of 1863 created federal chartering and regulation of commercial banks to control “wildcat banking.” This legislation also created the Treasury Department and the Office of the Comptroller of the Currency. -
Federal Reserve Bank of Richmond Annual Report
Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis C C r M ID A I D C C C D \ /C D A KHZ' r^C. D \i^LJ k A f~\k ir\ y i— I Nix i i\i^i i/viwi nl/ 59 th ANNUAL REPORT 1973 CONTENTS 4 RECENT TRENDS IN BANKING 31 HIGHLIGHTS 35 Summary of Operation 36 COMPARATIVE STATEMENT 36 Condition 37 Earnings and Expenses 38 DIRECTORS 39 OFFICERS 40 BRANCH DIRECTORS Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis TO OUR MEMBER BANKS: We are pleased to present the 1973 Annual Report of the Federal Reserve Bank of Richmond. The report’s feature article reviews recent trends in commercial banking-. The report also includes highlights of the year’s operations, comparative financial statements, and current lists of officers and directors of our Richmond, Baltimore, Charlotte, Columbia and Culpeper offices. On behalf of our directors and staff, we wish to thank you for the cooperation and support you have extended to us throughout the past year. Sincerely yours, Chairman of the Board President Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis REGENT TRENDS IN BANKING The history of banking in the United States has been one of almost constant change, from the days of “wildcat” banking in the early and mid-nineteenth century (when some state constitutions prohibited bank ing), through the establishment of the National Banking System during the Civil War, the financial panics of the late nineteenth and early twentieth centuries, the creation of the Federal Reserve System, and the collapse of the banking system in the 1930’s. -
Bank Regulatory Law Gramm-Leach-Bliley
LAW OFFICES OF BURTON L. RAIMI, P.A. 8499 South Tamiami Trail • Suite 266 • Sarasota, Florida 34238 • (941) 927-1603 • (941) 927-1703 (fax) Bank Regulatory Law Gramm-Leach-Bliley Act Making the New Rules Work for Your Bank Federal Law I. BANK HOLDING COMPANY - TRADITIONAL A. Statutes and regulations, that existed prior to G-L-B, continue to apply, and limit, the activities of a traditional bank holding company that has determined not to elect to be a financial holding company. B. A bank holding company, or a non-depository institution subsidiary, is allowed to sell insurance in a place of 5,000 people but only to those people located in that place. II. FINANCIAL HOLDING COMPANY — RELEVANT PROVISIONS OF G-L-B ACT A. Gramm-Leach-Bliley Act amended Section 4 of the Bank Holding Company Act by adding a new subsection (k) that provides: "a financial holding company may engage in any activity, and may acquire and retain the shares of any company engaged in any activity, that the Federal Reserve Board … determines … to be financial in nature or incidental to such financial activity; or is complementary to a financial activity and does not pose a substantial risk to the safety or soundness of the depository institutions or the financial system generally." B. Section 4(k)(3) provides the factors the FRB is to consider when determining whether an activity is financial in nature or incidental to a financial activity. C. Section 4(k)(4) lists activities that Congress deemed, as of the date of enactment of G-L-B Act, to be financial in nature.