Federal Register / Vol. 85, No. 238 / Thursday, December 10, 2020 / Rules and Regulations 79389 

1 12 U.S.C. 287. 

2 12 CFR 209.4(a). 

3 12 U.S.C. 287 and 12 CFR 209.4(c)(2). 

4 12 U.S.C. 289(a)(1). 

5 12 CFR 209.1(d)(3) (‘‘Total consolidated assets 

means the total assets on the stockholder’s balance 

sheet as reported by the stockholder on its 

Consolidated Report of Condition and Income (Call 

Report) as of the most recent December 31, except 

in the case of a new member or the surviving 

stockholder after a merger ‘total consolidated assets’ 

means (until the next December 31 Call Report 

becomes available) the total consolidated assets of 

the new member or the surviving stockholder at the 

time of its application for capital stock’’). 

6 12 CFR 209.4(e), (c)(1)(ii), and (d)(1)(ii); 

209.2(a); and 209.3(d)(3). 

7 12 CFR 209.4(f). 

8 81 FR 84415, 84417 (Nov. 23, 2016). 

9The BEA makes ongoing revisions to its 

estimates of the Gross Domestic Product Price Index 

for historical calendar quarters. The Board 

calculates annual adjustments from the baseline 

year (rather than from the prior-year total 

consolidated asset threshold) to ensure that the 

adjusted total consolidated asset threshold 

accurately reflects the cumulative change in the 

BEA’s most recent estimates of the Gross Domestic 

Product Price Index. 

10See 12 CFR 209.4(f) and n. 8 and accompanying 

text, supra. 

§ 1026.35(c)(2)(ii) if the creditor makes an 

extension of credit at consummation that is 

equal to or below the threshold amount in 

effect at the time of consummation. 

5. Qualifying for exemption—subsequent 

changes. A transaction does not meet the 

condition for an exemption under 

§ 1026.35(c)(2)(ii) merely because it is used to 

satisfy and replace an existing exempt loan, 

unless the amount of the new extension of 

credit is equal to or less than the applicable 

threshold amount. For example, assume a 

closed-end loan that qualified for a 

§ 1026.35(c)(2)(ii) exemption at 

consummation in year one is refinanced in 

year ten and that the new loan amount is 

greater than the threshold amount in effect in 

year ten. In these circumstances, the creditor 

must comply with all of the applicable 

requirements of § 1026.35(c) with respect to 

the year ten transaction if the original loan 

is satisfied and replaced by the new loan, 

unless another exemption from the 

requirements of § 1026.35(c) applies. See 

§ 1026.35(c)(2) and (c)(4)(vii). 

* * * * * 

Brian P. Brooks 

Acting Comptroller of the Currency. 

By order of the Board of Governors of the 

Federal Reserve System, acting through the 

Secretary of the Board under delegated 

authority. 

Ann Misback, 

Secretary of the Board. 

Laura Galban 

Federal Register Liaison, Bureau of Consumer 

Financial Protection. 

[FR Doc. 2020–25872 Filed 12–9–20; 8:45 am] 

BILLING CODE 6210–01–P 4810–33–P; 4810–AM–P 

FEDERAL RESERVE SYSTEM 

12 CFR Part 209 

[Regulation I; Docket No. R–1732] 

RIN 7100–AG 02 

Federal Reserve Bank Capital Stock 

AGENCY: Board of Governors of the 

Federal Reserve System. 

ACTION: Final rule. 

SUMMARY: The Board of Governors 

(Board) is publishing a final rule that 

applies an inflation adjustment to the 

threshold for total consolidated assets in 

Regulation I. Federal Reserve Bank 

(Reserve Bank) stockholders that have 

total consolidated assets above the 

threshold receive a different dividend 

rate on their Reserve Bank stock than 

stockholders with total consolidated 

assets at or below the threshold. The 

Federal Reserve Act requires that the 

Board annually adjust the total 

consolidated asset threshold to reflect 

the change in the Gross Domestic 

Product Price Index, published by the 

Bureau of Economic Analysis (BEA). 

Based on the change in the Gross 

Domestic Product Price Index as of 

September 30, 2020, the total 

consolidated asset threshold will be 

$10,785,000,000 through December 31, 

2021. 

DATES: This final rule is effective 

January 11, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Evan Winerman, Senior Counsel (202– 

872–7578), Legal Division; or Michael 

Long, Senior Financial Institutions 

Policy Analyst (202–452–2262), Reserve 

Bank Operations and Payments Systems 

Division. For users of 

Telecommunications Device for the Deaf 

(TDD) only, contact (202) 263–4869. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Regulation I governs the issuance and 

cancellation of capital stock by the 

Reserve Banks. Under section 5 of the 

Federal Reserve Act 1 and Regulation I,2

a member bank must subscribe to 

capital stock of the Reserve Bank of its 

district in an amount equal to six 

percent of the member bank’s capital 

and surplus. The member bank must 

pay for one-half of this subscription on 

the date that the Reserve Bank approves 

its application for capital stock, while 

the remaining half of the subscription 

shall be subject to call by the Board.3

Section 7(a)(1) of the Federal Reserve 

Act 4 provides that Reserve Bank 

stockholders with $10 billion or less in 

total consolidated assets shall receive a 

six percent dividend on paid-in capital 

stock, while stockholders with more 

than $10 billion in total consolidated 

assets shall receive a dividend on paidin capital stock equal to the lesser of six 

percent and ‘‘the rate equal to the high 

yield of the 10-year Treasury note 

auctioned at the last auction held prior 

to the payment of such dividend.’’ 

Section 7(a)(1) requires that the Board 

adjust the threshold for total 

consolidated assets annually to reflect 

the change in the Gross Domestic 

Product Price Index, published by the 

BEA. 

Regulation I implements section 

7(a)(1) of the Federal Reserve Act by (1) 

defining the term ‘‘total consolidated 

assets,’’ 5 (2) incorporating the statutory 

dividend rates for Reserve Bank 

stockholders 6 and (3) providing that the 

Board shall adjust the threshold for total 

consolidated assets annually to reflect 

the change in the Gross Domestic 

Product Price Index.7 The Board has 

explained that it ‘‘expects to make this 

adjustment [to the threshold for total 

consolidated assets] using the final 

second quarter estimate of the Gross 

Domestic Product Price Index for each 

year, published by the Bureau of 

Economic Analysis.’’ 8

II. Adjustment 

The Board annually adjusts the $10 

billion total consolidated asset 

threshold based on the change in the 

Gross Domestic Product Price Index 

between the second quarter of 2015 (the 

baseline year) and the second quarter of 

the current year.9 The second quarter 

2020 Gross Domestic Product Price 

Index estimate published by the BEA in 

September 2020 (112.860) is 7.85 

percent higher than the second quarter 

2015 Gross Domestic Product Price 

Index estimate published by the BEA in 

September 2020 (104.647). Based on this 

change in the Gross Domestic Product 

Price Index, the threshold for total 

consolidated assets in Regulation I will 

be $10,785,000,000 as of January 11, 

2021. 

III. Administrative Law Matters 

Administrative Procedure Act 

The provisions of 5 U.S.C. 553(b) 

relating to notice of proposed 

rulemaking have not been followed in 

connection with the adoption of these 

amendments. The amendments involve 

expected, ministerial adjustments that 

are required by statute and Regulation I 

and are consistent with a method 

previously set forth by the Board.10

Accordingly, the Board finds good cause 

for determining, and so determines, that 

notice in accordance with 5 U.S.C. 

553(b) is unnecessary. 


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79390 Federal Register / Vol. 85, No. 238 / Thursday, December 10, 2020 / Rules and Regulations 

11 5 U.S.C. 603 and 604. 

12 44 U.S.C. 3506; 5 CFR 1320. 

1Although consumer credit transactions above 

the threshold are generally exempt, loans secured 

by real property or by personal property used or 

expected to be used as the principal dwelling of a 

consumer and private education loans are covered 

by TILA regardless of the loan amount. See 12 CFR 

226.3(b)(1)(i) (Board) and 12 CFR 1026.3(b)(1)(i) 

(Bureau). 

2Public Law 111–203, section 1100E, 124 Stat. 

1376, 2111 (2010). 

3 76 FR 18349 (Apr. 4, 2011); 76 FR 18354 (Apr. 

4, 2011). 

4See 76 FR 78500 (Dec. 19, 2011); 81 FR 25323 

(Apr. 28, 2016). 

5Section 1029(a) of the Dodd-Frank Act states: 

‘‘Except as permitted in subsection (b), the Bureau 

may not exercise any rulemaking, supervisory, 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

does not apply to a rulemaking where a 

general notice of proposed rulemaking 

is not required.11 As noted previously, 

the Board has determined that it is 

unnecessary to publish a general notice 

of proposed rulemaking for this final 

rule. Accordingly, the RFA’s 

requirements relating to an initial and 

final regulatory flexibility analysis do 

not apply. 

Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act of 1995,12 the Board has 

reviewed this final rule. No collections 

of information pursuant to the 

Paperwork Reduction Act are contained 

in the final rule. 

List of Subjects in 12 CFR Part 209 

Banks and banking, Federal Reserve 

System, Reporting and recordkeeping 

requirements, Securities. 

Authority and Issuance 

For the reasons set forth in the 

preamble, the Board amends Regulation 

I, 12 CFR part 209, as follows: 

PART 209—ISSUE AND 

CANCELLATION OF FEDERAL 

RESERVE BANK CAPITAL STOCK 

(REGULATION I) 

■ 1. The authority citation for part 209 

continues to read as follows: 

Authority: 12 U.S.C. 222, 248, 282, 286– 

288, 289, 321, 323, 327–328, and 466. 

■ 2. In part 209, remove all references to 

‘‘$10,715,000,000’’ and add in their 

place ‘‘$10,785,000,000’’, wherever they 

appear. 

By order of the Board of Governors of the 

Federal Reserve System under delegated 

authority. 

Ann Misback, 

Secretary of the Board. 

[FR Doc. 2020–26199 Filed 12–9–20; 8:45 am] 

BILLING CODE P 

FEDERAL RESERVE SYSTEM 

12 CFR Part 213 

[Docket No. R–1727] 

RIN 7100–AF98 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Part 1013 

Consumer Leasing (Regulation M) 

AGENCY: Board of Governors of the 

Federal Reserve System (Board); and 

Bureau of Consumer Financial 

Protection (Bureau). 

ACTION: Final rules, official 

interpretations and commentary. 

SUMMARY: The Board and the Bureau are 

finalizing amendments to the official 

interpretations and commentary for the 

agencies’ regulations that implement the 

Consumer Leasing Act (CLA). The 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act (Dodd-Frank 

Act) amended the CLA by requiring that 

the dollar threshold for exempt 

consumer leases be adjusted annually 

by the annual percentage increase in the 

Consumer Price Index for Urban Wage 

Earners and Clerical Workers (CPI–W). 

If there is no annual percentage increase 

in the CPI–W, the Board and the Bureau 

will not adjust this exemption threshold 

from the prior year. However, in years 

following a year in which the exemption 

threshold was not adjusted, the 

threshold is calculated by applying the 

annual percentage change in the CPI–W 

to the dollar amount that would have 

resulted, after rounding, if the decreases 

and any subsequent increases in the 

CPI–W had been taken into account. 

Based on the annual percentage increase 

in the CPI–W as of June 1, 2020, the 

exemption threshold will remain at 

$58,300 effective January 1, 2021. 

Because the Dodd-Frank Act also 

requires similar adjustments in the 

Truth in Lending Act’s threshold for 

exempt consumer credit transactions, 

the Board and the Bureau are making 

similar amendments to each of their 

respective regulations implementing the 

Truth in Lending Act elsewhere in this 

issue of the Federal Register. 

DATES: This final rule is effective 

January 1, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Board: Vivian W. Wong, Senior 

Counsel, Division of Consumer and 

Community Affairs, Board of Governors 

of the Federal Reserve System, at (202) 

452–3667; for users of 

Telecommunications Device for the Deaf 

(TDD) only, contact (202) 263–4869. 

Bureau: Rachel Ross, AttorneyAdvisor, Office of Regulations, Bureau 

of Consumer Financial Protection, at 

(202) 435–7700. If you require this 

document in an alternative electronic 

format, please contact 

CFPB_Accessibility@cfpb.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Dodd-Frank Wall Street Reform 

and Consumer Protection Act of 2010 

(Dodd-Frank Act) increased the 

threshold in the Consumer Leasing Act 

(CLA) for exempt consumer leases, and 

the threshold in the Truth in Lending 

Act (TILA) for exempt consumer credit 

transactions,1 from $25,000 to $50,000, 

effective July 21, 2011.2 In addition, the 

Dodd-Frank Act requires that, on and 

after December 31, 2011, these 

thresholds be adjusted annually for 

inflation by the annual percentage 

increase in the Consumer Price Index 

for Urban Wage Earners and Clerical 

Workers (CPI–W), as published by the 

Bureau of Labor Statistics. In April 

2011, the Board issued a final rule 

amending Regulation M (which 

implements the CLA) consistent with 

these provisions of the Dodd-Frank Act, 

along with a similar final rule amending 

Regulation Z (which implements TILA) 

(collectively, the Board Final Threshold 

Rules).3

Title X of the Dodd-Frank Act 

transferred rulemaking authority for a 

number of consumer financial 

protection laws from the Board to the 

Bureau, effective July 21, 2011. In 

connection with this transfer of 

rulemaking authority, the Bureau issued 

its own Regulation M implementing the 

CLA, 12 CFR part 1013, substantially 

duplicating the Board’s Regulation M.4

Although the Bureau has the authority 

to issue rules to implement the CLA for 

most entities, the Board retains 

authority to issue rules under the CLA 

for certain motor vehicle dealers 

covered by section 1029(a) of the DoddFrank Act, and the Board’s Regulation 

M continues to apply to those entities.5


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