Federal Register / Vol. 83, No. 119 / Wednesday, June 20, 2018 / Rules and Regulations 28527 

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

6 44 U.S.C. 3506; see 5 CFR part 1320 Appendix 

A.1. 

7The primary, secondary, and seasonal credit 

rates described in this section apply to both 

advances and discounts made under the primary, 

secondary, and seasonal credit programs, 

respectively. 

1 12 U.S.C. 461(b). 

2 12 CFR 204.5(a)(1). 

3 12 U.S.C. 461(b)(1)(A) & (b)(12)(A). 

4See 12 U.S.C. 461(b)(1)(A) & (b)(12)(C); see also 

12 CFR 204.2(y). 

5See 12 U.S.C. 461(b)(12)(B). 

6See 12 CFR 204.10(b)(5). 

charged on primary credit and 

secondary credit would permit insured 

depository institutions to profit 

improperly from the difference in the 

current rate and the announced 

increased rate. Finally, because delay 

would undermine the Board’s action in 

responding to economic data and 

conditions, the Board has determined 

that ‘‘good cause’’ exists within the 

meaning of the APA to dispense with 

the notice, public comment, and 

delayed effective date procedures of the 

APA with respect to the final 

amendments to Regulation A. 

Regulatory Flexibility Analysis 

The Regulatory Flexibility Act 

(‘‘RFA’’) does not apply to a rulemaking 

where a general notice of proposed 

rulemaking is not required.5 As noted 

previously, a general notice of proposed 

rulemaking is not required if the final 

rule involves a matter relating to loans. 

Furthermore, the Board has determined 

that it is unnecessary and contrary to 

the public interest 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 (‘‘PRA’’) of 1995,6 the 

Board reviewed the final rule under the 

authority delegated to the Board by the 

Office of Management and Budget. The 

final rule contains no requirements 

subject to the PRA. 

List of Subjects in 12 CFR Part 201 

Banks, Banking, Federal Reserve 

System, Reporting and recordkeeping. 

Authority and Issuance 

For the reasons set forth in the 

preamble, the Board is amending 12 

CFR part 201 to read as follows: 

PART 201—EXTENSIONS OF CREDIT 

BY FEDERAL RESERVE BANKS 

(REGULATION A) 

■ 1. The authority citation for part 201 

continues to read as follows: 

Authority: 12 U.S.C. 248(i)–(j) and (s), 343 

et seq., 347a, 347b, 347c, 348 et seq., 357, 

374, 374a, and 461. 

■ 2. In § 201.51, paragraphs (a) and (b) 

are revised to read as follows: 

§ 201.51 Interest rates applicable to credit 

extended by a Federal Reserve Bank.7

(a) Primary credit. The interest rate at 

each Federal Reserve Bank for primary 

credit provided to depository 

institutions under § 201.4(a) is 2.50 

percent. 

(b) Secondary credit. The interest rate 

at each Federal Reserve Bank for 

secondary credit provided to depository 

institutions under § 201.4(b) is 3.00 

percent. 

* * * * * 

By order of the Board of Governors of the 

Federal Reserve System, June 15, 2018. 

Ann Misback, 

Secretary of the Board. 

[FR Doc. 2018–13270 Filed 6–19–18; 8:45 am] 

BILLING CODE P 

FEDERAL RESERVE SYSTEM 

12 CFR Part 204 

[Docket No. R–1610] 

RIN 7100–AF08 

Regulation D: Reserve Requirements 

of Depository Institutions 

AGENCY: Board of Governors of the 

Federal Reserve System. 

ACTION: Final rule. 

SUMMARY: The Board of Governors of the 

Federal Reserve System (‘‘Board’’) is 

amending Regulation D (Reserve 

Requirements of Depository Institutions) 

to revise the rate of interest paid on 

balances maintained to satisfy reserve 

balance requirements (‘‘IORR’’) and the 

rate of interest paid on excess balances 

(‘‘IOER’’) maintained at Federal Reserve 

Banks by or on behalf of eligible 

institutions. The final amendments 

specify that IORR is 1.95 percent and 

IOER is 1.95 percent, a 0.20 percentage 

point increase from their prior levels. 

The amendments are intended to 

enhance the role of such rates of interest 

in moving the Federal funds rate into 

the target range established by the 

Federal Open Market Committee 

(‘‘FOMC’’ or ‘‘Committee’’). 

DATES: 

Effective date: The amendments to 

part 204 (Regulation D) are effective 

June 20, 2018. 

Applicability date: The IORR and 

IOER rate changes were applicable on 

June 14, 2018. 

FOR FURTHER INFORMATION CONTACT: 

Sophia Allison, Special Counsel (202– 

452–3565), or Clinton Chen, Senior 

Attorney (202–452–3952), Legal 

Division, or Thomas Keating, Financial 

Analyst (202–973–7401), or Heather 

Wiggins, Section Chief (202–452–3674), 

Division of Monetary Affairs; for the 

hearing impaired, Telecommunications 

Device for the Deaf (TDD) 202–263– 

4869; Board of Governors of the Federal 

Reserve System, 20th and C Streets NW, 

Washington, DC 20551. 

SUPPLEMENTARY INFORMATION: 

I. Statutory and Regulatory Background 

For monetary policy purposes, section 

19 of the Federal Reserve Act (‘‘the 

Act’’) imposes reserve requirements on 

certain types of deposits and other 

liabilities of depository institutions.1

Regulation D, which implements section 

19 of the Act, requires that a depository 

institution meet reserve requirements by 

holding cash in its vault, or if vault cash 

is insufficient, by maintaining a balance 

in an account at a Federal Reserve Bank 

(‘‘Reserve Bank’’).2 Section 19 also 

provides that balances maintained by or 

on behalf of certain institutions in an 

account at a Reserve Bank may receive 

earnings to be paid by the Reserve Bank 

at least once each quarter, at a rate or 

rates not to exceed the general level of 

short-term interest rates.3 Institutions 

that are eligible to receive earnings on 

their balances held at Reserve Banks 

(‘‘eligible institutions’’) include 

depository institutions and certain other 

institutions.4 Section 19 also provides 

that the Board may prescribe regulations 

concerning the payment of earnings on 

balances at a Reserve Bank.5 Prior to 

these amendments, Regulation D 

specified a rate of 1.75 percent for both 

IORR and IOER.6

II. Amendments to IORR and IOER 

The Board is amending § 204.10(b)(5) 

of Regulation D to specify that IORR is 

1.95 percent and IOER is 1.95 percent. 

This 0.20 percentage point increase in 

the IORR and IOER was associated with 

an increase in the target range for the 

federal funds rate, from a target range of 

11⁄2 to 13⁄4 percent to a target range of 

13⁄4 to 2 percent, announced by the 

FOMC on June 13, 2018, with an 

effective date of June 14, 2018. The 

FOMC’s press release on the same day 

as the announcement noted that: 

Information received since the Federal 

Open Market Committee met in May 


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28528 Federal Register / Vol. 83, No. 119 / Wednesday, June 20, 2018 / Rules and Regulations 

7 5 U.S.C. 551 et seq. 

8 5 U.S.C. 553(b)(3)(A). 

9 5 U.S.C. 553(d). 

10 5 U.S.C. 603 and 604. 11 44 U.S.C. 3506; see 5 CFR part 1320 Appendix 

A.1. 

indicates that the labor market has continued 

to strengthen and that economic activity has 

been rising at a solid rate. Job gains have 

been strong, on average, in recent months, 

and the unemployment rate has declined. 

Recent data suggest that growth of household 

spending has picked up, while business fixed 

investment has continued to grow strongly. 

On a 12-month basis, both overall inflation 

and inflation for items other than food and 

energy have moved close to 2 percent. 

Indicators of longer-term inflation 

expectations are little changed, on balance. 

Consistent with its statutory mandate, the 

Committee seeks to foster maximum 

employment and price stability. The 

Committee expects that further gradual 

increases in the target range for the federal 

funds rate will be consistent with sustained 

expansion of economic activity, strong labor 

market conditions, and inflation near the 

Committee’s symmetric 2 percent objective 

over the medium term. Risks to the economic 

outlook appear roughly balanced. 

In view of realized and expected labor 

market conditions and inflation, the 

Committee decided to raise the target range 

for the federal funds rate to 13⁄4 to 2 percent. 

The stance of monetary policy remains 

accommodative, thereby supporting strong 

labor market conditions and a sustained 

return to 2 percent inflation. 

A Federal Reserve Implementation note 

released simultaneously with the 

announcement stated that: 

The Board of Governors of the Federal 

Reserve System voted unanimously to raise 

the interest rate paid on required and excess 

reserve balances to 1.95 percent, effective 

June 14, 2018. Setting the interest rate paid 

on required and excess reserve balances 5 

basis points below the top of the target range 

for the federal funds rate is intended to foster 

trading in the federal funds market at rates 

well within the FOMC’s target range. 

As a result, the Board is amending 

§ 204.10(b)(5) of Regulation D to change 

IORR to 1.95 percent and IOER to 1.95 

percent. 

III. Administrative Procedure Act 

In general, the Administrative 

Procedure Act (‘‘APA’’) 7 imposes three 

principal requirements when an agency 

promulgates legislative rules (rules 

made pursuant to congressionally 

delegated authority): (1) Publication 

with adequate notice of a proposed rule; 

(2) followed by a meaningful 

opportunity for the public to comment 

on the rule’s content; and (3) 

publication of the final rule not less 

than 30 days before its effective date. 

The APA provides that notice and 

comment procedures do not apply if the 

agency for good cause finds them to be 

‘‘unnecessary, impracticable, or contrary 

to the public interest.’’ 8 Section 553(d) 

of the APA also provides that 

publication at least 30 days prior to a 

rule’s effective date is not required for 

(1) a substantive rule which grants or 

recognizes an exemption or relieves a 

restriction; (2) interpretive rules and 

statements of policy; or (3) a rule for 

which the agency finds good cause for 

shortened notice and publishes its 

reasoning with the rule.9

The Board has determined that good 

cause exists for finding that the notice, 

public comment, and delayed effective 

date provisions of the APA are 

unnecessary, impracticable, or contrary 

to the public interest with respect to 

these final amendments to Regulation D. 

The rate increases for IORR and IOER 

that are reflected in the final 

amendments to Regulation D were made 

with a view towards accommodating 

commerce and business and with regard 

to their bearing upon the general credit 

situation of the country. Notice and 

public comment would prevent the 

Board’s action from being effective as 

promptly as necessary in the public 

interest and would not otherwise serve 

any useful purpose. Notice, public 

comment, and a delayed effective date 

would create uncertainty about the 

finality and effectiveness of the Board’s 

action and undermine the effectiveness 

of that action. Accordingly, the Board 

has determined that good cause exists to 

dispense with the notice, public 

comment, and delayed effective date 

procedures of the APA with respect to 

these final amendments to Regulation D. 

IV. Regulatory Flexibility Analysis 

The Regulatory Flexibility Act 

(‘‘RFA’’) does not apply to a rulemaking 

where a general notice of proposed 

rulemaking is not required.10 As noted 

previously, the Board has determined 

that it is unnecessary and contrary to 

the public interest 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. 

V. Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act (‘‘PRA’’) of 1995,11 the 

Board reviewed the final rule under the 

authority delegated to the Board by the 

Office of Management and Budget. The 

final rule contains no requirements 

subject to the PRA. 

List of Subjects in 12 CFR Part 204 

Banks, Banking, Reporting and 

recordkeeping requirements. 

For the reasons set forth in the 

preamble, the Board amends 12 CFR 

part 204 as follows: 

PART 204—RESERVE 

REQUIREMENTS OF DEPOSITORY 

INSTITUTIONS (REGULATION D) 

■ 1. The authority citation for part 204 

continues to read as follows: 

Authority: 12 U.S.C. 248(a), 248(c), 371a, 

461, 601, 611, and 3105. 

■ 2. Section 204.10 is amended by 

revising paragraph (b)(5) to read as 

follows: 

§ 204.10 Payment of interest on balances. 

* * * * * 

(b) * * * 

(5) The rates for IORR and IOER are: 

Rate 

(percent) 

IORR ......................................... 1.95 

IOER ......................................... 1.95 

* * * * * 

By order of the Board of Governors of the 

Federal Reserve System, June 15, 2018. 

Ann Misback, 

Secretary of the Board. 

[FR Doc. 2018–13267 Filed 6–19–18; 8:45 am] 

BILLING CODE 6210–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Parts 11, 404, 405, 420, 431, 

435, 437, 460 

[Docket No.: FAA–2016–6761; Amdt. Nos. 

11–62, 404–6, 405–6, 420–8, 431–6, 435–4, 

437–2, 460–2] 

RIN 2120–AK76 

Updates to Rulemaking and Waiver 

Procedures and Expansion of the 

Equivalent Level of Safety Option 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule. 

SUMMARY: This action streamlines and 

improves commercial space 

transportation regulations’ general 

rulemaking and petition procedures to 

better reflect current practice; 

reorganizes the regulations for clarity 

and flow; and allows petitioners to file 

their petitions to the FAA’s Office of 

Commercial Space Transportation 

electronically. Further, it expands the 

option to satisfy commercial space 

transportation requirements by 

demonstrating an equivalent level of 


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