83316 Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Rules and Regulations 

1The June 30th value for 2022 may differ from 

the value used in the previous year’s calculation 

because depository institutions may revise their 

deposit data to correct for inaccuracies. 

2Consistent with Board practice, the low reserve 

tranche and reserve requirement exemption 

amounts have been rounded to the nearest $0.1 

million. 

3The June 30th value for 2022 may differ from 

the value used in the previous year’s calculation 

because depository institutions may revise their 

deposit data to correct for inaccuracies. 

applies. See § 1026.35(c)(2) and 

(c)(4)(vii). 

* * * * * 

Michael J. Hsu, 

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. 

Michele Taylor Fennell, 

Deputy Associate Secretary of the Board. 

Brian Shearer, 

Senior Advisor, Consumer Financial 

Protection Bureau. 

[FR Doc. 2023–25047 Filed 11–28–23; 8:45 am] 

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

FEDERAL RESERVE SYSTEM 

12 CFR Part 204 

[Regulation D; Docket No. R–1823] 

RIN 7100–AG71 

Reserve Requirements of Depository 

Institutions 

AGENCY: Board of Governors of the 

Federal Reserve System. 

ACTION: Final rule. 

SUMMARY: The Board is amending 

Regulation D, Reserve Requirements of 

Depository Institutions, to reflect the 

annual indexing of the reserve 

requirement exemption amount and the 

low reserve tranche for 2024. The 

annual indexation of these amounts is 

required notwithstanding the Board’s 

action in March 2020 of setting all 

reserve requirement ratios to zero. The 

reserve requirement exemption amount 

for 2023 will remain $36.1 million, 

unchanged for 2024, consistent with the 

Federal Reserve Act (the ‘‘Act’’). The 

Board is amending Regulation D to set 

the amount of the low reserve tranche 

at $644.0 million (decreased from 

$691.7 million in 2023). The adjustment 

to the low reserve tranche is derived 

using a statutory formula specified in 

the Act. The annual indexation of the 

reserve requirement exemption amount 

and low reserve tranche is required by 

statute but will not affect depository 

institutions’ reserve requirements, 

which will remain zero. 

DATES: 

Effective date: December 29, 2023. 

Compliance date: The new low 

reserve tranche will apply beginning 

January 1, 2024. 

FOR FURTHER INFORMATION CONTACT: 

Benjamin Snodgrass, Senior Counsel 

(202/263–4877), Legal Division; Kristen 

Payne, Lead Financial Institution and 

Policy Analyst (202/452–2872), Division 

of Monetary Affairs; for users of TTY/ 

TRS, please call 711 from any 

telephone, anywhere in the United 

States, or (202) 263–4869; Board of 

Governors of the Federal Reserve 

System, 20th and C Streets NW, 

Washington, DC 20551. 

SUPPLEMENTARY INFORMATION: Section 

19(b)(2) of the Act (12 U.S.C. 461(b)(2)) 

requires each depository institution to 

maintain reserves against its transaction 

accounts and nonpersonal time 

deposits, as prescribed by Board 

regulations, for the purpose of 

implementing monetary policy. The 

Board’s actions with respect to this 

provision are discussed below. 

I. Reserve Requirements 

Section 19(b) of the Act authorizes 

different ranges of reserve requirement 

ratios depending on the amount of 

transaction account balances at a 

depository institution. Section 

19(b)(11)(A) of the Act (12 U.S.C. 

461(b)(11)(A)) provides that a zero 

percent reserve requirement ratio shall 

apply at each depository institution to 

total reservable liabilities that do not 

exceed a certain amount, known as the 

reserve requirement exemption amount. 

Section 19(b)(11)(B) provides that, 

before December 31 of each year, the 

Board shall issue a regulation adjusting 

the reserve requirement exemption 

amount for the next calendar year if 

total reservable liabilities held at all 

depository institutions increase from 

one year to the next. The Act requires 

the percentage increase in the reserve 

requirement exemption amount to be 80 

percent of the percentage increase in 

total reservable liabilities of all 

depository institutions over the one-year 

period that ends on the June 30 prior to 

the adjustment. No adjustment is made 

to the reserve requirement exemption 

amount if total reservable liabilities held 

at all depository institutions should 

decrease during the applicable time 

period. 

Total reservable liabilities of all 

depository institutions decreased by 8.6 

percent, from $20,841 billion to $19,057 

billion, between June 30, 2022, and June 

30, 2023.1 Accordingly, the reserve 

requirement exemption amount for 2024 

will remain at $36.1 million, unchanged 

from its level in 2023.2

Pursuant to Section 19(b)(2) of the Act 

(12 U.S.C. 461(b)(2)), transaction 

account balances maintained at each 

depository institution over the reserve 

requirement exemption amount and up 

to a certain amount, known as the low 

reserve tranche, may be subject to a 

reserve requirement ratio of not more 

than 3 percent (and which may be zero). 

Transaction account balances over the 

low reserve tranche may be subject to a 

reserve requirement ratio of not more 

than 14 percent (and which may be 

zero). Section 19(b)(2) also provides 

that, before December 31 of each year, 

the Board shall issue a regulation 

adjusting the low reserve tranche for the 

next calendar year. The Act requires the 

adjustment in the low reserve tranche to 

be 80 percent of the percentage increase 

or decrease in total transaction accounts 

of all depository institutions over the 

one-year period that ends on the June 30 

prior to the adjustment. 

Net transaction accounts of all 

depository institutions decreased 8.6 

percent, from $17,549 billion to $16,037 

billion, between June 30, 2022, and June 

30, 2023.3 Accordingly, the Board is 

amending Regulation D to set the low 

reserve tranche for net transaction 

accounts for 2024 at $644.0 million, a 

decrease of $47.7 million from 2023. 

The new low reserve tranche will be 

effective for all depository institutions 

beginning January 1, 2024. 

Effective March 26, 2020, the Board 

reduced reserve requirement ratios on 

all net transaction accounts to zero 

percent, eliminating reserve 

requirements for all depository 

institutions. The annual indexation of 

the reserve requirement exemption 

amount and the low reserve tranche for 

2024 is required by statute but will not 

affect depository institutions’ reserve 

requirements, which will remain zero. 

II. Regulatory Analysis 

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 

prescribed by statute and by the Board’s 

policy concerning reporting practices. 

The adjustments in the reserve 

requirement exemption amount and the 

low reserve tranche serve to reduce 

regulatory burdens on depository 

institutions. Accordingly, the Board 

finds good cause for determining, and so 


ddrumheller on DSK120RN23PROD with RULES1
Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Rules and Regulations 83317 

4 5 U.S.C. 603 and 604. 

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

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). 

determines, that notice in accordance 

with 5 U.S.C. 553(b) is unnecessary. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

does not apply to a rulemaking where a 

general notice of proposed rulemaking 

is not required.4 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 1995,5 the Board 

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 204 

Banks, Banking, Reporting and 

recordkeeping requirements. 

Authority and Issuance 

For the reasons set forth in the 

preamble, the Board is amending 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), 461, 

601, 611, and 3105. 

■ 2. Section 204.4 is amended by 

revising paragraph (f) to read as follows: 

§ 204.4 Computation of required reserves. 

* * * * * 

(f) For all depository institutions, 

Edge and Agreement corporations, and 

United States branches and agencies of 

foreign banks, required reserves are 

computed by applying the reserve 

requirement ratios in table 1 to this 

paragraph (f) to net transaction 

accounts, nonpersonal time deposits, 

and Eurocurrency liabilities of the 

institution during the computation 

period. 

TABLE 1 TO PARAGRAPH (f) 

Reservable liability Reserve requirement 

Net Transaction Accounts: 

$0 to reserve requirement exemption amount ($36.1 million). 

Over reserve requirement exemption amount ($36.1 million) and up to low reserve 

tranche ($644.0 million).

0 percent of amount. 

Over low reserve tranche ($644.0 million) .......................................................................... $0 plus 0 percent of amount over $644.0 million. 

Nonpersonal time deposits .................................................................................................. 0 percent. 

Eurocurrency liabilities ........................................................................................................ 0 percent. 

By order of the Board of Governors of the 

Federal Reserve System, acting through the 

Director of the Division of Monetary Affairs 

under delegated authority. 

Ann E. Misback, 

Secretary of the Board. 

[FR Doc. 2023–26212 Filed 11–28–23; 8:45 am] 

BILLING CODE 6210–01–P 

FEDERAL RESERVE SYSTEM 

12 CFR Part 209 

[Regulation I; Docket No. R–1824] 

RIN 7100–AG72 

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 28, 2023, the total 

consolidated asset threshold will be 

$12,517,000,000 through December 31, 

2024. 

DATES: 

Effective date: December 29, 2023. 

Applicability date: The adjusted 

threshold for total consolidated assets 

will apply beginning on January 1, 2024. 

FOR FURTHER INFORMATION CONTACT: 

Benjamin Snodgrass, Senior Counsel 

(202/263–4877), Legal Division; or 

Kelsey Cassidy, Financial Institutions 

Policy Analyst (202/465–6817), Reserve 

Bank Operations and Payments Systems 

Division. For users of TTY–TRS, please 

contact 711 from any telephone, 

anywhere in the United States or (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 

when the Reserve Bank issues the 

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 


ddrumheller on DSK120RN23PROD with RULES1