91534 Federal Register / Vol. 89, No. 224 / Wednesday, November 20, 2024 / Rules and Regulations 

2 12 CFR 204.5(a)(1). 

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

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, 604. 

11 44 U.S.C. 3506; see 5 CFR part 1320 Appendix 

A.1. 

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 

established IORB at 4.9 percent.6

II. Amendment to IORB 

The Board is amending § 204.10(b)(1) 

of Regulation D to establish IORB at 4.65 

percent. The amendment represents a 

0.25 percentage point decrease in IORB. 

This decision was announced on 

November 7, 2024, with an effective 

date of November 8, 2024, in the Federal 

Reserve Implementation Note that 

accompanied the FOMC’s statement on 

November 7, 2024. The FOMC statement 

stated that the Committee decided to 

lower the target range for the federal 

funds rate to 41⁄2 to 43⁄4 percent. 

The Federal Reserve Implementation 

Note stated: 

The Board of Governors of the Federal 

Reserve System voted unanimously to lower 

the interest rate paid on reserve balances to 

4.65 percent, effective November 8, 2024. 

As a result, the Board is amending 

§ 204.10(b)(1) of Regulation D to 

establish IORB at 4.65 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 Congressionallydelegated 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 change for IORB that is 

reflected in the final amendment to 

Regulation D was 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 

this final amendment 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. 

Authority and Issuance 

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), 461, 

601, 611, and 3105. 

■ 2. Section 204.10 is amended by 

revising paragraph (b)(1) to read as 

follows: 

§ 204.10 Payment of interest on balances. 

* * * * * 

(b) * * * 

(1) For balances maintained in an 

eligible institution’s master account, 

interest is the amount equal to the 

interest on reserve balances rate (‘‘IORB 

rate’’) on a day multiplied by the total 

balances maintained on that day. The 

IORB rate is 4.65 percent. 

* * * * * 

By order of the Board of Governors of the 

Federal Reserve System. 

Ann E. Misback, 

Secretary of the Board. 

[FR Doc. 2024–26991 Filed 11–19–24; 8:45 am] 

BILLING CODE 6210–01–P 

FEDERAL RESERVE SYSTEM 

12 CFR Part 204 

[Regulation D; Docket No. R–1848] 

RIN 7100–AG 88 

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 2025. The 

annual indexation of these amounts is 

required notwithstanding the Board’s 

action in March 2020 of setting all 


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Federal Register / Vol. 89, No. 224 / Wednesday, November 20, 2024 / Rules and Regulations 91535 

1The June 30th value for 2023 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 2023 may differ from 

the value used in the previous year’s calculation 

because depository institutions may revise their 

deposit data to correct for inaccuracies. 

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

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

reserve requirement ratios to zero. The 

Board is amending Regulation D to set 

the reserve requirement exemption 

amount at $37.8 million (increased from 

$36.1 million in 2024) and the amount 

of the low reserve tranche at $645.8 

million (increased from $644.0 million 

in 2024). The adjustments to both of 

these amounts are derived using 

statutory formulas specified in the 

Federal Reserve Act (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 20, 2024. 

Compliance date: The new exemption 

amount and low reserve tranche will 

apply beginning January 1, 2025. 

FOR FURTHER INFORMATION CONTACT: 

Benjamin Snodgrass, Senior Counsel 

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

Payne, Lead Financial Institution and 

Policy Analyst (202/306–9573), 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 increased by 5.7 

percent, from $19,079 billion to $20,172 

billion, between June 30, 2023, and June 

30, 2024.1 Accordingly, the Board is 

amending Regulation D to set the 

reserve requirement exemption amount 

for 2025 at $37.8 million, an increase of 

$1.7 million from its level in 2024.2

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 increased 0.3 

percent, from $16,048 billion to $16,102 

billion, between June 30, 2023, and June 

30, 2024.3 Accordingly, the Board is 

amending Regulation D to set the low 

reserve tranche for net transaction 

accounts for 2025 at $645.8 million, an 

increase of $1.8 million from 2024. 

The new reserve requirement 

exemption amount and low reserve 

tranche will be effective for all 

depository institutions beginning 

January 1, 2025. 

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 

2025 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 

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: 


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91536 Federal Register / Vol. 89, No. 224 / Wednesday, November 20, 2024 / Rules and Regulations 

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 ($37.8 million) ......................................... 0 percent of amount. 

Over reserve requirement exemption amount ($37.8 million) and up to low reserve 

tranche ($645.8 million).

0 percent of amount. 

Over low reserve tranche ($645.8 million) ....................................................................... $0 plus 0 percent of amount over $645.8 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, November 12, 2024. 

Ann E. Misback, 

Secretary of the Board. 

[FR Doc. 2024–26981 Filed 11–19–24; 8:45 am] 

BILLING CODE 6210–01–P 

SMALL BUSINESS ADMINISTRATION 

13 CFR Part 123 

RIN 3245–AI20 

Disaster Assistance Loan Program 

Updates 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Direct final rule. 

SUMMARY: This direct final rule amends 

the U.S. Small Business 

Administration’s (SBA or Agency) 

regulations governing the SBA Disaster 

Loan Program by revising the definition 

of contiguous counties, clarifying the 

timeline for a governor’s request to be 

delivered to an SBA Disaster Assistance 

Field Operations Center, and 

modernizing language for clarity and 

consistency. 

DATES: 

Effective date: This final rule is 

effective January 21, 2025 without 

further action. If significant adverse 

comment is received, SBA will publish 

a timely withdrawal of the rule in the 

Federal Register. 

Applicability date: This rule is 

applicable for disasters declared on or 

after January 21, 2025. 

Comment date: Comments must be 

received on or before December 20, 

2024. 

ADDRESSES: You may submit comments, 

identified by docket number SBA– 

2024–0015 through the Federal 

eRulemaking Portal: http://

www.regulations.gov. Follow the 

instructions for submitting comments. 

SBA will post all comments on 

www.regulations.gov. If you wish to 

submit confidential business 

information (CBI) as defined in the User 

Notice at www.regulations.gov, please 

send an email to Eric Wall at eric.wall@

sba.gov and highlight the information 

that you consider to be CBI and explain 

why you believe SBA should hold this 

information as confidential. All other 

comments must be submitted through 

the Federal eRulemaking Portal 

described above. Highlight the 

information that you consider to be CBI 

and explain why you believe SBA 

should hold this information as 

confidential. SBA will review the 

information and make the final 

determination whether it will publish 

the information. 

FOR FURTHER INFORMATION CONTACT: Eric 

Wall, Office of Disaster Recovery and 

Resilience, 409 3rd St. SW, Washington, 

DC 20416, (202) 205–6739. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The SBA’s Disaster Loan Program 

provides critical assistance to 

communities after a disaster. Pursuant 

to Section 7(b) of the Small Business 

Act, 15 U.S.C. 636(b) (the Act), the SBA 

is authorized to make direct loans to 

homeowners, renters, businesses, and 

non-profit organizations that have been 

adversely affected by a disaster. Also 

pursuant to the Act, the SBA may 

declare an Agency disaster in areas 

demonstrating substantial physical or 

economic damage because of natural or 

other disasters. 

With natural disasters increasing in 

size, severity, and frequency across the 

United States and its territories, SBA is 

expanding the definition of contiguous 

counties, clarifying certain aspects of 

disaster declaration requests, and 

simplifying language to ensure 

consistency. 

SBA believes these changes are 

necessary to: 

• Increase efficiencies in the 

administration and delivery of the 

disaster loan program to better achieve 

mission and improve outcomes for 

economic recovery, 

• Recognize the unique economic 

circumstances of island chains, 

• Clarify the timeline for Governor 

submissions of disaster requests, and 

• Ensure consistency and clarity of 

language within SBA guidance 

documents. 

II. Description of Regulatory Changes 

SBA is amending the language in 13 

CFR 123.2 (What are disaster loans and 

disaster declarations?), 123.3 (How are 

disaster declarations made?), and 123.4 

(What is a disaster area and why is it 

important?) to update the language from 

‘‘disaster victims’’ to ‘‘disaster 

survivors.’’ This update will modernize 

the language in the CFR to reflect the 

strength of those who have survived a 

disaster. The change will also align the 

regulations with the terminology 

currently used by the SBA Disaster Loan 

Program. 

SBA is amending 13 CFR 123.2 to 

subdivide the paragraph into two 

separate paragraphs. This technical 

change separates the definition of 

disaster loans and disaster declarations 

into a format easier to comprehend. 

SBA is amending the first sentence in 

13 CFR 123.3(a)(3)(i), How are disaster 

declarations made?, to replace the word 

U.S. possession with ‘‘territory’’ to 


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