Source: https://www.law.cornell.edu/cfr/text/12/201.4
Timestamp: 2017-07-25 16:57:46
Document Index: 486305152

Matched Legal Cases: ['art 201', '§ 201', '§ 201', '§ 201', 'art 201', 'art 201', 'art 201', 'art 201', 'art 201', 'art 201', 'art 201', 'art 201', 'art 201']

12 CFR 201.4 - Availability and terms of credit. | US Law | LII / Legal Information Institute
CFR › Title 12 › Chapter II › Subchapter A › Part 201 › Section 201.4 12 CFR 201.4 - Availability and terms of credit.
§ 201.4 Availability and terms of credit.
(a)Primary credit. A Federal Reserve Bank may extend primary credit on a very short-term basis, usually overnight, as a backup source of funding to a depository institution that is in generally sound financial condition in the judgment of the Reserve Bank. Such primary credit ordinarily is extended with minimal administrative burden on the borrower. A Federal Reserve Bank also may extend primary credit with maturities up to a few weeks as a backup source of funding to a depository institution if, in the judgment of the Reserve Bank, the depository institution is in generally sound financial condition and cannot obtain such credit in the market on reasonable terms. Credit extended under the primary credit program is granted at the primary credit rate. (b)Secondary credit. A Federal Reserve Bank may extend secondary credit on a very short-term basis, usually overnight, as a backup source of funding to a depository institution that is not eligible for primary credit if, in the judgment of the Reserve Bank, such a credit extension would be consistent with a timely return to a reliance on market funding sources. A Federal Reserve Bank also may extend longer-term secondary credit if the Reserve Bank determines that such credit would facilitate the orderly resolution of serious financial difficulties of a depository institution. Credit extended under the secondary credit program is granted at a rate above the primary credit rate. (c)Seasonal credit. A Federal Reserve Bank may extend seasonal credit for periods longer than those permitted under primary credit to assist a smaller depository institution in meeting regular needs for funds arising from expected patterns of movement in its deposits and loans. An interest rate that varies with the level of short-term market interest rates is applied to seasonal credit. (1) A Federal Reserve Bank may extend seasonal credit only if: (i) The depository institution's seasonal needs exceed a threshold that the institution is expected to meet from other sources of liquidity (this threshold is calculated as a certain percentage, established by the Board of Governors, of the institution's average total deposits in the preceding calendar year); and (ii) The Federal Reserve Bank is satisfied that the institution's qualifying need for funds is seasonal and will persist for at least four weeks. (2) The Board may establish special terms for seasonal credit when depository institutions are experiencing unusual seasonal demands for credit in a period of liquidity strain. (d)Emergency credit for others - (1)Authorization to extend credit. In unusual and exigent circumstances, the Board, by the affirmative vote of not less than five members,
1 may authorize any Federal Reserve Bank, subject to such conditions and during such periods as the Board may determine, to extend credit to any participant in a program or facility with broad-based eligibility established and operated in accordance with this paragraph (d).
1 Unless fewer are authorized pursuant to section 11(r) of the Federal Reserve Act. 12 U.S.C. 248(r).
(2)Approval of the Secretary of the Treasury. A program or facility may not be established under this paragraph (d) without obtaining the prior approval of the Secretary of the Treasury.
(3)Disclosure of justification and terms. As soon as is reasonably practicable, and no later than 7 days after a program or facility is authorized under this paragraph (d), the Board and the authorized Federal Reserve Bank or Federal Reserve Banks, as appropriate, will make publicly available a description of the program or facility, a description of the market or sector of the financial system to which the program or facility is intended to provide liquidity, a description of the unusual and exigent circumstances that exist, the intended effect of the program or facility, and the terms and conditions for participation in the program or facility. In addition, within the same 7-day period, the Board will provide a copy of this information to the Committee on Banking, Housing and Urban Affairs of the U.S. Senate and the Committee on Financial Services of the U.S. House of Representatives.
(4)Broad-based eligibility.
(i) A program or facility established under this paragraph (d) must have broad-based eligibility in accordance with terms established by the Board.
(A) The program or facility is designed for the purpose of assisting one or more specific companies avoid bankruptcy, resolution under Title II of Dodd-Frank Wall Street Reform and Consumer Protection Act ( Pub. L. 111-203, 12 U.S.C. 5381et seq.), or any other Federal or State insolvency proceeding, including by removing assets from the balance sheet of one or more such company;
(5)Insolvency.
(i) A Federal Reserve Bank may not extend credit through a program or facility established under this paragraph (d) to any person or entity that is insolvent or to any person or entity that is borrowing for the purpose of lending the proceeds of the loan to a person or entity that is insolvent.
(A) The person or entity is in bankruptcy, resolution under Title II of Public Law 111-203 ( 12 U.S.C. 5381et seq.) or any other Federal or State insolvency proceeding;
(A) A written certification from the person or from the chief executive officer or other authorized officer of the entity, at the time the person or entity initially borrows under the program or facility, that the person or entity is not in bankruptcy, resolution under Title II of Public Law 111-203 ( 12 U.S.C. 5381et seq.) or any other Federal or State insolvency proceeding, and has not failed to generally pay its undisputed debts as they become due during the 90 days preceding the date of borrowing under the program or facility;
(6)Indorsement or other security.
(i) All credit extended under a program or facility established under this paragraph (d) must be indorsed or otherwise secured, in each case, to the satisfaction of the lending Federal Reserve Bank.
(7)Penalty rate and fees.
(i) The Board will determine the interest rate to be charged on any credit extended through a program or facility established under this section in accordance with this paragraph (d) and the provisions of section 14, subdivision (d) of the Federal Reserve Act ( 12 U.S.C. 357). The Board may determine the interest rate by auction or such other method as the Board determines in accordance with section 14, subdivision (d) of the Federal Reserve Act ( 12 U.S.C. 357).
(8)Evidence regarding unavailability of adequate credit accommodation.
(i) Each lending Federal Reserve Bank must obtain evidence that, under the prevailing circumstances, participants in a program or facility established under this paragraph (d) are unable to secure adequate credit accommodations from other banking institutions.
(9)Termination of program or facility.
(i) A program or facility established under this paragraph (d) shall cease extending new credit no later than one year after the date of the first extension of credit under the program or facility or the date of any extension of the program or facility by the Board under paragraph (d)(9)(ii) of this section.
(ii) A program or facility may be renewed upon the vote of not less than five members of the Board 2 that unusual and exigent circumstances continue to exist and the program or facility continues to appropriately provide liquidity to the financial system, and the approval of the Secretary of the Treasury.
2 Unless fewer are authorized pursuant to section 11(r) of the Federal Reserve Act. 12 U.S.C. 248(r).
(10)Reporting requirements. The Board will comply with the reporting requirements of 12 U.S.C. 248(s) and 12 U.S.C. 343(3)(C) pursuant to their terms.
(11)No obligation to extend credit. This paragraph (d) does not entitle any person or entity to obtain any credit or any increase, renewal or extension of maturity of any credit from a Federal Reserve Bank.
(12)Participation in programs and facilities and vendor selection.
(i) Participation in any program or facility under this paragraph (d) shall not be limited or conditioned on the basis of any legally prohibited basis, such as the race, religion, color, gender, national origin, age or disability of the borrower.
(13)Short-term emergency credit secured solely by United States or agency obligations. In unusual and exigent circumstances and after consultation with the Board, a Federal Reserve Bank may extend credit under section 13(13) of the Federal Reserve Act if the collateral used to secure such credit consists solely of obligations of, or obligations fully guaranteed as to principal and interest by, the United States or an agency thereof. Prior to extending credit under this paragraph (d)(13), the Federal Reserve Bank must obtain evidence that credit is not available from other sources and failure to obtain such credit would adversely affect the economy. Credit extended under this paragraph (d)(13) may not be extended for a term exceeding 90 days, must be extended at a rate above the highest rate in effect for advances to depository institutions as determined in accordance with section 14(d) of the Federal Reserve Act, and is subject to such limitations and conditions as provided by the Board. (e)Term auction facility.
(1) A Federal Reserve Bank may make an advance to a depository institution pursuant to an auction conducted under this paragraph and at the rate specified in § 201.51(e) if, in the judgment of the Reserve Bank, the depository institution is in generally sound financial condition and is expected to remain in that condition during the term of the advance. An auction under this paragraph shall be conducted subject to such conditions, including conditions regarding the participants, size and duration of the facility, minimum bid amount, maximum bid amount, term of advance, minimum bid rate, use of proceeds, and schedule of auction dates, as the Board may establish from time to time in connection with the term auction facility. The Board may appoint one or more Reserve Banks or others to conduct the auction.
(2) Authorization for the term auction facility established by § 201.4(e)(1) shall expire on such date as set by the Board.
Title 12 published on 17-Jun-2017 04:33The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 12 CFR Part 201 after this date.2017-06-26; vol. 82 # 121 - Monday, June 26, 201782 FR 28755 - Regulation A: Extensions of Credit by Federal Reserve Banks
typeregulations.gov FR Doc.2017-13106 RIN Docket No.R-1565 RIN 7100AE-79 FEDERAL RESERVE SYSTEM Final rule. This rule is effective June 26, 2017. The rate changes for primary and secondary credit were applicable beginning June 15, 2017. 12 CFR Part 201 SummaryThe Board of Governors of the Federal Reserve System (“Board”) has adopted final amendments to its Regulation A to reflect the Board&apos;s approval of an increase in the rate for primary credit at each Federal Reserve Bank. The secondary credit rate at each Reserve Bank automatically increased by formula as a result of the Board&apos;s primary credit rate action.
2017-04-18; vol. 82 # 73 - Tuesday, April 18, 201782 FR 18215 - Regulation A: Extensions of Credit by Federal Reserve Banks
typeregulations.gov FR Doc.2017-07742 RIN7100-AE76 Docket No.R-1562 FEDERAL RESERVE SYSTEM Final rule. The amendments to part 201 (Regulation A) are effective April 18, 2017. The rate changes for primary and secondary credit were applicable on March 16, 2017. 12 CFR Part 201 SummaryThe Board of Governors of the Federal Reserve System (“Board”) has adopted final amendments to its Regulation A to reflect the Board&apos;s approval of an increase in the rate for primary credit at each Federal Reserve Bank. The secondary credit rate at each Reserve Bank automatically increased by formula as a result of the Board&apos;s primary credit rate action.
2017-01-23; vol. 82 # 13 - Monday, January 23, 201782 FR 7635 - Regulation A: Extensions of Credit by Federal Reserve Banks
typeregulations.gov FR Doc.2017-00612 RIN7100 AE66 Docket No.R-1558 FEDERAL RESERVE SYSTEM Final rule. The amendments to part 201 (Regulation A) are effective January 23, 2017. The rate changes for primary and secondary credit were effective as determined by the Board in its December 14, 2016 announcement. 12 CFR Part 201 SummaryThe Board of Governors of the Federal Reserve System (“Board”) has adopted final amendments to its Regulation A to reflect the Board&apos;s approval of an increase in the rate for primary credit at each Federal Reserve Bank. The secondary credit rate at each Reserve Bank automatically increased by formula as a result of the Board&apos;s primary credit rate action.
2015-12-23; vol. 80 # 246 - Wednesday, December 23, 201580 FR 79671 - Extensions of Credit by Federal Reserve Banks
typeregulations.gov FR Doc.2015-32295 RIN7100-AE42 RegulationA Docket No.R-1528 FEDERAL RESERVE SYSTEM Final rule. The amendments to part 201 (Regulation A) are effective December 23, 2015. The rate changes for primary and secondary credit were applicable on December 17, 2015, as specified in 12 CFR 201.51, as amended. 12 CFR Part 201 SummaryThe Board of Governors of the Federal Reserve System (“Board”) has adopted final amendments to its Regulation A to reflect the Board&apos;s approval of an increase in the rate for primary credit at each Federal Reserve Bank. The secondary credit rate at each Reserve Bank automatically increased by formula as a result of the Board&apos;s primary credit rate action.
2015-12-18; vol. 80 # 243 - Friday, December 18, 201580 FR 78959 - Extensions of Credit by Federal Reserve Banks
typeregulations.gov FR Doc.2015-30584 RIN7100-AE08 RegulationA Docket No.R-1476 FEDERAL RESERVE SYSTEM Final rule. Effective January 1, 2016. 12 CFR Part 201 SummaryThe Board is adopting amendments to Regulation A (Extensions of Credit by Federal Reserve Banks) to implement the emergency lending authorities provided under the 3rd undesignated paragraph of section 13 of the Federal Reserve Act (the FRA) as amended by sections 1101 and 1103 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act). These provisions of the Dodd-Frank Act require the Board, in consultation with the Secretary of the Treasury, to establish by regulation policies and procedures with respect to emergency lending under section 13(3) of the FRA.
12 CFR 201.4 — Availability and Terms of Credit.
12 CFR 201.51 — Interest Rates Applicable to Credit Extended by a Federal Reserve Bank.