Board proposes revisions to provisions in Reg A for target range, former TALF program

Revisions to its Regulation A that would address circumstances in which the Federal Reserve’s monetary policy panel establishes a target range for the federal funds rate rather than a single target rate, and that reflect the expiration of the Term Asset Backed Securities Loan Facility (TALF) program, were proposed by the Federal Reserve Monday, with a 30-day comment period.

Specifically, the proposed change to Reg A (which governs extensions of credit by Federal Reserve Banks) would revise the provisions regarding the establishment of the primary credit rate in a financial emergency, and delete the provisions relating to the use of credit ratings for collateral for extensions of credit under the former TALF program, the Fed’s filings with the Federal Register state.

With regard to the primary credit rate, the Fed is proposing that, in a financial emergency, the primary credit rate is the target federal funds rate or, if the Federal Open Market Committee (FOMC) has established a target range for the federal funds rate, a rate corresponding to the top of the target range.

With regard to TALF, the board is simply proposing to remove the provisions within Reg A, as those became unnecessary with the conclusion of TALF activity in 2014, when the final outstanding TALF loan was repaid in full.

Federal Reserve Board requests public comment on proposal to amend Regulation A