Regulation A: Extensions of Credit by Federal Reserve Banks

Title:
Regulation A: Extensions of Credit by Federal Reserve Banks
Subject: Primary, secondary credit rates
Agency: Federal Reserve
Status: Final rule
Summary:

The Board of Governors of the Federal Reserve System (“Board”) has Start Printed Page 16524adopted final amendments to its Regulation A to reflect the Board’s approval of a decrease in the rate for primary credit at each Federal Reserve Bank. The secondary credit rate at each Reserve Bank automatically decreased by formula as a result of the Board’s primary credit rate action. On March 15, 2020, the Board voted to approve a 1.50 percentage point decrease in the primary credit rate in effect at each of the twelve Federal Reserve Banks, thereby decreasing from 1.75 percent to 0.25 percent the rate that each Reserve Bank charges for extensions of primary credit. In addition, the Board had previously approved the renewal of the secondary credit rate formula, the primary credit rate plus 50 basis points. Under the formula, the secondary credit rate in effect at each of the twelve Federal Reserve Banks decreased by 1.50 percentage point as a result of the Board’s primary credit rate action, thereby decreasing from 2.25 percent to 0.75 percent the rate that each Reserve Bank charges for extensions of secondary credit. The amendments to Regulation A reflect these rate changes.

 The 1.50 percentage point decrease in the primary credit rate was associated with a 1.00 percentage point decrease in the target range for the federal funds rate (from a target range of 1 percent to 11/4 percent to a target range of zero percent to 1/4 percent) announced by the Federal Open Market Committee on March 15, 2020, as described in the Board’s amendment of its Regulation D published elsewhere in today’s Federal Register..
FR Doc: 2020-05804
Date proposed:
Comments due date:

Final rule effective date:

The amendments to part 201 (Regulation A) are effective March 24, 2020. The rate changes for primary and secondary credit were applicable on March 16, 2020.

Rule compliance date:
Agency release:

Related Reg Report item(s):

Be the first to comment

Leave a Reply

Your email address will not be published.