FINAL RULE--AMENDMENT TO REGULATION D.

The Board of Governors is amending 12 C.F.R. Part 204, its Regulation D (Reserve Requirements of Depository Institutions), to decrease the amount of transaction accounts subject to a reserve requirement ratio of three percent, as required by section 19(b)(2)(C) of the Federal Reserve Act, from $47.8 million to $46.5 million of net transaction accounts. This adjustment is known as the low reserve tranche adjustment. The Board is increasing from $4.7 million to $4.9 million the amount of reserveable liabilities of each depository institution that is subject to a reserve requirement of zero percent. This action is required by section 19(b)(11)(B) of the Federal Reserve Act, and the adjustment is known as the reserveable liabilities exemption adjustment. The Board is also increasing the deposit cutoff levels that are used in conjunction with the reserveable liabilities exemption to determine the frequency of deposit reporting from $78.9 million to $81.9 million for nonexempt depository institutions and from $50.7 million to $52.6 million for exempt institutions. (Nonexempt institutions are those with total reserveable liabilities exceeding the amount exempted from reserve requirements ($4.9 million) while exempt institutions are those with total reserveable liabilities not exceeding the amount exempted from reserve requirements.) Thus, beginning in September 1999, nonexempt institutions with total deposits of $81.9 million or more will be required to report weekly while nonexempt institutions with total deposits less than $81.9 million may report quarterly, in both cases on form FR 2900. Similarly, exempt institutions with total deposits of $52.6 million or more will be required to report quarterly on form FR 2910q while exempt institutions with total deposits less than $52.6 million may report annually on form FR 2910a.

Effective December 1, 1998, 12 C.F.R. Part 204 is amended 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), 371a, 461, 601, 611, and 3105.

2. Section 204.9 is revised to read as follows:

Section 204.9 Reserve requirement ratios.

(a) Reserve percentages. The following reserve ratios are prescribed for all depository institutions, Edge and Agreement corporations, and United States branches and agencies of foreign banks:

(b) Exemption from reserve requirements. Each depository institution, Edge or agreement corporation, and U.S. branch or agency of a foreign bank is subject to a zero percent reserve requirement on an amount of its transaction accounts subject to the low reserve tranche in paragraph (a) of this section not in excess of $4.9 million determined in accordance with section 204.3(a)(3).

Category                      Reserve requirements(1)

Net transaction accounts:

$0 to 46.5 million            3 percent of amount
over $46.5 million            $1,395,000 plus 10 percent of
                                amount over $46.5. million
Nonpersonal time deposits     0 percent
Eurocurrency liabilities      0 percent

(1.) Before deducting the adjustment to be made by the paragraph (b) of this section.