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frrnzz May 30, 1980

To the Addressee:

As indicated in this Bank’s Circular No. 8838, we are enclosing

copies of the text of the regulatory changes that reflect the actions taken

on May 22, 1980, by the Board of Governors of the Federal Reserve System to

modify its credit restraint program:

(1) Amendment to Subpart A (Consumer Credit) of the Credit Restraint

regulation, to reduce the special deposit requirement to an

amount equal to 7-1/2 percent of the amount by which a creditor's

outstanding covered credit during a month exceeds its base.

(2) Amendment to Subpart B (Short Term Financial Intermediaries) of

the Credit Restraint regulation, to decrease the special deposit

ratio to 7-1/2 percent for creditors subject to this subpart.

(3) Amendment to Subpart C (Nonmember Commercial Banks) of the Credit

Restraint regulation, to decrease the special deposit ratio for

nonmember commercial banks to 5 percent and to increase, generally,

a covered bank's managed liabilities base.

(4) Amendment to Subpart D (Reports) of the Credit Restraint regulation,

to reduce the reporting burden under the program on commercial banks,

U.S. branches and agencies of foreign banks, and on finance compa

nies and bank holding companies, and to discontinue the reporting

requirements for large corporate borrowers.

(5) Amendment to Regulation D (Reserves of Member Banks), to decrease

the marginal reserve requirement ratio, for member banks, Edge and

Agreement Corporations, and certain U.S. branches and agencies of

foreign banks, to 5 percent and to increase, generally, a covered

institution's managed liabilities base.

Additional copies of the enclosures will be furnished upon

request.

Circulars Division

FEDERAL RESERVE BANK OF NEW YORK

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TIT LE 1 2 — BANKS AND BANKING

C H A P T ER I I — F E D E R AL R E S ER V E S YS T E M

SUBCHAP TER A -- BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

[Regulation D]

(Docket No. R-0304)

Part 204 — RESERVES OF MEMBER BANKS

Marginal Reserve Requirements

AGENCY: Board of Governors of th e Federal Reserve System.

ACTION: Final ru le .

SUMMARY: On Octo ber 6, 1979, the Board of Gove rno rs amended Regul atio n D

to esta blish an 8 per cent margi nal reserve req uirem ent on the amount

by which th e total of managed liabilities of member banks (a nd Edge

and Agree ment Corporations) and certain United States branches and agencies

of foreign banks e xceeds the amoun t of an institut ion's base of managed

liabili ties. On Mar ch 14, 1980, the Boar d acted to increase the marg inal

reserve requi reme nt ra tio from 8 to 10 per cent and to reduce an insti tution's

managed liabilities base by the greater of 7 per cent or by the amount

of reduction in an institut ion's gross loans to non-United States residents

and balance s due from foreign offices of other institutions. Based

upon an evaluat ion of recent banking and other credi t data, the Board

has determine d to decrease the marginal reserve requirement ratio to

5 per cent and, genera lly, to increase the mana ged liabil ities base

of an insti tuti on by 7-1/2 per cent.

EFFECTIV E DATE: This action is effective for marginal reserves required

to be mainta ined du ring the seven-day period beginning June 12, 1980,

against total marginal ma naged liabilities out standing during the seven-

day period be ginn ing May 29, 1980.

FOR FURTH ER INFORMATION CONTACT: Gilbert T. Schwartz, Assis tant General

Coun sel (202/452-3625), or Paul S. Pilecki, Attorney (202/452-3281),

Legal Division, Board of Governors of the Federal Reserve System, Washington,

D. C. 20551.

SUPPLEMEN TARY INFORMATION: On October 6, 1979, the Board of Governors

amen ded Regu lat ion D (12 CF R Part 204) to impose a margi nal reserve

requ ire ment of 8 per c ent on the amount by whi ch the total managed li abilitie s

of member banks (and Edge and Agreement Corporations) and United States

branches and agencies of foreign banks with total worldwide consolidated

bank assets in excess of $1 billion exceeds the amount of the institution's

managed liabilities outstanding during the base period (September 13-

26, 1979) or $100 mil lio n, wh ich eve r is grea ter (44 Fe d. R eg . 60071).

[Ref. Cir. No. 8838]

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On Mar ch 14, 1980, the Board acted to increase the marginal reserve

rati o to 10 per ce nt and to adjus t the base of managed lia bilit ies (45

Fe d. Re g. 17924). Man age d liabi lities incl ude the total of (1) time

deposits in denomination s of $100,000 or more with original maturities

of less than one year; (2) Fed eral funds borrow ings with origina l maturiti es

of less than one year from U. S. offi ces of deposi tor y instit utions

not required to maint ain Federal reserves and from U. S. gover nment

agencies; (3) repur cha se agreemen ts with orig inal maturiti es of less

than one year on U. S. gove rnm ent and agency securit ies en tered into

with parties other than institutions requ ired to maintai n Federal re

serves; and (4) Euro dolla r borrowin gs from foreig n banking offices,

asset sales to related foreign offices and member bank foreign office

loans to U. S. residents. The purpose s of these actions were to better

control the expansi on of bank credit, help curb speculative e xcesses

in financial, foreign exchange and commodity markets and thereby serve

to dampen inflationary forces.

Based upon an evaluation of recent banking and other credit

data, the Board has dete rmined to decrease the marginal reserve requirement

ratio to 5 per cent. This red uctio n will take place for the reserve

m a i n te n a nc e p e r i od be gi n n in g o n Thursday, June 12, 1980. In addition,

the Board has dete rmined to adjust the base amount of managed liabilities

for institutions* subjec t to the marg ina l reserve requi reme nt program.

For the reserve co mpu tati on period beginn ing Ma y 29, 1980, if an instit ution

was a net borrower of managed liabilities during the fourteen-day period

ending Sep tember 26, 1979, its managed liabi liti es base shall be the

lesser of its manag ed liabilities base for the reserve comput ation week

ending May 21, 1980, as re port ed on line 8 of Form FR 2414d, mult ipl ied

times 1.075 or its daily average total managed liabilities during the

fou rte en-d ay per iod endin g September 26, 1979. For example, if an instituti on

has a reported manag ed liabilities base for the computation period ending

M a y 21, 1980, of $100 m illion, its new base w o ul d be $107.5 m i l li o n

(107.5 per cent times $100 million). However, if such inst ituti on's

daily average total managed liabilities for the fourteen-day period

ending Septe mber 26, 1979, was $105 millio n, then the new man age d liabi liti es

base of such i n s ti t u ti o n w ou ld be $105 million, beca use the mana g e d

liabi litie s base cannot be increa sed above the Septem ber amount.

The mana ged liabilitie s base will continue to be reduced in

com put ati on periods after Ma y 28, 1980, by the amount by whi ch the institut ion's

daily average of gross loans to non-Unite d States residents and gross

bal anc es due from foreign o ffices of other i nst itutions during the statement

week is lower than the lowes t daily average amo unt of such loans and

bal anc es ou tst a nd i n g d u ri n g any stat eme nt week for the pe r io d from Ma rch 6,1980 to May 28, 1980. The base for an institutio n that was a net borrower

of man age d liabilit ies dur ing the base per iod (September 13-26, 1979),

wil l not be reduced below $100 million. The base will not change for

an institu tion that was a net lender of managed liabilities during the

p e r i o d S e pt emb er 13-26, 1979.

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In order to achieve the obje cti ves of this action more quickly,

the Boar d for good cause finds that the notice, publ ic procedure , and

defe rra l of effect ive date provisi ons of 5 U.S.C. § 553(b) w ith re gard

to this action is imprac ticable and contrar y to the public interest.

These actions are taken pursuant to the Board's authority

under secti ons 19, 25 and 25(a) of the Fede ral Rese rve Act (12 U.S.C.

§§ 461, 601 et seq .) and under sec tion 7 of the Inte rnat iona l Bankin g

Act of 1978 (12 U.S.C. § 3105).

Effective J une 12, 1980, section 204.5 of Regula tion D (12 CF R 204.5)

is revise d as follows:

§ 204.5 RESERVE REQUIREMEN TS

* * * * *

(f) Margi nal Reserve Requ ire men ts.

(1) Memb er ban ks . A member bank shall mai nta in a dail y averag e

reserve balanc e aga inst its time deposit s equal to 5 per ce nt of the

amount by which the daily average of its total managed liabilities during

the seven-day comput ation peri od ending eight days prior to the beginning

of the corres ponding sev en-day reserve maint enanc e period exceeds the

member bank's managed liabilities base as d etermined in accordance with

su bp ar ag ra ph (3) . * * *

(2) Uni ted States branches and agenci es of foreign ban ks .

A Un ited States branch or agency of a foreign bank with total worldwide

conso lidat ed bank assets in excess of $1 billion shall maintain a daily

average reserve balance ag ainst its liabilities equal to 5 per cent

of the amount by which the daily average of its total manage d liabilities

during the seven-day comput ation period ending eight days prior to the

beginning of the corresponding seven-day reserve m aintenance period

exceeds the instituti on's manage d liabilities base as determined in

acc orda nce with subparag raph (3). * * *

(3) Ma nag ed liab ilitie s ba se . Duri ng the seve n-d ay reserve

compu tatio n period beginning May 29, 1980, and during each seven-day

reserve comp utation period thereafter, the mana ged liabilities base

of a member bank or a family of United States branches and agencies

of a foreig n bank ("family") shall be det erm ined as follows:

(i) For a membe r bank or fami ly that, on a daily averag e

basis, is a net borrower of total managed liabilities during the fourteen-

day base period ending September 26, 1979, its managed liabilitie s base

shall be the lesser of the report ed man age d liabil ities base for the

reserve comp uta tion peri od ending May 21, 1980, (Form FR 2414d, line 8)

multiplied times 1.075, or the daily average of its total managed liabilities

durin g the fou rte en- day peri od endin g Septe mber 26, 1979. For each

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coraputation peri od begin ning after May 28, 1980, the man aged liabi lities

base of a member bank or family shall be reduced during the computation

period by the amount by which its lowest daily average of

(A) gross loans to non-United States residents— /

and

(B) gros s balances due from foreign offices of

other institutions— 7 or institutions, the

time deposits of which are exempt from the

rate limitations of Regulation Q pursuant to

§ 2 17 .3 (g ) t h e r eo f ,— 7

outstand ing during any computatio n period beginning after May 28, 1980,

is lower than the lowest daily average amount of such loans and balances

outstanding during any computat ion period between March 6, 1980, and

May 28, 1980 . The amount representing such difference shall be rounded

to the next low est multi ple of $2 million.

In no event will the man aged lia biliti es base for an institution

that was a net borrower of managed li abilities during the fourteen -day

base period ending September 26, 1979, be less than $100 million.

(ii) For a memb er bank or fam ily that, on a dai ly average

basis, is a net lender of total managed liabilities during the fourteen-

day base peri od ending September 26, 1979, its man aged liabilit ies base

shall be the sum of its daily average negative total mana ged liab ilities

and $100 million.

18/ A Uni ted Sta tes resid ent is: (a) Any indi vid ual residin g (at the

time the credi t is extended) in any State of the Uni ted States or the

Dist rict of Columbia; (b) any corporation, par tnership , asso ciat ion

or other entity org ani zed therei n (" domestic corporation "); and (c)

any branc h or office lo cate d therein of any other ent ity wherever organized.

Credit extended to a foreign branch, office, subsidiary, affiliate or

other foreign es tablishment ("foreign affiliate") controlle d by one

or more such domest ic cor porat ions will not be deemed to be credit extended

to a Uni ted Stat es residen t if the proceed s will be used in its foreign

business or that of other foreign affiliates of the controlling domestic

c o r p o r a t i o n ( s ) .

19/ Any banking office located outside the States of the United States

and the Dis tric t of Col umb ia of a bank orga niz ed under domes tic or foreign

law.

20/ A foreig n centr al bank, or any interna tional orga nizat ion of which

the Uni ted States is a member, such as the Inte rnatio nal Bank for Reco nstr ucti on

and Develop ment (World Ba nk) , International Monetary Fund, Inter-American

Development Bank, and other foreign international, or supranational

entitie s exempt from inter est rate limi tatio ns under § 217.3(g)(3) of

Regulat ion Q (12 CFR 2 17. 3( g)(3)).

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Board of Governors of the Federal Reserve System

CREDIT RESTRAINT

AMENDMENTS TO SUBPARTS A, B, C, and D

(Modification of Credit Restraint Program)

[Docket No. R-030 0]

Part 229 - Credit Restraint

[Subpart A]

Consumer Credit

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Final Rule.

SUMMARY: On March 14, 1980, the Board adopted a consumer credit restraint p r o g r a m (12 C.F.R. Part 22 9, Subpart A; 45 Fed. Reg. 17927, March 19,

1980) that requires certain creditors that extend certain types of con

sumer credit to maintain a special depos it with the Federal Reserve

equal to 15% of the amount by which the creditor's o utstanding covered

credit during a month exceeds the creditor 's base. The purpose of the

p r o g r a m was to curb inflationary pressures in the economy by restraining

the growth of consumer credit cover ed by the regulation through the

imposition of the special deposit requirement. Recent trends in the

growt h of consumer credit indicate that modifi cation of the Board's

consumer credit reg ulation would be appropriate. The Board has therefore

amende d its consumer credit restraint regulation to reduce the special

dep osi t r equi reme nt to an amount equal to 7 1/2% of the amount by which

a creditor 's outsta nding c overed credit during a month exceeds its base.

EFF ECT IVE DATE: July 24, 1980.

FOR FURTH ER INFORMATION CONTACT: Rober t E. Mannion, Deput y General

Counsel (202/452-3274 ) ; Gilb ert T. Schwartz, Assis tant General Counsel

(202/452-3625); or Marg aret L. Egginton, Attor ney (202/452-3786); Legal

Division, Board of Governors of the Federal Reserve System, Washington,

D. C. 20551.

SUPPLE MENT ARY INFORMATION: In adopting its consumer credit restraint

regu lation , p ursu ant to the Cred it Con tro l Act (12 U.S.C. §§ 1901-1909)

as Im plemen ted by Execu tive Order 12201, the Board ado pted 15% of a

cred itor 's increase in covered credit as the required special deposit

amoun t because the Board regarded that amount as appropriate to restrain

the growth of covered credit. Since adoption of the regulation in mid-

March, trends in consumer credit have led the Board to conclude that

a reduc tion in the ratio to be applie d in dete rmin ing the special deposi t

For this Regulation to be complete, retain:

1) Regulat ion pamphlet entitled “Credit Restraint,” adopted effective March 14, 1980.2) Subpart D, effective March 28, 1980.

3) Amendment to Subpart B, effective March 28, 1980.4) Amendm ents to Subpart A, effect ive Ap ril 2, 1980 and April 14, 1980.5) This slip sheet.

[Ref. Cir. No. 8838]

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requir ement is appropriate. Beginnin g with the special deposi t for

the month of June, 1980, which mu st be held during the period beginning

Jul y 24, 1980, the amou nt of the special depos it will be equal to 7 1/2%

of the amount by which the creditor's out standin g covered credit during

the month exceed s the creditor's base.

The Boar d beli eves that it is in the publ ic i ntere st to reduce

the burden of its credit r estraint program, while maint aining its effectiveness, as promptly as possible, and that public ation of this rule

for comment would not serve a useful purpose. The Board therefo re for

good cause finds that the notice and public procedu re provision s of

5 U.S.C. § 553(b) w ith regard to this actio n are unn ece ssar y and contr ary

to the public i nterest.

Pursuant to its authorit y under the Credit Con trol Act (12

U.S.C. § 1901-1901), as impl emente d by Exe cuti ve Order 12201, the Board

here by ame nds 12 C.F.R. Part 229, S ubpar t A, effe cti ve July 24, 1980,

by substituting the number "7%" for the number "15," so that the first

sent ence of § 229.4(a) reads as set forth below:

SECTION 229.4 - MAINTE NANCE OF SPECIAL DEPOSIT

(a) Each covered credi tor shall hold a non-i nter est beari ng

spec ial dep osi t equal to 7 1/2 per cen t of the amount by which the

average amount of its covered credit outsta nding during the month exceeds

its base.

* * * * *

By order of the Board of Govervors of the Federal Reserve

System, eff ect ive May 22, 1980.

(Signed) Theo dor e E. Alli son

Theodore E. Allison

Secretar y of the Board

[SEAL]

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(Docket No. R-0301)

P A RT 2 2 9— C R E DI T R E ST R AI N T

[Subpart B]

Shor t Terra Fin anc ial Inte rmed iari es

AGENCY: Bo a r d of G ov ern ors of the Feder al Reserve System.

ACTION: Final Rule.

SUMMARY: On Marc h 14, 1980, the Board adopted this Subpar t pursuant

to the Cre dit Control Act (12 U.S.C. §§ 1901-1909) as impl emented by

Exe cut ive Orde r 12201 to rest rain the expa nsi on of short terra cred it

through mone y mark et funds and other similar creditors. This Subpart

subse quen tly was amended on Mar ch 28, 1980. Based upon an evaluat ion

of recent cred it data, the Board has deter mined to decrease the special

depos it ratio from 15 per cen t to 7-1/2 per cent for creditors subject

to this Subpart.

EFFEC TIVE DATE: This action is effective for special deposits require d

to be maintain ed during the seven-day maintena nce perio d beginning June 30,

1980, for the computat ion period be ginning June 16, 1980.

FOR FURT HER INFORMATION CONTACT: Gilb ert T. Schwartz, Assista nt Genera l

Counse l (202/452-3625), or Daniel L. Rhoads, Attorne y (202/452-3711),

Legal Division, Board of Gover nors of the Federa l Reserve System, Washington,

D.C. 20551.

SUPPL EMEN TARY INFORMATION: On Mar ch 14, 1980, the Board adopted this

Subp art purs uant to the Cred it Control Act (12 U.S.C. §§ 1901-1909)

as imple mented by Executive Order 12201 to restrain the expansi on of

short term credit through money marke t funds and similar creditors (45

Fe d. Re g. 17930). This Subpar t subsequent ly was amended by the Board

on Mar ch 28, 1980 (45 Fe d. R eg . 23642). Base d upon an eval uat ion of

curren t credit data, the Board has determin ed to decrease the special

depo sit ratio from 15 per cent to 7-1/2 per cen t for all creditors covered

by this Subpart. The de creased ratio will be effective for special

deposits required to be maintained during the maintenance period beginning

June 30, 1980, for the com put ati on period beg inni ng Jun e 16, 1980.

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In order to achieve the objectives of this action more quickly,

the Board for good cause finds that the notice and publi c procedure

pro visi ons of 5 U.S.C. § 553(b) with regard to these actions are impracticable

and cont rary to the public interest.

Pursua nt to its authorit y under the Cred it Contro l Act (12

U.S.C. §§ 1901-1909) the Board hereby amends Subpar t B of its Credi t

Res tra int re gula tion (12 C.F.R. Part 229) e ffec tiv e June 30, 1980, as

follows:

1. In section 229.14(a)(1), by st ri ki ng "15" and inserting

in its plac e "7-1/2".

2. In sec tion 229.14(b), by strik ing "15" and insertin g in

its place "7-1/2".

By order of the Board of Gove rnors of the Federal Reserv e

System, M ay 23, 1980.

(Signed) Theo dore E. All ison

Theodore E. Allison

Secret ary of the Board

[SEAL]

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(Docket No. R-0302)

P AR T 2 29 — C R E DI T R ES T R AI N T

[Subpart C]

Nonmember Com mercial Banks

AGENCY: B oard of Gov ernors of the Federal Reserve System.

ACTION: Final rul e.

SUMMARY: Pur sua nt to the Cre dit Cont rol Act (12 U.S.C. §§ 1901-1909)

as im plemented by Executive Order 12201 the Board adopted provisions

on March 14, 1980, requiring comm ercial banks that are not members of

the Federal Reserve System to maint ain a non-in terest bearing special

depos it with the Federal Reserve equal to 10 per cent of the amount

by which the total of managed liabilities of those banks exceeds the

amount of such manage d liabilities ou tstandin g during a base period.

Based upon an evaluation of recent banking and credit data, the Board

has deter mined to decrease the special deposit ratio from 10 per cent

to 5 per cent and increase, generally, an in stitution 's managed liabiliti es

base.

EFFECTI VE DATE: This amendment will be effective for the special deposit

required to be maintaine d by nonmember commercia l banks for the seven-

day period beginnin g June 12, 1980, for the computation peri od beginning

M a y 29, 1980.

FOR FURT HER INFORMATION CONTACT: Gilbert T. Schwartz, Assistant General

Cou nse l (20 2/452-3625), Paul S. Pilecki, Attorn ey (202 /452-3281), or

Daniel L. Rhoads, Att orney (202/452-3711), Legal Division, Board of

Gove rnors of the Federal Reserve System, Washington, D.C. 20551.

SUPPLE MENTA RY INFORMATION: On March 14, 1980, the Board adopte d this

Subp art pur suan t to the Cre dit Contro l Act (12 U.S.C. §§ 1901-1909)

as impleme nted by Exec utive Order 12201 (45 Fe d. Re g. 17932). This

Subpar t requires commer cial banks that are not members of the Federal

Reserv e System to maint ain a special non-in terest bearing deposit with

the Feder al Reser ve equal to 10 per cent of the total by which man aged

liabiliti es of the nonmember bank exceed ed the amount of such manage d

liabilit ies outstanding during a base period. Additionally, this Subpart

requires a covered bank that was a net borrower of managed liabilit ies

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during the fourtee n-da y base perio d ending Marc h 12, 1980, to reduce

its base by an adju stme nt for the reducti on in its foreign len ding from

domes tic offices. The adjustment for any given computation period is

based on the difference between the sum of its gross loans to non-United

States residents and gross balances due from foreign offices of other

instit utions, and the lowes t gross total of such lending for any comput atio n

week beginni ng after Marc h 19, 1980. That diffe renc e is then rounded

down to the largest lower multipl e of $2 million and s ubtracted from

the dail y averag e of mana ged liabilitie s for the base period. This

Subpart does not apply to United States branches and agencies of foreign

banks with total world-wide consolidated bank assets in excess of $1

b illion that are subject to the Board's marginal reserve requirements

(12 C.F.R. § 204.5(f)). Other United States branches and agencie s of

foreig n banks are subje ct to this Subpart.

Based upon an evaluation of recent banking and credit data,

the Board has determin ed to decrease the special depo sit ratio for banks

subje ct to this Subpart fro m 10 per cent to 5 per cent. The new 5 per

cent depo sit ratio will be effective for special deposits required to

be m aintained for the seven-day period beginning June 12, 1980 . The

corres ponding co mputatio n period is the seven-day period beginning May 29,

1980.

The Board has also determin ed to allow certain covered banks

to make a one-time only increase in their managed liabilities base.

For a cove red bank that was a net borrower of manage d liabiliti es in

excess of $100 millio n on a daily average basis during the fourteen-

day period ending Marc h 12, 1980, its managed liabilities base will

be increased by 7-1/2 per cent. The new base will be determined by

m ul tip lying the bank's base reported on line 8 of form F. R. 2412d for

the com puta tion period beginnin g May 15, 1980, by 1.075. However, a

bank that was a net borrower of managed liabilities during the fourteen-

day per iod endi ng March 12, 1980, wh ose base on Marc h 12, 1980, was

$100 milli on may not incr ease its base.

The managed liabilities base will continue to be reduced in

com put ati on perio ds after May 28, 1980, by the amount by which the bank's

daily average of gross loans to non-United States residents and gross

balances due from foreign offices of other institutions during the statement

week is lower than the lowest daily average am ount of such loans and

balances outstanding during th e base period or any statement week for

the peri od from Marc h 13, 1980 to May 28, 1980. The base for an institu tion

that was a net borrower of mana ged liabil ities d uring the base period

(February 28 - Marc h 12, 1980) will not be reduc ed below $100 million.

The base will not change for a bank that was a net lender

of manag ed liabi litie s durin g the perio d Februa ry 28 - March 12, 1980.

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In order to achieve the objectives of this action more quickly, the Board for good cause finds that the notice, public procedure, and deferral of effective date provisions of 5 U.S.C. § 553(b) with regard to these actions are impracticable and contrary to the public interest.

Pursuant to its authority under the Credit Control Act (12 U.S.C. §§ 1901-1909), the Board hereby amends Subpart C of its Credit

Restraint regulation (12 C.F.R. Part 229) effective June 12, 1980, as

follows:

SECTION 229.24— MAINTENANCE OF SPECIAL DEPOSIT

(a) During the seven-day maintenance period beginning June 12,1980, and each deposit maintenance period thereafter, each covered bankshall maintain a non-interest bearing special deposit equal to 5 percent of the amount by which the daily average of its total managed liabilitiesduring the seven-day computation period ending eight days prior to the beginning of the corresponding seven-day maintenance period exceedsits managed liabilities base as determined in accordance with paragraph (b).* * *

(b) Managed liabilities base. During the seven-day deposit

computation period beginning May 29, 1980, and during each seven-day deposit computation period thereafter, the managed liabilities base of a covered bank shall be determined as follows:

(1) For a covered bank that, on a daily average basis, was a net borrower of total managed liabilities during the fourteen-day base period ending March 12, 1980, its base for the computation period beginning May 29, 1980, shall be equal to its base reported for the computation period beginning

May 15, 1980 (as reported on line 8 of form F.R. 2412d) multiplied by 1.075. However, a covered bank whose base has never exceeded

$100 million shall not multiply its base by 1.075. The managed

liabilities base of a covered bank shall be reduced by the

amount by which its lowest daily average of

3/(A) gross loans to non-United States residents— and

3/ A United States resident is: (a) any individual residing (at thetime the credit is extended) in any State of the United States or the District of Columbia; (b) any corporation, partnership, association or other entity organized therein ("domestic corporation"); and (c)any branch or office located therein of any other entity wherever organized. Credit extended to a foreign branch, office, subsidiary, affiliate or

other foreign establishment ("foreign affiliate") controlled by one or more such domestic corporations will not be deemed to be credit extended

to a United States resident if the proceeds will be used in its foreign business or that of other foreign affiliates of the controlling domestic corporation(s).

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(B) gross balances due from foreign offices of other institutions— or institutions the time deposits of which are exempt from the rate limitations of Regulation Q

pursuant to § 217.3(g) thereof,—

outstanding during any computation period beginning after May 28,1980, is lower than the lowest daily average amount

of such loans and balances outstanding during the base period or any computation period between March 13, 1980 and May 28,

1980. The amount of the reduction shall be rounded down to the largest lower multiple of $2 million. However, in no event will the managed liabilities base for a covered bank that was a net borrower of managed liabilities during the fourteen-day base period ending March 12, 1980, be less than $100 million.

(2) For a covered bank that, on a daily average basis, is a net lender of total managed liabilities during the fourteen- day base period ending March 12, 1980, its managed liabilities base shall be the sum of its daily average negative total

managed liabilities and $100 million.

4/ Any banking office located outside the States of the United Statesand the District of Columbia of a bank organized under domestic or foreignlaw.5/ A foreign central bank, or any international organization, of which the United States is a member, such as the International Bank for Reconstruction and Development (World Bank), International Monetary Fund, Inter-

American Development Bank, and other foreign international, or supranational entities exempt from interest rate limitations under § 217.3(g)(3) of Regulation Q (12 C.F.R. § 217.3(g)(3)).

By order of the Board of Governors of the Federal Reserve System, May 27, 1980.

(Signed) Theodore E. Allison

[SEAL]

Theodore E. Allison Secretary of the Board

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(Docket No. R-0303)

PART 229-CREDIT RESTRAINT

[Subpart D]

Reports Under Special Credit Restraint Program

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Final rule.

SUMMARY: Pursuant to the Credit Control Act (12 U.S.C. §§ 1901-1909)as implemented by Executive Order 12201, under its Special Credit Restraint Program issued on March 14, 1980, the Board has amended its regulation to enable it to reduce the reporting burden on U.S. commercial

banks, and U.S. branches and agencies of foreign banks, finance companies, U.S. bank holding companies, and to discontinue the reporting require ments for large corporate borrowers.

EFFECTIVE DATE: May 27, 1980.

FOR FURTHER INFORMATION CONTACT: Gilbert T. Schwartz, Assistant GeneralCounsel (202/452-3625), Bronwen Mason, Senior Attorney (202/452-3564)Legal Division, or Eleanor J. Stockwell, Senior Deputy Associate Director (202/452-3651), Division of Research and Statistics, Board of Governors of the Federal Reserve System, Washington, D.C. 20551.

SUPPLEMENTARY INFORMATION: On March 14, 1980, the Board announced a Special Credit Restraint Program designed to encourage lenders and

borrowers, in their individual credit decisions, to take specific account of the overall aims and quantitative objectives of the Federal Reserve in restraining growth in money and credit generally. While compliance

with the Program guidelines is on a voluntary basis, the Board instituted a reporting program, as authorized by section 1-104 of Executive Order

12201, to monitor developments in the credit markets and compliance with the Program. Under this reporting program the affected lenders were required to provide data periodically concerning types and amounts of outstanding loans and selected corporations were required to provide data on certain types of borrowing. (45 Fed. Reg. 22883) .

Based on an evaluation of recent banking and credit data, on May 22, 1980, the Board announced that it would reduce the reporting burden on U.S. commercial banks, U.S branches and agencies of foreign banks, finance companies, and U.S. bank holding companies, which

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should now file reports on a bimonthly basis. In addition, the Board

stated that it would discontinue reports by large corporate borrowers.The first quarterly report for intermediate size banks due in June,

will be simplified, and the need for subsequent reports will be evaluated

after that checkpoint is passed.

In order to achieve the objectives of this action more quickly

the Board for good cause has determined that the notice and public

procedure provisions of 5 U.S.C. § 553(b) with regard to this action are not in the public interest, and will not be followed.

Pursuant to its authority under the Credit Control Act (12 U.S.C. §§ 1901-1909) as implemented by Executive Order 12201 the Board

has amended sections 229.33 and 229.34 of Subpart D of its Credit

Restraint Regulation (12 C.F.R. § 229) to read as follows:

SUBPART D - Reports under Special Credit Restraint Program

* * * * *

SECTION 229.33— REPORTS BY LARGE LENDERS(a) Large Commercial banks. Each U.S. commercial bank having

U.S. consolidated assets of $1 billion or more shall file such reports

on its activities as may be required by the Board from time to timeon forms prescribed by the Board in accordance with the instructions

thereto.

(b) U.S. agencies and branches of foreign banks. Each family

of U.S. offices of a foreign bank having worldwide banking assets of

more than $1 billion monthly shall file such reports on its activities

as may be required by the Board from time to time on forms prescribed by the Board in accordance with the instructions thereto.

(c) U.S, bank holding companies. Each U.S. bank holding

company with U.S. consolidated financial assets of $1 billion or more

shall file such reports on its activities as may be required by the

Board from time to time on forms prescribed by the Board in accordance

with the instructions thereto.

(d) U.S. finance companies. Each U.S. finance company with

total business receivables outstanding (that is, all loans excluding

those made for personal, family or household uses) of $1 billion or

more shall file such reports on its activities as may be required by

the Board from time to time on forms prescribed by the Board in accordance with the instructions thereto.

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SECTION 229.34— REPORTS BY INTERMEDIATE-SIZED COMMERCIAL BANKS

Each U.S. commercial bank with U.S. consolidated assets of $300 million or more but less than $1 billion shall file such reports on its activities as may be required by the Board from time to time on forms prescribed by the Board in accordance with the instructions thereto.

Board of Governors of the Federal Reserve System, effective May 27, 1980.

Theodore E. Allison Secretary of the Board

[SEAL]

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