Federal Reserve Adopts Amendments to Regulation D

On June 4, 2021, the Federal Register published the Board of Governors of the Federal Reserve System’s (“Board”) adoption of amendments to Regulation D (Reserve Requirements of Depository Institutions). These amendments, among other things, eliminate references to certain rates, in particular the “interest on required reserves” rate and the “interest on excess reserves” rate; these are replaced with a reference to a single “interest on reserve balances” rate. Additionally, with respect to balances maintained by or on behalf of eligible institutions in master accounts at Federal Reserve Banks, the amendments simplify the formula used to calculate the amount of interest paid on such balances.  

The Board adopted the final rule as proposed without change given the lack of comments addressing the issues delineated in the amendments. The final rule will become effective on July 29, 2021.