Federal Reserve Act Amendments

(Reported to House from the Committee on Banking, Finance and Urban Affairs with amendment, H. Rept. 95-1590)

Federal Reserve Act Amendments - Amends the Federal Reserve Act to authorize the Board of Governors of the Federal Reserve System to require specified depository institutions to submit to the Board such periodic financial reports as the Board determines to be necessary for it to control and monitor monetary and credit aggregates.

Requires every bank subject to reserve requirements to maintain reserves at the rate of seven percent against the total of its demand deposits, savings deposits, and deposits subject to negotiable orders of withdrawal that exceed $50,000,000. Authorizes the Board to adjust this rate between six and eight percent.

Requires reserves against time deposits with initial maturities of less than 180 days at a rate of six percent, which may be adjusted by the Board at levels between one and six percent.

Requires reserves on time deposits with initial maturities of 180 days or more at the rate of one percent, which may be adjusted by the Board at levels between one and three percent.

Preempts State reserve requirements for member banks and banks with required reserves greater than zero.

Imposes reserve requirements on the sum of time deposits that exceed $50,000,000, requiring the $50,000,000 exemption to be apportioned between time deposits.

Requires the Board to determine each year the level of the total of demand, savings, negotiable order of withdrawal and time deposits that will be subject to reserve requirements provided the proportions established for banks whose reserve requirements are greater than zero do not exceed the proportions of such totals on June 30, 1970.

Subjects to reserve requirements any bank that is either an insured bank or is eligible to apply to become an insured bank under the Federal Deposit Insurance Act. Exempts savings and mutual savings banks as defined in such Act from reserve requirements.

Authorizes the Board to establish additional reserve requirements against: (1) net balances owed by domestic offices of banks in the United States to foreign offices or banks; and (2) loans to United States residents made by overseas offices of banks with offices in the United States.

Grants certain privileges of member banks of the Federal Reserve System to non-member banks maintaining reserves required by this Act.

Authorizes the imposition of reserve requirements exceeding the limits imposed by this Act for 30-day periods upon a finding that extraordinary circumstances require such action by at least five members of the Board after consultation with the appropriate committees of Congress.

Provides a four year transition period for nonmember banks to implement the reserve requirements imposed by this Act. Extends a similar transition period to member banks in meeting requirements that exceed those in effect immediately prior to July 1, 1979.

Requires the Board to implement the reserve requirements imposed by this Act for member banks within two years.

Requires that reserves be maintained in the form of balances at a Federal Reserve Bank or as vault cash as determined by regulation or order of the Board, provided such requirements are identical for all banks. Permits reserve balances to be maintained by a nonmember bank in member or nonmember banks that maintain reserve balances at a Federal Reserve bank, provided such banks pass the balances to a Federal Reserve bank. Exempts such funds from reserve requirements and Federal Deposit Insurance assessments.

Directs the Board to study the following: (1) the Federal funds market; (2) the feasibility of permitting member banks to invest a percentage of their required reserves in United States Treasury securities; (3) the repeal of the prohibition against the payment of interest on demand deposits; (4) the feasibility of imposing reserve requirements on transaction accounts at thrift institutions; and (5) the use of savings deposits at commercial banks for transaction purposes via prearranged transfers to demand accounts.

Directs the Board to prepare and publish a schedule of fees for its services and a set of pricing principles by July 1, 1979.

Authorizes any Federal Reserve bank to pay interest on the required reserve balances held in such banks, subject to a veto by either House of Congress.