Record of Policy Actions of the Board of Governors
Policy actions of the Board of Governors are presented pursuant to section 10 of the Federal Reserve Act. That section provides that the Board shall keep a record of all questions of policy determined by the Board and shall include in its annual report to Congress a full account of such actions. This appendix provides a summary of policy actions in 2023. Policy actions were implemented through (1) rules and regulations, (2) policy statements and other actions, and (3) discount rates for depository institutions. Board members' votes on the policy actions are provided after each summary.1 More information on the actions is available from the relevant Federal Register notices or other documents (see links in footnotes) or on request from the Board's Freedom of Information Office. This appendix also provides information on the Board and the Government Performance and Results Act.
For more information on the Federal Open Market Committee's (FOMC's) policy actions relating to open market operations, see Appendix B, "Minutes of Federal Open Market Committee Meetings."
Rules and Regulations
Regulations Q (Capital Adequacy of Bank Holding Companies, Savings and Loan Holding Companies, and State Member Banks), LL (Savings and Loan Holding Companies), and YY (Enhanced Prudential Standards)
Effective January 1, 2024. On September 13, 2023, the Board approved a final rule (Docket No. R-1673) to adopt risk-based capital requirements for depository institution holding companies that are significantly engaged in insurance activities.2 This risk-based capital framework, termed the Building Block Approach, adjusts and aggregates existing legal-entity capital requirements to determine enterprisewide capital requirements. The final rule also contains a risk-based capital requirement excluding insurance activities, in compliance with section 171 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The capital requirements meet statutory mandates and will help to prevent the economic and consumer impacts resulting from the failure of organizations engaged in banking and insurance.
Voting for this action: Chair Powell, Vice Chair Jefferson, Vice Chair for Supervision Barr, and Governors Bowman, Waller, and Cook.
Regulation BB (Community Reinvestment)
Effective April 1, 2024 (with certain provisions not applicable until 2026 or 2027).3 On October 24, 2023, the Board approved a final rule (Docket No. R-1769), issued jointly with the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) (together with the Board, the agencies), to strengthen and modernize the regulations implementing the Community Reinvestment Act (CRA). The CRA requires the agencies to assess a bank's record of meeting the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with the bank's safe and sound operation. Among other key features, the final rule (1) establishes a tiered CRA evaluation framework that differentiates requirements by bank asset size and business model, (2) adopts a new metrics-based approach to evaluating bank retail lending and community development financing using benchmarks based on peer and demographic data, (3) modernizes the geographic framework to consider a bank's activities outside of its traditional branch-based assessment areas, and (4) clarifies the activities that qualify for community development consideration. (Note: On March 20, 2024, the Board approved a combined interim final and final rule (Docket No. R-1830), issued jointly with the FDIC and OCC, to extend the applicability date of certain provisions of the October 2023 final rule and make certain technical amendments to the October 2023 final rule and related regulations.4)
Voting for this action: Chair Powell, Vice Chair Jefferson, Vice Chair for Supervision Barr, and Governors Waller, Cook, and Kugler. Voting against this action: Governor Bowman.
Rules of Practice and Procedure
Effective April 1, 2024.On November 9, 2023, the Board approved a final rule (Docket No. R-1766), issued jointly with the FDIC, the OCC, and the National Credit Union Administration (NCUA), to adopt changes to the Uniform Rules of Practice and Procedure to recognize the use of electronic communications in all aspects of administrative hearings and to otherwise increase the efficiency and fairness of administrative adjudications.5 In addition, the Board made updates to rules applicable only to its administrative proceedings.
Voting for this action: Chair Powell, Vice Chair Jefferson, Vice Chair for Supervision Barr, and Governors Bowman, Waller, Cook, and Kugler.
Policy Statements and Other Actions
Allowances for Credit Losses
On April 13, 2023, the Board approved a final interagency policy statement (Docket No. OP-1680) (statement) on allowances for credit losses.6 The revised statement, published jointly with the FDIC, the OCC, and the NCUA, removes references to Troubled Debt Restructurings (TDRs). The revised statement was developed after changes were made to U.S. generally accepted accounting principles that eliminated TDRs upon adoption of the Current Expected Credit Losses methodology.
Voting for this action: Chair Powell, Vice Chair for Supervision Barr, and Governors Bowman, Waller, Cook, and Jefferson.
Commercial Real Estate Loan Accommodations and Workouts
On June 23, 2023, the Board approved a final policy statement (Docket No. OP-1779), published jointly with the OCC, the FDIC, and the NCUA, to reinforce and build on existing guidance calling for financial institutions to work prudently and constructively with creditworthy borrowers during times of financial stress, to update that guidance's provisions on commercial real estate loan workouts, and to add a section on short-term loan accommodations to that guidance.7
Voting for this action: Chair Powell, Vice Chair for Supervision Barr, and Governors Bowman, Waller, Cook, and Jefferson.
Policy Statement on Section 9(13) of the Federal Reserve Act
On January 27, 2023, the Board approved a policy statement (Docket No. R-1800) interpreting section 9(13) of the Federal Reserve Act.8 The Board generally believes that the same bank activity, presenting the same risks, should be subject to the same regulatory framework, regardless of which agency supervises the bank. The policy statement sets out a presumption that the Board will generally exercise its discretion under section 9(13) to limit the activities of state member banks to those permissible for national banks—subject to any terms, conditions, and limitations on the activity—unless the activity is otherwise authorized by federal statute or the FDIC. The policy statement makes clear that all Board-supervised banks will be subject to the same limitations on activities, including novel banking activities, such as crypto-asset-related activities. In addition, the policy statement reiterates that banks must ensure that the activities they engage in are allowed under the law and must conduct their business in a safe and sound manner. For instance, a bank should have in place risk-management processes, internal controls, and information systems that are appropriate and adequate for the nature, scope, and risks of its activities.
Voting for this action: Chair Powell, Vice Chair Brainard, Vice Chair for Supervision Barr, and Governors Bowman, Waller, Cook, and Jefferson.
Principles for Climate-Related Financial Risk Management
On October 22, 2023, the Board approved final interagency guidance (Docket No. OP-1793) on principles for climate-related financial risk management for large financial institutions.9 The principles, issued jointly with the FDIC and the OCC, provide a high-level framework for the safe and sound management of exposures to climate-related financial risks. The principles, which address physical and transition risks associated with climate change, are intended for the largest financial institutions, those with more than $100 billion in total consolidated assets.
Voting for this action: Chair Powell, Vice Chair Jefferson, Vice Chair for Supervision Barr, and Governors Cook and Kugler. Voting against this action: Governors Bowman and Waller.
Systemic Risk Exception and Bank Term Funding Program
On March 12, 2023, the Board approved two actions against the backdrop of substantial stress in the U.S. banking system following the failures of Silicon Valley Bank (SVB) and Signature Bank (Signature): (1) written recommendations to the Secretary of the Treasury to invoke the systemic risk exception to the least-cost-resolution requirements in the Federal Deposit Insurance Act (FDI Act) and (2) authorization of the establishment of the Bank Term Funding Program (BTFP), a new emergency lending facility, pursuant to section 13(3) of the Federal Reserve Act (FRA).10
Systemic Risk Exception: The FDIC was appointed receiver of SVB on March 10, 2023, and of Signature on March 12, 2023, following large and rapid deposit runs at each bank. Under the FDI Act, the FDIC is generally required to resolve failed depository institutions in a manner that is least costly to the Deposit Insurance Fund. Given the potential for serious adverse effects on economic conditions and financial stability, the Board recommended invoking the systemic risk exception to the FDIC's least-cost-resolution requirements for the SVB and Signature receiverships.
Bank Term Funding Program: Under section 13(3) of the FRA, in unusual and exigent circumstances and with the prior approval of the Secretary of the Treasury, the Board may authorize a Federal Reserve Bank to extend credit to any participant in a program or facility with broad-based eligibility. This section 13(3) authority is subject to limitations, including a prohibition on lending to entities that are insolvent and a requirement that the relevant Federal Reserve Bank be secured to its satisfaction.
To support American businesses and households, the Board authorized the establishment of the BTFP to make available additional funding to help ensure banks have the ability to meet the needs of all their depositors. Under the BTFP, U.S. federally regulated depository institutions and U.S. branches and agencies of foreign banks eligible for primary credit are able to obtain advances of up to one year by pledging any collateral eligible for purchase by the Federal Reserve in open market operations, such as U.S. Treasuries, U.S. agency securities, and U.S. agency mortgage-backed securities, provided that such collateral was owned by the borrower as of March 12, 2023. Collateral was valued at par, and the interest rate on the advances, which is fixed for the term of the advance on the day the advance was made, was set to the one-year overnight index swap rate plus 10 basis points. (Note: On January 23, 2024, the Board approved a modification to the interest rate applicable to new BTFP loans such that the BTFP rate would not be lower than the interest on reserve balances rate in effect on the day the loan was made. The Board also announced that the BTFP would cease making new loans on March 11, 2024, as scheduled.11)
Voting for these actions: Chair Powell, Vice Chair for Supervision Barr, and Governors Bowman, Waller, Cook, and Jefferson.
Third-Party Risk Management
On June 5, 2023, the Board approved final interagency guidance (Docket No. OP-1752) on third-party risk management.12 Issued jointly with the FDIC and the OCC, the guidance will promote consistency in supervisory approaches and replace each agency's existing general guidance on this topic. The guidance includes illustrative examples and provides views on sound risk-management principles for banking organizations to use when developing and implementing risk management practices for all stages in the life cycle of their third-party relationships. The final guidance states that sound third-party risk management takes into account the level of risk, complexity, and size of the banking organization and the nature of the third-party relationship.
Voting for this action: Chair Powell, Vice Chair for Supervision Barr, and Governors Waller, Cook, and Jefferson. Voting against this action: Governor Bowman.
Interest on Reserves
On February 1, 2023, the Board approved raising the interest rate paid on reserve balances from 4.4 percent to 4.65 percent, effective February 2, 2023.13 This action was taken to support the FOMC's decision on February 1, 2023, to raise the target range for the federal funds rate by 25 basis points, to a range of 4-1/2 to 4-3/4 percent.
Voting for this action: Chair Powell, Vice Chair Brainard, Vice Chair for Supervision Barr, and Governors Bowman, Waller, Cook, and Jefferson.
On March 22, 2023, the Board approved raising the interest rate paid on reserve balances from 4.65 percent to 4.9 percent, effective March 23, 2023.14 This action was taken to support the FOMC's decision on March 22, 2023, to raise the target range for the federal funds rate by 25 basis points, to a range of 4-3/4 to 5 percent.
Voting for this action: Chair Powell, Vice Chair for Supervision Barr, and Governors Bowman, Waller, Cook, and Jefferson.
On May 3, 2023, the Board approved raising the interest rate paid on reserve balances from 4.9 percent to 5.15 percent, effective May 4, 2023.15 This action was taken to support the FOMC's decision on May 3, 2023, to raise the target range for the federal funds rate by 25 basis points, to a range of 5 to 5-1/4 percent.
Voting for this action: Chair Powell, Vice Chair for Supervision Barr, and Governors Bowman, Waller, Cook, and Jefferson.
On June 14, 2023, the Board approved maintaining the interest rate paid on reserve balances at 5.15 percent, effective June 15, 2023.16 This action was taken to support the FOMC's decision on June 14, 2023, to maintain the target range for the federal funds rate at 5 to 5-1/4 percent.
Voting for this action: Chair Powell, Vice Chair for Supervision Barr, and Governors Bowman, Waller, Cook, and Jefferson.
On July 26, 2023, the Board approved raising the interest rate paid on reserve balances from 5.15 percent to 5.4 percent, effective July 27, 2023.17 This action was taken to support the FOMC's decision on July 26, 2023, to raise the target range for the federal funds rate by 25 basis points, to a range of 5-1/4 to 5-1/2 percent.
Voting for this action: Chair Powell, Vice Chair for Supervision Barr, and Governors Bowman, Waller, Cook, and Jefferson.
On September 20, 2023, the Board approved maintaining the interest rate paid on reserve balances at 5.4 percent, effective September 21, 2023.18 This action was taken to support the FOMC's decision on September 20, 2023, to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent.
Voting for this action: Chair Powell, Vice Chair Jefferson, Vice Chair for Supervision Barr, and Governors Bowman, Waller, Cook, and Kugler.
On November 1, 2023, the Board approved maintaining the interest rate paid on reserve balances at 5.4 percent, effective November 2, 2023.19 This action was taken to support the FOMC's
decision on November 1, 2023, to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent.
Voting for this action: Chair Powell, Vice Chair Jefferson, Vice Chair for Supervision Barr, and Governors Bowman, Waller, Cook, and Kugler.
On December 13, 2023, the Board approved maintaining the interest rate paid on reserve balances at 5.4 percent, effective December 14, 2023.20 This action was taken to support the FOMC's decision on December 13, 2023, to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent.
Voting for this action: Chair Powell, Vice Chair Jefferson, Vice Chair for Supervision Barr, and Governors Bowman, Waller, Cook, and Kugler.
Discount Rates for Depository Institutions in 2023
Under the Federal Reserve Act, the boards of directors of the Federal Reserve Banks must establish rates on discount window loans to depository institutions at least every 14 days, subject to review and determination by the Board of Governors. Therefore, about every two weeks the Board considers proposals by the Reserve Banks for the level of the primary credit rate and for the formulas used to compute the secondary and seasonal credit rates.21 For the levels of Federal Reserve Bank interest rates on loans to depository institutions at year-end, see table E.1.22
Table E.1. Federal Reserve Bank interest rates on loans to depository institutions, December 31, 2023
Percent
| Reserve Bank | Primary credit | Secondary credit | Seasonal credit |
|---|---|---|---|
| All Reserve Banks | 5.50 | 6.00 | 5.35 |
Primary, Secondary, and Seasonal Credit
Primary credit, the Federal Reserve's main lending program for depository institutions, is extended at the primary credit rate. It is made available, with minimal administration, as a source of liquidity to depository institutions that, in the judgment of the lending Federal Reserve Bank, are in generally sound financial condition. During 2023, the Board approved four increases in the primary credit rate, bringing the rate from 4-1/2 percent to 5-1/2 percent.
Following changes to the primary credit program announced by the Board on March 15, 2020, in 2023, depository institutions could borrow primary credit for periods as long as 90 days, prepayable and renewable by the borrower on a daily basis.23
Secondary credit is available in appropriate circumstances to depository institutions that do not qualify for primary credit. The secondary credit rate is set at a spread above the primary credit rate. Throughout 2023, the spread was set at 50 basis points. At year-end, the secondary credit rate was 6 percent.
Seasonal credit is available to smaller depository institutions to meet liquidity needs that arise from regular swings in their loans and deposits. The rate on seasonal credit is calculated every two weeks as an average of selected money market yields, typically resulting in a rate close to the target range for the federal funds rate. At year-end, the seasonal credit rate was 5.35 percent.
Votes on Changes to Discount Rates for Depository Institutions
During 2023, there were four increases in the primary credit rate, and the Board approved proposals by the Reserve Banks to renew the formulas used to compute the secondary and seasonal credit rates. Each FOMC meeting associated with a change in the primary credit rate is listed below with the details of the Board's actions to approve those changes. Reserve Bank requests to establish the primary credit rate may be submitted on varying dates, up to and including the effective date.
FOMC meeting ending on February 1, 2023. At the meeting, the Board approved actions taken by the boards of directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Richmond, Atlanta, Chicago, Kansas City, Dallas, and San Francisco to increase the primary credit rate from 4-1/2 percent to 4-3/4 percent, effective February 2, 2023. After the meeting and before the close of business on the effective date, the Board approved identical actions taken by the boards of directors of the Federal Reserve Banks of Cleveland, St. Louis, and Minneapolis, effective February 2, 2023.
Voting for this action: Chair Powell, Vice Chair Brainard, Vice Chair for Supervision Barr, and Governors Bowman, Waller, Cook, and Jefferson.
FOMC meeting ending on March 22, 2023. At the meeting, the Board approved actions taken by the boards of directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Richmond, Atlanta, Kansas City, Dallas, and San Francisco to increase the primary credit rate from 4-3/4 percent to 5 percent, effective March 23, 2023. After the meeting and before the close of business on the effective date, the Board approved identical actions taken by the boards of directors of the Federal Reserve Banks of Cleveland, Chicago, St. Louis, and Minneapolis, effective March 23, 2023.
Voting for this action: Chair Powell, Vice Chair for Supervision Barr, and Governors Bowman, Waller, Cook, and Jefferson.
FOMC meeting ending on May 3, 2023. At the meeting, the Board approved actions taken by the boards of directors of the Federal Reserve Banks of Boston, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco to increase the primary credit rate from 5 percent to 5-1/4 percent, effective May 4, 2023 .After the meeting and before the close of business on the effective date, the Board approved an identical action taken by the board of directors of the Federal Reserve Bank of New York, effective May 4, 2023.
Voting for this action: Chair Powell, Vice Chair for Supervision Barr, and Governors Bowman, Waller, Cook, and Jefferson.
FOMC meeting ending on July 26, 2023. At the meeting, the Board approved actions taken by the boards of directors of the Federal Reserve Banks of Boston, Philadelphia, Cleveland, Richmond, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco to increase the primary credit rate from 5-1/4 percent to 5-1/2 percent, effective July 27, 2023. After the meeting and before the close of business on the effective date, the Board approved identical actions taken by the boards of directors of the Federal Reserve Banks of New York and Atlanta, effective July 27, 2023.
Voting for this action: Chair Powell, Vice Chair for Supervision Barr, and Governors Bowman, Waller, Cook, and Jefferson.
The Board of Governors and the Government Performance and Results Act
Overview
The Government Performance and Results Act (GPRA) of 1993, as amended by the GPRA Modernization Act of 2010, requires federal agencies to prepare a strategic plan covering a multiyear period and to submit an annual performance plan and an annual performance report. Although the Board is not covered by GPRA, the Board voluntarily complies with the spirit of GPRA and, like other federal agencies, publishes a multiyear strategic plan as well as an annual performance plan and an annual performance report. These reports are publicly available among the Board's publications.24
Four-year Strategic Plan, Annual Performance Plan, and Annual Performance Report
On December 27, 2019, the Board published the Strategic Plan 2020–23, which outlined the organization's priorities across five functional areas—Monetary Policy and Financial Stability, Supervision, Payment System and Reserve Bank Oversight, Public Engagement and Community Development, and Mission Enablement. In formulating the Strategic Plan 2020–23, the Board identified and prioritized the goals and objectives paramount to advancing the organization's mission while allowing for appropriate flexibility to respond to emerging and evolving challenges.
The Annual Performance Plan sets forth the projects and initiatives in support of the Board's Strategic Plan's goals and objectives during a one-year period. The Annual Performance Plan helps the organization identify and prioritize investments and dedicate sufficient resources across the five functions to meet its mission-critical work, while maintaining ongoing operations.
The Annual Performance Report summarizes the Board's accomplishments throughout the performance year toward achieving the projects and initiatives identified in that year's Annual Performance Plan. The Annual Performance Report provides transparency into the organization's high-priority activities.
Ultimately, the organization's planning and performance reporting processes enable the Board to identify, prioritize, and progress those activities most critical to advancing the organization's work and communicate this to the public.
Footnotes
1. Vice Chair Brainard resigned effective February 18, 2023. Governor Jefferson was sworn in as Vice Chair, and Governor Kugler was sworn in as a member of the Board, on September 13, 2023. Return to text
2. See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2023-11-27/pdf/2023-23911.pdf. Return to text
3. See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2024-02-01/pdf/2023-25797.pdf, which also provides information on the applicability dates for various provisions. Return to text
4. See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2024-03-29/pdf/2024-06497.pdf. Return to text
5. See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2023-12-28/pdf/2023-25646.pdf. Return to text
6. See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2023-04-27/pdf/2023-08876.pdf. Return to text
7. See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2023-07-06/pdf/2023-14247.pdf. Return to text
8. See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2023-02-07/pdf/2023-02192.pdf. Return to text
9. See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2023-10-30/pdf/2023-23844.pdf. Return to text
10. See press releases at https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312b.htm and https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312a.htm. Return to text
11. See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20240124a.htm. Return to text
12. See Federal Register notice at https://www.govinfo.gov/content/pkg/FR-2023-06-09/pdf/2023-12340.pdf. Return to text
13. See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20230201a1.htm. Return to text
14. See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20230322a1.htm. Return to text
15. See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20230503a1.htm. Return to text
16. See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20230614a1.htm. Return to text
17. See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20230726a1.htm. Return to text
18. See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20230920a1.htm. Return to text
19. See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20231101a1.htm. Return to text
20. See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20231213a1.htm. Return to text
21. See the minutes of the Board of Governors discount rate meetings at https://www.federalreserve.gov/monetarypolicy/discountrate.htm. Return to text
22. For current and historical discount rates, see https://www.frbdiscountwindow.org. Return to text
23. See press release at https://www.federalreserve.gov/newsevents/pressreleases/monetary20200315b.htm. Return to text
24. The Strategic Plan, Annual Performance Plan, and Annual Performance Report are available on the Federal Reserve Board's website at https://www.federalreserve.gov/publications/gpra.htm. Return to text