FRA_20170922_omb

Supporting Statement for the
Reporting Requirements Associated with Regulation A
(FR A; OMB No. 7100-NEW)
Extensions of Credit by Federal Reserve Banks
(Docket No. R-1476) (RIN 7100-AE08)
Summary
The Board of Governors of the Federal Reserve System (Board), under delegated
authority from the Office of Management and Budget (OMB), proposes to implement the
Reporting Requirements Associated with Regulation A (FR A; OMB No. 7100-NEW). The
Board adopted amendments to Regulation A - Extensions of Credit by Federal Reserve Banks to
implement the emergency lending authorities provided under the 3rd undesignated paragraph of
section 13 of the Federal Reserve Act (FRA) as amended by sections 1101 and 1103 of the
Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act). These
provisions of the Dodd-Frank Act require the Board, in consultation with the Secretary of the
Treasury, to establish by regulation policies and procedures with respect to emergency lending
under section 13(3) of the FRA. The reporting requirements are found in section
201.4(d)(5)(iv)(A). The annual burden for the FR A is estimated to be 50 hours. There are no
required reporting forms associated with this information collection.
Background and Justification
On December 23, 2013, the Board proposed amendments to Regulation A to implement
sections 1101 and 1103 of the Dodd-Frank Act.1 The purpose of the proposed amendments was
to implement the Dodd-Frank Act revisions to the Board’s emergency lending authority in
section 13(3) of the Federal Reserve Act that limit the use of this authority to the provision of
liquidity through broadly-based facilities for solvent firms in a time of crisis.
Prior to the enactment of the Dodd-Frank Act, section 13(3) provided that the Board may
authorize a Federal Reserve Bank to extend credit to any individual, partnership, or corporation
subject to four principal conditions. These conditions required that (1) credit be extended only in
unusual and exigent circumstances, (2) credit be extended only if the Board authorizes the
lending by the affirmative vote of at least five of its members, (3) the lending Federal Reserve
Bank obtain evidence before extending the credit that the borrower is unable to secure adequate
credit from other banking institutions, and (4) the extension of credit be indorsed or otherwise
secured to the satisfaction of the Federal Reserve Bank. This statutory authority to extend
emergency credit to any person in unusual and exigent circumstances was enacted by Congress
in 1932 to enable the Federal Reserve, as the nation’s central bank, to provide liquidity in times
of financial stress.
Effective on July 21, 2010, the Dodd-Frank Act amended section 13(3) to limit this
emergency lending authority to broad-based programs and facilities that relieve liquidity
pressures in financial markets. To accomplish this, the Dodd-Frank Act amended section 13(3)
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Public Law 111-203, 124 Stat 1376 (2010).

to remove the general authority to lend to an individual, partnership, or corporation and to
replace that general authority with the limited authority to extend emergency credit only to
participants in a program or facility with broad-based eligibility designed for the purpose of
providing liquidity to the financial system. In addition, the amendments to section 13(3) provide
that a program or facility that is structured to remove assets from the balance sheet of a single
and specific company, or that is established for the purpose of assisting a single and specific
company avoid bankruptcy or resolution under a Federal or State insolvency proceeding would
not be considered a program or facility with broad-based eligibility. The Dodd-Frank Act also
prohibits lending under section 13(3) to insolvent borrowers, and requires that the Board
establish policies and procedures that assign a value to all collateral for an emergency loan and
that are designed to ensure that the collateral is sufficient to protect taxpayers from losses.
Moreover, section 13(3) was amended to provide that a program or facility may not be
established without the prior approval of the Secretary of the Treasury. The Dodd-Frank Act
also imposed certain publication and congressional reporting requirements regarding lending
under section 13(3).
Description of Information Collection
The reporting requirements are found in section 201.4(d)(5)(iv)(A). Section
201.4(d)(5)(iv)(A) provides that a Federal Reserve Bank may rely on a written certification from
the person or from the chief executive officer or other authorized officer of the entity, at the time
the person or entity initially borrows under the program or facility, that the person or entity is not
in bankruptcy, resolution under Title II of Public Law 111-203 (12 U.S.C. 5381 et seq.) or any
other Federal or State insolvency proceeding, and has not failed to generally pay its undisputed
debts as they become due during the 90 days preceding the date of borrowing under the program
or facility, and is not borrowing for the purpose of lending the proceeds of the loan to a person or
entity that is insolvent. No other federal law mandates these reporting requirements.
Time Schedule for Information Collection
The information collection is event driven based on when the person or entity initially
borrows under the program or facility.
Legal Status
The Board’s Legal Division has determined that the FR A is authorized by section 11 of
the Federal Reserve Act (12 U.S.C. 248(i)-(j) and (s)) and sections 1101 and 1103 of the DoddFrank Act (12 U.S.C. 343 and 225(b)). The obligation to respond is required to obtain a benefit.
The data are regarded as confidential under the Freedom of Information Act (5 U.S.C.
552(b)(4)).
Consultation Outside the Agency
On January 6, 2014, the Board published a notice of proposed rulemaking in the Federal
Register (79 FR 615) for public comment. The comment period for this notice expired on
March 7, 2014. The Board indicated in the proposed rule that the reporting requirements

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associated with the Regulation A would be minimal and no Paperwork Reduction Act (PRA)
burden was taken. The Board received no comments on this aspect of the proposal. However,
based on the comments received for clarifying the proposed rule to prohibit solvent firms from
passing the proceeds of emergency loans on to insolvent firms and adopting a broader definition
of insolvency, the Board will take reporting burden for this section. On December 18, 2015, the
Board published a final rule in the Federal Register (80 FR 78959). The final rule is effective on
January 1, 2016.
Estimate of Respondent Burden
The annual burden for the FR A is estimated to be 50 hours. The Board is not currently
aware of any respondents, but for purposes of the PRA the Board will assume 10 respondents.
The estimated average hours per response is 5 hours. The FR A reporting requirements represent
less than 1 percent of the total Federal Reserve System paperwork burden.

FR A
Reporting
Section 201.4(d)(5)(iv)(A)

Number of
respondents2

Annual
frequency

Estimated
average hours
per response

10

1

5

Estimated
annual burden
hours
50

The total cost to the public is estimated to be $2,745 for the FR A.3
Sensitive Questions
This collection of information contains no questions of a sensitive nature, as defined by
OMB guidelines.
Estimate of Cost to the Federal Reserve System
The cost to the Federal Reserve System is negligible.

2

Of these respondents, none are considered small entities as defined by the Small Business Administration (i.e.,
entities with less than $550 million in total assets) www.sba.gov/contracting/getting-started-contractor/make-sureyou-meet-sba-size-standards/table-small-business-size-standards.
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Total cost to the public was estimated using the following formula: percent of staff time, multiplied by annual
burden hours, multiplied by hourly rates (30% Office & Administrative Support at $18, 45% Financial Managers at
$67, 15% Lawyers at $67, and 10% Chief Executives at $93). Hourly rates for each occupational group are the
(rounded) mean hourly wages from the Bureau of Labor and Statistics (BLS), Occupational Employment and Wages
May 2016, published March 31, 2017, www.bls.gov/news.release/ocwage.nr0.htm. Occupations are defined using
the BLS Occupational Classification System, www.bls.gov/soc/

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