WASHINGTON — The Federal Reserve Board announced last Wednesday the annual indexing of the reserve requirement exemption amounts for 2007.
Credit unions and other depository institutions must hold a percentage of certain types of deposits as reserves in the form of vault cash, as a deposit in a Federal Reserve Bank, or as a deposit in a pass-through account at a correspondent institution. Reserve requirements currently are assessed on the depository institution's net transaction accounts, namely checking.
For 2007, the first $8.5 million in net transaction accounts are exempt, up from $7.8 million in 2006. A 3% reserve ratio will be assessed on net transaction accounts over $8.5 million up to and including $45.8 million, down from $48.3 million in 2006. The reserve ratio on these accounts exceeding $45.8 million will be 10%.
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