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%.
Recommended For You
Reserves can be held as vault cash, a deposit at a Federal Reserve Bank or in a pass-through account at a correspondent institution.
The Financial Services Regulatory Relief Act recently authorized the Fed to pay interest on Reg D reserves beginning in 2012; for now, these deposits are considered sterile.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
