• Home - The Federal Reserve has Eliminated the Contractual Clearing Balance Program Effective July 12, 2012

The Federal Reserve has Eliminated the Contractual Clearing Balance Program Effective July 12, 2012

Reserves administration was simplified in order to reduce burden on depository institutions and the Federal Reserve. Four simplifications are being implemented in a phased transition. Effective July 12, 2012, the contractual clearing balance program was be eliminated.

Implementation of Eliminating the Contractual Clearing Balance Program

Effective July 12, 2012, the contractual clearing balance program was eliminated. No action was required by institutions to terminate their contractual clearing balance agreements. The last day on which clearing balances generated earnings credits was July 11, 2012. Unused earnings credits will expire 52 weeks from their issuance, in accordance with current policy.

Upon termination of all contractual clearing balance agreements, institutions eligible to receive interest on their balances in Reserve Bank accounts will continue to earn interest on the excess balances they maintain.

Please note: An ineligible institution that acts as a pass-through correspondent will continue to receive interest on balances maintained in the pass-through account on behalf of eligible respondent institutions, but the interest paid is required to be passed back by the correspondent to its respondents.

More Information

The links below provide more information about the elimination of the contractual clearing balance program:

Questions?

Please contact your Reserves Central District Contact with questions about reserves administration enhancements.

Top of Page