The Clearing House Association filed a comment letter with the FRB on its proposal to simplify the administration of reserve requirements. TCH supports the common two-week reserve maintenance period and has no objection to the introduction of a penalty-free band to replace the current carryover procedure, but believes that the penalty-free band should be set at the greater of $50,000 or 4% of a bank’s total reserve requirement. In addition, TCH has no objection to the elimination of the clearing balance program or replacing as-of adjustments with direct compensation, so long as the Federal Reserve continues to pay interest on reserves at the effective fed funds rate.