The Federal Reserve has proposed amendments to the provisions of its Policy on Payment System Risk (the “PSR Policy”) relating to the establishment of “net debit caps” – i.e., the maximum amount of uncollateralized daylight overdrafts that an institution can incur in its Federal Reserve account – for U.S. branches and agencies of foreign banking organizations. The proposed amendments would remove from the PSR Policy all references to the Strength of Support Assessment, or “SOSA”, rankings the Federal Reserve has assigned to foreign banking organizations. The proposal is related to the Federal Reserve’s decision to eliminate the SOSA for all purposes. The proposal would also remove references to the "financial holding company" status of a foreign banking organization as a factor in determining a net debit cap, and make other conforming and simplifying changes. While the changes will result in reductions in net debit caps for a number of organizations, the Federal Reserve asserts that these changes will not have a significant practical impact. In support of this assertion, the Federal Reserve observed that the affected institutions generally have not incurred overdrafts that would exceed their new net debit caps, including during the 2007-2009 financial crisis. Further, the Federal Reserve believes that the affected institutions would generally be able to obtain increased overdraft capacity through the pledge of collateral. Comments on the proposal will be due 60 days after the proposal is published in the Federal Register.