Federal Reserve Bank’s request. Depository institutions should contact the Federal Reserve Bank in
whose District they are located to determine whether additional documentation is necessary and for
detailed information on the documentation requirements. For contact information for each District,
visit https://www.frbdiscountwindow.org/Pages/Select-Your-District
.
C.
Collateral
C.1.
What is eligible collateral?
Eligible collateral includes any collateral that (i) is eligible for purchase by the Federal Reserve Banks in
open market operations (see 12 CFR 201.108(b)), and (ii) was owned by the borrower as of March 12,
2023.
C.2.
How does the requirement for a borrower to have owned a security “as of March
12, 2023” apply to banks that merge after that date? How does it apply to
acquisitions of securities portfolios?
(Added 3/16/2023)
In the context of depository institution mergers, the institution that results from the merger (the
“resulting institution”) is typically considered to be a continuation of both the merger parties. In the
case of the Program, if two federally insured depository institutions merge and the resulting institution
is an eligible borrower, the assets of the resulting institution would be eligible collateral if the assets
(i) are eligible for purchase by the Federal Reserve Banks in open market operations and (ii) were owned
by either merger party as of March 12, 2023. The same is true with respect to mergers involving U.S.
branches and agencies of foreign banks and another eligible borrower.
Similarly, if a federally insured depository institution or U.S. branch or agency that is an eligible
borrower (“purchaser”) acquires all or substantially all the assets of an “assumed institution,” the assets
of the purchaser would be eligible collateral if they (i) are eligible for purchase by the Federal Reserve
Banks in open market operations and (ii) were owned by either the purchaser or an assumed institution
as of March 12, 2023. For purposes of this FAQ, an "assumed institution" is limited to a federally insured
depository institution (which term collectively includes the federally insured depository institution, any
bridge entity established by the FDIC in connection with the receivership of the institution, and the
receivership estate of the institution or the bridge entity) or a U.S. branch or agency of a foreign bank.
If an eligible borrower purchases particular assets, or a portfolio of assets, from another institution after
March 12, 2023, those assets are not eligible collateral for purposes of the Program.
C.3.
What are some examples of types of eligible collateral? (Updated 3/16/2023)
Direct obligations of the following entities are eligible collateral for the Program:
•
U.S. Department of the Treasury;
•
Federal Agricultural Mortgage Corporation (Farmer Mac);
•
Federal Farm Credit Banks Funding Corporation (Farm Credit System);
•
Federal Home Loan Bank (FHLB) System;
•
Federal Home Loan Mortgage Corporation (Freddie Mac);
•
Federal National Mortgage Association (Fannie Mae);
•
Financing Corporation (FICO);
•
Government National Mortgage Association (Ginnie Mae);