New Automated Loan Deposit (ALD) Collateral Report Submission Requirements

The Federal Reserve is now providing further details about the format in which the new loan fields should be submitted as well as other file submission requirements. The purpose of today’s update is to provide “in scope” institutions with the necessary information to build new pledge loan files and how to submit these files. To facilitate this effort, select “in-scope” depository institutions (DIs) will be required to provide more loan fields in a new file format when pledging loans.  These files should be submitted in an approved method of secure transmission. The Federal Reserve will provide details regarding the submission date in a subsequent communication.


As a reminder, last year the Federal Reserve announced new ALD collateral report submission requirements affecting select institutions for Discount Window lending and Payment System Risk purposes, beginning in 2019 and targeted to take effect by year end 2020. The new requirements support the Federal Reserve’s effort to assign more precise fair market value estimates to pledged loans.  The previously announced requirements do not apply to all institutions. The “in-scope” institutions that are required to submit the additional loan fields in 2019 are (1) All institutions that are underneath a Bank Holding Company  (including a Financial Holding Company) or Intermediate Holding Company with >$50B in total assets, which is defined as the average over the last four calendar quarters, (2) All Foreign Banking Organizations and (3) All other domestic institutions with >$50B in total assets, which is defined as the average over the last four calendar quarters. Institutions that met the “in-scope” definition as of November 28, 2017 have already been contacted to ensure awareness of the new requirements.  If your institution becomes “in-scope”, the Federal Reserve will contact you at that time to inform you of the need to comply with the new requirements.  However, your institution may voluntarily participate in the new ALD collateral reporting requirements at any time.  Please contact your local Federal Reserve Bank in order to pursue this option.


Collateral management is a central element of the Federal Reserve’s credit risk management practices. Accordingly, the Federal Reserve periodically conducts reviews of its margins and valuation practices, making adjustments as needed. The new requirements for submitting ALD collateral reports announced today continue that practice.


There are no changes to the key principles underlying the Federal Reserve’s collateral management practices: frequent revaluation of assets, use of margins to mitigate Reserve Bank exposure to market and credit risk, use of the best available data, and periodic reassessments of model assumptions. Likewise, there are no changes to the range of assets accepted as collateral. Accompanying this announcement are frequently asked questions. In addition, a high-level summary of the existing valuation and margining approach for Discount Window and Payment System Risk collateral is available in the Federal Reserve Collateral Guidelines.