12th District (San Francisco) Borrower-In-Custody Program Information

Please note: This information is specifically for the Federal Reserve Bank of San Francisco's BIC Program. Information regarding your Federal Reserve Bank's BIC program may be available on your district's Contacts & Resources page.

Information
Collateral– Overall information on eligibility, valuation, and pledging of collateral to the Discount Window, including the Borrower in Custody Program

Borrower in Custody (BIC) Guidelines  – 12th District-specific guidelines to the BIC program, includes pledging requirements, inspection details, templates of required documents, etc.  

Eligibility

• CAMELS composite rating of "1" or "2" (Composite ratings of "3" are generally acceptable^[1])
• "Adequately" or "Well" capitalized as evidenced by most recent capital ratios
• Acceptable controls in place to ensure satisfactory compliance with the BIC program

¹FBO and corresponding branches are in satisfactory condition

Application Process

If your institution has already filed necessary lending agreements and authorizing resolutions under the terms set forth in Federal Reserve's lending agreement, Operating Circular No. 10, then submit the following application and documentation: 

1. Application for Borrower-in-Custody of Collateral Arrangement 
2. Irrevocable Power of Attorney  - This document enables us to act on the institution's behalf to negotiate the collateral under the provision of OC-10.
3. Appendix A Instruction & Template  - This document is subject to the terms of the Letter of Agreement for OC10 and indicates the types of loans that are being pledged and physical location of original hardcopy loan documents. This includes any legal documents held by third-party custodians. In case of electronic collateral, indicate where the loans can be accessed, and authoritative copy is stored.
4. The institution's internal loan policy handbook and/or guidelines including the internal credit risk rating definitions. This is to determine underwriting methods used by the pledging institution in assessing credit risks and potential losses of loans.
5. If the loans or any legal agreements are held by a third party custodian, including subsidiaries or affiliates, the Form of Agreement for Third-Party Custodian to Hold Collateral must be completed. In addition, the corresponding third-party servicing agreement between the institution and vendor must be submitted for review. If applicable, attach the most recent third party review by audit.
6. If the institution originates loans and leases that are signed and stored electronically, and/or signed on paper and then imaged and stored electronically with the paper original destroyed (Electronic Collateral), an Electronic Collateral Attestation and Questionnaire (Electronic Collateral Questionnaire) must be completed.  It is expected that the institution has reasonable processes and procedures in place governing the use of electronic collateral.

The completed BIC Application and related required documents should be emailed to sf.crmcco@sf.frb.org or mailed to:

Credit Risk Management
Federal Reserve Bank of San Francisco
101 Market Street, MS 830
San Francisco, CA 94105

Contact us for additional information.