New Requirement for Submitting Information about Pledged Loans

As part of its continuous effort to ensure effective risk management policies and procedures, the Federal Reserve periodically reviews and adjusts its programs and practices for the administration and valuation of collateral pledged for Federal Reserve or Treasury purposes. 

At this time, the Federal Reserve is announcing the following changes:

  • By February 3, 2014, depository institutions (“institutions”) with total assets of $10 billion or more, as well as all foreign banking organizations, regardless of size, are required to begin reporting whether each loan in their pledged loan
    listing(s) has a fixed or floating interest rate.1

    Please note: institutions with less than $10 billion in assets have the option of reporting whether each loan in their pledged loan listing(s) has a fixed or floating interest rate and may wish to do so in order to maximize collateral value upon implementation of upcoming changes to the Federal Reserve’s collateral margins table, expected no earlier than mid-2014.

    Reserve Banks will contact institutions that are required to begin reporting the fixed or floating rate indicator to provide instructions on how to add this information to their pledged loan listing(s).  The specifications for providing this information are available on the Automated Loan Deposit Overview page of the Discount Window & Payment System Risk website.

  • In the first quarter of 2014, the Federal Reserve will provide institutions with additional options for submitting information about demand loans (i.e., loans without a stated maturity date that are due upon demand by the lender) pledged as collateral for Federal Reserve or Treasury purposes.  An announcement regarding the details of these additional options will be posted on the Discount Window & Payment System Risk website once they are available.

Institutions pledging loans as collateral must comply with the Federal Reserve’s requirements for submitting information about pledged loans. Failure to comply with these requirements may lead to reduced collateral value or ineligibility for loan pledge programs.

For additional information, please review the October 4th, 2013 Collateral Bulletin or contact your Reserve Bank’s discount window collateral staff.

Notes:
1. This requirement does not apply to the “student loans” and “credit card receivables” loan categories.