The Federal Reserve Implements Improvements and Streamlines the Borrower-in-Custody Program
September 08, 2026
As announced on August 6, 2026, effective today, the Federal Reserve is implementing updates to aspects of its Borrower-in-Custody loan pledging program (BIC program) that make participation easier and more closely aligned across Reserve Banks. Under the BIC program, eligible institutions may pledge a wide variety of loan types to maximize liquidity while maintaining possession of the collateral.
The BIC program updates advance Discount Window modernization and standardization efforts that make discount window access more efficient through automation enhancements and process simplification. They also provide a more consistent experience for depository institutions across all Reserve Banks.
These updates respond to industry feedback about administrative burden associated with the BIC program by speeding enrollment, reducing duplicative reviews and reporting, supporting consistent and timely processing of collateral, and focusing inspections while still assuring compliance with program requirements. The latest updates do not change existing OC-10 terms and conditions, eligibility requirements for participation in the BIC program, published Acceptance Criteria for Loans, or loan valuation and margins.
Reserve Banks are prepared to assist institutions as they transition to the new BIC program requirements.
Key Improvements
Simplified Forms and Faster Enrollment
BIC program forms are simplified without open-ended questions or supplemental addendums. Additionally, fewer supporting documents are required, and pre-enrollment inspections are no longer necessary for most institutions.
Existing participants do not need to re-apply under the updated program. For any individual participant, a transition to the new forms will occur at the institution’s next scheduled certification or when the existing arrangement requires a modification.
Find the forms and requirements here: FRB Discount Window Pledging Loans
Modified Maintenance
Ongoing BIC program compliance will be in coordination with institutions’ audit processes and leverage existing compliance work when possible. Additionally, interim reporting requirements have been simplified.
A new Auditor Job Aid has been developed to assist institutions with BIC program compliance requirements as part of the annual certification process. Key benefits include a simplified, standardized audit scope across the Reserve Banks and greater auditor discretion to determine appropriate testing depth and sample sizes based on an institution’s risk management framework.
Eliminated reporting requirement. Institutions are no longer required to notify Reserve Banks when the aggregate current outstanding balance of pledged loan collateral declines by more than 10 percent.
Focused Inspections
Inspection frequency will be risk-based, most inspections will be performed remotely and will require fewer supporting documents. Inspections will focus on three main items:
- Data quality validation – accuracy of an institution’s collateral schedules;
- Acceptance criteria satisfaction – verification that pledged collateral meets the eligibility requirements; and
- Internal controls confirmation – confirmation that pledged collateral is identified as pledged to the Reserve Bank and subject to the Reserve Bank’s control under the UCC.
Automated Collateral Schedule Uploads
Institutions can now upload Collateral Schedules online via Discount Window Direct, reducing manual processing. Visit the Discount Window Direct Application Setup page to sign up.
Get Started Today: Visit and bookmark FRB Discount Window Pledging Loans for forms and full details of the BIC program requirements.
Questions? Local Reserve Bank discount window teams are available to answer questions and assist institutions as they adjust to these changes.