New ALD Collateral Requirements
Last Updated: February 6, 2018
Please note that these requirements do not apply to all institutions
The Federal Reserve is announcing 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 in 2020. The new requirements support the Federal Reserve’s effort to assign more precise fair market value estimates to pledged loans.
The new ALD 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.
The Federal Reserve will contact all institutions that are “in-scope” no later than December 19, 2017 in order to ensure awareness of the new requirements. If the Federal Reserve does not contact your institution by December 19, 2017, you do not need to comply with the new requirements at this time.
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 continue that practice.
See the Collateral Bulletin applicable to these changes below:
For further detail, see related Frequently Asked Questions