announcement090330

March 30, 2009

Announcement regarding Changes to the Discount Window & Payment System Risk Collateral Margins Table

In 2005, the Federal Reserve announced the implementation of separate valuation processes for loans pledged in a designated format through our Automated Loan Deposit process (ALD) or "individually deposited," versus loans pledged in an alternative format or "group deposited." At that time, it was also noted that lendable values for group deposited loans would be based on assumptions regarding the average risk characteristics of the loans and subject to periodic changes. Effective April 27, 2009, the Federal Reserve will make the following changes to the lendable values for group deposited loans pledged to the Federal Reserve Banks for discount window or PSR collateral purposes, to reflect recent trends in the values of some types of loans:

Loan Type	Current Lendable Value	Lendable Value as of 4/27/09
Commercial and Agricultural Loans (Normal Risk Rated)	75%	65%
Commercial Real Estate Loans	75%	65%
Construction Real Estate Loans	75%	65%
1-4 Family Residential Mortgages	85%	70%
Home Equity	85%	50%
Consumer Loans - Autos, Private Banking, Installment, Etc.	80%	65%
Consumer Loans - Credit Card Receivables, Student Loans	75%	60%
Consumer Loans - Subprime Credit Card Receivables	60%	45%

Published lendable values will remain unchanged for individually deposited loans. Further, as stated in our 2005 announcement, for institutions in sound financial condition, the collateral value of individually deposited loans will never be below the collateral value of group deposited loans. (Please note that the lendable value for any group deposited loan type acts as a floor for the lendable value of individually deposited loans of the same type. Thus, any individually deposited loans that are currently hitting the floor will receive less collateral value when reduced group deposit lendable values are implemented.)

In addition, the Federal Reserve is formally announcing the acceptance of senior unsecured debt issued under the FDIC's Temporary Liquidity Guarantee Program (TLGP). The new collateral margins for TLGP are listed below and have been added to the Discount Window and PSR Collateral Margins Table:

	Lendable Value for Securities or Instruments with Market Prices (% of Market Value)			Lendable Value for Securities or Instruments if Market Price Not Available (% of Par or Outstanding Balance)
	Duration Buckets
	0-5	>5-10	>10
FDIC Temporary Liquidity Guarantee Program (TLGP):
Notes, Bonds – U.S. Dollar Denominated	97%	96%	92%	85%
Notes, Bonds – Foreign Denominated	92%	91%	87%
Zero Coupons – U.S. Dollar Denominated	96%	94%	89%
Commercial Paper/ Certificates of Deposit	97%			95%

For more information on these changes, please contact your Federal Reserve Bank or see our recently updated Collateral FAQs on the Federal Reserve's Discount Window and Payment System Risk website, http://www.frbdiscountwindow.org.