Collateral Information

Automated Loan Deposit Overview

Last Updated: March 10, 2017

 

New Automated Loan Deposit (ALD) Collateral Requirements Information 

Automated Loan Deposit (ALD) is the Federal Reserve's process for recording loan pledges at the individual loan detail level in its Collateral Management System (CMS). Depository institutions ("institutions") that pledge loans as collateral for Federal Reserve or Treasury program purposes are required to submit periodic reports detailing the pledged loans and, in most instances, must submit these reports in an ALD format.[1]

Institutions may submit their ALD collateral reports in one of two ways:

  • With a fixed position text file that conforms to the Federal Reserve's electronic loan file specifications [MS Word; 133K], or
  • With a file in Microsoft Excel® (“Excel”) format, or select other formats, which complies with the Flexible File Format Specifications (provided in the section below)

Furthermore, institutions are expected to transmit collateral reports to their Reserve Bank using an approved method of secure transmission. The following methods may be used to securely transmit ALD collateral reports: Zix, Intralinks or Email with Mandatory Transport Layer Solution (TLS). Please contact your Reserve Bank's discount window collateral staff for additional information.

Each collateral report:

  • Must provide updated principal balances for loans currently pledged (revaluations)
  • Must exclude loans that a DI no longer wishes to pledge (withdrawals)
  • May contain new loan deposits (loans that were not included on the prior report)

In addition, institutions must send an updated collateral report to their Reserve Bank any time the total current outstanding principal balance of pledged loans decreases by 10 percent or more.


ALD Flexible File Format Specifications


The specifications listed below pertain to formatting only, and are not intended to serve as a comprehensive list of fields that are required to be reported by institutions that pledge loans. In some cases, Reserve Banks may require institutions to utilize a particular template for reports. Please contact your Reserve Bank’s discount window collateral staff for the template or specific list of fields that your institution must provide for pledged loans.

Specifications:

  • Files should be saved in Excel 97-2003 format[2]
  • Files should be saved without Excel password protection
  • Files should not include merged cells, hidden rows, or hidden columns
  • The following Excel number formats should be utilized:
    • “Currency” for dollar amounts ($0.00)
    • “Short date” for dates (mm/dd/yy or mm/dd/yyyy)
  • Once an institution’s file format has been accepted by a Reserve Bank, the institution is required to utilize the same file layout for each successive collateral report submission
    • Column headers, including names, spellings, and positions, must remain unchanged
    • Worksheet (tab) names and positions must remain unchanged
    • New fields should be appended to the right of all columns in the existing file layout
  • The interest method should be reported as follows:[3]
    • Use the value Fixed for loans that carry a fixed interest rate
      A fixed interest rate is a rate that is specified at the origination of the transaction, is fixed and invariable during the term of the loan or lease, and is known to both the borrower and the lender. Also treated as a fixed interest rate is a predetermined interest rate which is a rate that changes during the term of the loan on a predetermined basis, with the exact rate of interest over the life of the loan known with certainty to both the borrower and the lender when the loan is acquired. Examples of predetermined-rate transactions are:

      • Loans that carry a specified interest rate, for, say, six months and thereafter carry a rate equal to a specific percentage over the initial rate
      • Loans that carry a specified interest rate while the loan amount is below a certain threshold amount but carry a different specified rate above that threshold (e.g., a line of credit where the interest rate is 10% when the unpaid balance of amounts advanced is $100,000 or less, and 8% when the unpaid balance is more than $100,000)
    • Use the value Floating for loans with an interest rate that floats
      A floating interest rate is a rate that varies, or can vary, in relation to an index, to some other interest rate such as the rate on certain U.S. Government securities or the bank's "prime rate," or to some other variable criterion the exact value of which cannot be known in advance. Therefore, the exact rate the loan carries at any subsequent time cannot be known at the time of origination.
  • For demand loans, which are loans without a stated maturity date that are due upon demand by the lender, the maturity date should be reported with one of the following options:
    • Leave the maturity date field blank
    • Report a maturity date of 01/01/9999
    • Report a maturity date of 12/31/9999

Institutions are encouraged to contact their Reserve Bank’s discount window collateral staff to learn more about pledging loan collateral, including requirements for periodic collateral reports.


Notes:

1. Institutions with total assets of $10 billion or more, as well as all foreign banking organizations, regardless of size, were required to begin reporting pledged loans in a format that supports ALD by December 31, 2012; all other institutions must begin reporting in a format that supports ALD by December 31, 2014. Student loans and credit card receivables are not subject to this requirement. Please review the July 30, 2012 Collateral Bulletin [PDF; 68K] for additional information.

2. Contact your Reserve Bank regarding the possibility of submitting files in other formats.

3. The Interest Method field is required to be reported by February 3, 2014 by institutions with total assets of $10 billion or more, as well as all foreign banking organizations, regardless of size.