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F ederal reser ve Bank of Dallas DALLAS, TE X A S 75222 Circular No. 6 9 -16 January 22, 1969 OBLIGATIONS ELIGIBLE AS COLLATERAL FOR ADVANCES To the Member Banks in the Eleventh Federal Reserve District: Enclosed is a copy of a revision to paragraph (d) of the Board of Governors' recent interpretation concerning the eligibility of Federal agency obligations as collateral for advances to member banks. This interpretation was fur nished to your bank with our Circular Letter No. 6 Q - 2 k k , dated November 1 9 , 1 9 6 8 . The revised paragraph, adopted by the Board, expands the eligibility of municipal "warrants" as collateral for advances. If we may be of further assistance with the inter pretation, please contact Mr. Leon W. Cowan, Vice President, in charge of our Bank’s Loan and Bank Services Department. Yours very truly, P. E. Coldwell President Enclosure (l) This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) TITLE 12 - BANKS AND BANKING CHAPTER II - FEDERAL RESERVE SYSTEM SUBCHAPTER A - BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM [Reg. A] PART 201 - ADVANCES AND DISCOUNTS BY FEDERAL RESERVE BANKS Obligations Eligible as Collateral for Advances Section 201*108(d) is hereby revised to read as follows: (d) Also eligible for purchase under section 14(b) are "bills, notes, revenue bonds, and warrants with a maturity from date of purchase of not exceeding six months, issued in antici pation of the collection of taxes or in anticipation of the receipt of assured revenues by any State, county, district, political subdivision, or municipality in the continental United States, including irrigation, drainage and reclamation districts."— ^ In determining the eligibility of such obliga tions as collateral for advances, compliance with the requirements of Regulation E is not necessary; but the Reserve Bank will satisfy itself that sufficient tax or other assured revenues earmarked for payment of such obligations will be available for that purpose at maturity, or within six months 1/ Paragraph 3 of section 1 of the Federal Reserve Act (12 U,S.C. 221) defines "the continental United States" to mean "the States of the United States and the District of Columbia", thus including Alaska and Hawaii* -2 - from the date of the advance if no maturity is stated. Payments due from Federal, State or other governmental units may, in the Reserve Bank's discretion, be regarded as "other assured revenues"; but neither the proceeds of a prospective issue of securities nor future tolls, rents or similar col lections for the voluntary use of government property for non-governmental purposes will normally be so regarded. Obligations with original maturities exceeding one year would not ordinarily be self-liquidating as contemplated by the statute, unless at the time of issue provision is made for a redemption or sinking fund that will be sufficient to pay such obligations at maturity. (Interprets and applies 12 U.S.C. 347) Dated at Washington, D. C., this 15th day of January, 1969. By order of the Board of Governors. (Signed) Robert P. Forrestal Robert P. Fotrrestal, Assistant Secretary.
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