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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.


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102