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F e d er a l R ese r v e Ba n k DALLAS, TEXAS of D allas 75222 August 21, 1980 Circular No. 80-160 REVISED REGULATION A "EXTENSIONS OF CREDIT BY FEDERAL RESERVE BANKS" Access to the Discount Window by Depository Institutions TO ALL DEPOSITORY INSTITUTIONS IN THE ELEVENTH FEDERAL RESERVE DISTRICT: Under the Monetary Control Act of 1980, depository institutions which maintain reservable transaction accounts or nonpersonal time deposits now have access to the Federal Reserve's discount and borrowing facilities on the same basis as member banks. To implement this, the Board of Governors of the Federal Reserve System has revised its Regulation A, "Extensions of Credit by Federal Reserve Banks", effective September 1, 1980. Under the new regulation, Federal Reserve credit will be avail able to member and nonmember depository institutions under two programs: — Short-term adjustment credit, which is available to assist depository institutions in meeting temporary require ments for funds, or to cushion more persistent funds outflows pending an orderly adjustment of the borrower's assets and liabilities. Short-term adjustment credit is available for periods of one day to a few weeks, depending on the circumstances bringing about the need to borrow and the size of the institution. — Extended credit, which assists depository institutions with funding needs over somewhat longer periods. Included are seasonal cr ed it , which accommodates the seasonal needs of smaller institutions, and other extended c r ed it , intended for institutions facing particular or localized problems or dif ficulties in adjusting to changing money market conditions. This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) -2 - Extensions of credit at the discount window take the form of secured advances. Before turning to the discount window, depository institutions will generally be expected to rely on other reasonably available sources of funds, including any applicable special industry lenders such as the Federal Home Loan Banks, the Central Liquidity Facility of the National Credit Union Administration, and corporate central credit unions. How ever, where depository institutions require funds on short-notice to cover immediate cash or reserve needs and are unable to gain timely access to their special industry lenders, the Federal Reserve is prepared to advance funds through its discount window. On these occasions the Federal Reserve will consult and coordinate with the special industry lender as soon as possible. Any such advances will be viewed as strictly temporary and will be expected to be repaid when access to usual sources of funds is obtained, usually the next business day. Before credit can be extended to any eligible depository insti tution, the institution must have the necessary loan documentation on file with us, consisting of a borrowing resolution adopted by its board of directors, a continuing lending agreement, and a signature card or certificate of incumbency for officers authorized to borrow. All eligible institutions are encouraged to place these documents on file to permit ready access to the discount window when the need arises. Member banks which have already filed them, however, do not need to refile. If you have questions regarding the discount window or would like to request the necessary forms to qualify, please contact the office of the Federal Reserve Bank of Dallas serving the county or parish in which you r main office is located. The territories served by our Head Office and our Branches at El Paso, Houston, and San Antonio are identified on the attached sheet. Depository institutions in our Head Office territory should contact the following individuals in the Loan Department at extension 6240: Mr. Jesse D. Sanders, Assistant Vice President, or Mr. Billy J. Hayden, Manager. Institutions headquartered in our Branch territories should contact the following individuals: El Paso Branch Joel L. Koonce, Jr. (915) 544-4730, Ext. 200; Houston Branch C. 0. Holt, Jr. (713) 659-4433, Ext. 44; San Antonio Branch Thomas C. Cole (512) 224-2141, Ext. 13; or you may call on the incoming WATS number 1*800-292-5810, Ext. 13. -3- A copy of the Federal Reserve press release and the pamphlet for Regulation A are enclosed. Member banks and others maintaining Binders should file the pamphlet in their Binders. The pamphlet dated August 19, 1973 and all amendments should be destroyed. Nonmember depository insti tutions who have not yet been supplied a binder should retain the enclosed version of Regulation A for future reference. Sincerely yours, Ernest T. Baughman President Enclosures FEDERAL RESERVE BANK OF DALLAS BRANCH AND HEAD OFFICE TERRITORIES El Paso Branch The following counties are served by the El Paso Branch of the Federal Reserve Bank of Dallas: In New M e x i c o : Catron, Chaves, Curry, De Baca, Dona Ana, Eddy, Grant, Guadalupe, Hidalgo, Lea, Lincoln, Luna, Otero, Quay, Roosevelt, Sierra, Socorro, and Torrance. In T e x a s : Andrews, Brewster, Crane, Culberson, Ector, El Paso, Hudspeth, Jeff Davis, Loving, Martin, Midland, Pecos, Presidio, Reeves, Ward, and Winkler. The address and telephone number of the El Paso Branch are: Federal Reserve Bank Branch P. 0. Box 100 El Paso, Texas 79999 915-544-4730 Houston Branch The following counties are served by the Houston Branch of the Federal Reserve Bank of Dallas: In T e x a s : Anderson, Angelina, Austin, Brazoria, Brazos, Burleson, Calhoun, Chambers, Cherokee, Colorado, Fayette, Fort Bend, Galveston, Grimes, Hardin, Harris, Houston, Jackson, Jasper, Jefferson, Lavaca, Lee, Liberty, Madison, Matagorda, Montgomery, Nacogdoches, Newton, Orange, Polk, Sabine, San Augustine, San Jacinto, Shelby, Trinity, Tyler, Victoria, Walker, Waller, Washington, and Wharton. The address and telephone number of the Houston Branch are: Federal Reserve Bank Branch P. 0. Box 2578 Houston, Texas 77001 713-659-4433 San Antonio Branch The following counties are served by the San Antonio Branch of the Federal Reserve Bank of Dallas: In T e x a s : Aransas, Atascosa, Bandera, Bastrop, Bee, Bexar, Blanco, Brooks, Burnet, Caldwell, Cameron, Comal, De Witt, Dimmit, Duval, Edwards, Frio, Gillespie, Goliad, Gonzales, Guadalupe, Hays, Hidalgo, Jim Hogg, Jim Wells, Karnes, Kendall, Kenedy, Kerr, Kimble, Kinney, Kleberg, La Salle, Live Oak, Llano, McMullen, Mason, Maverick, Medina, Nueces, Real, Refugio, San Patricio, Starr, Terrell, Travis, Uvalde, Val Verde, Webb, Willacy, Williamson, Wilson, Zapata, and Zavala. -2 - The address and telephone number of the San Antonio Branch are: Federal Reserve Bank Branch P. 0. Box 1471 San Antonio, Texas 78295 512-224-2141 Head Office (Dallas) The following counties and parishes are served by the Dallas office of the Federal Reserve Bank of Dallas: In Louisiana: Bienville, Bossier, Caddo, Caldwell, Catahoula, Claiborne, Concordia, De Soto, East Carroll, Franklin, Grant, Jackson, La Salle, Lincoln, Madison, Morehouse, Natchitoches, Ouachita, Red River, Richland, Sabine, Tensas, Union, Webster, West Carroll, and Winn. In Oklah o ma : Atoka, Bryan, Choctaw, Coal, Johnston, McCurtain, Marshall, and Pushmataha. In T e x a s : All Texas counties other than those listed in the Branch territories above. The address and telephone number of the Dallas (Head) office of the Federal Reserve Bank of Dallas are: Federal Reserve Bank of Dallas Station K Dallas, Texas 75222 214-651-6111 FEDERA^RESERVEpresjn^lease For immediate release August 11, 1980 The Federal Reserve Board today announced adoption of major revisions of its rules governing the use of its discount window for extensions of credit by the Federal Reserve to depository institutions. The revision of the Board's Regulation A (Extensions of Credit) was made to carry out the provisions of the Monetary Control Act of 1980. new rules are effective September 1. The The Board acted after consideration of comment received on revision of the regulation proposed in June. The Monetary Control Act provides that any depository institution that offers transaction accounts or nonpersonal time deposits which are subject to reserve requirements shall have access to the Federal Reserve's discount and borrowing facilities on the same basis as member banks. Under Regulation A as revised to implement the Act, Federal Reserve credit will be offered under two major programs — extended credit. adjustment credit and Adjustment credit accounts for most Federal Reserve lending. It is made on a very short term basis to help depository institutions adjust to sudden changes in their need for funds. Extended credit is designed to help institutions cope with such needs over somewhat longer periods. It includes seasonal credit to accommodate the needs of smaller institutions, and other extended credit for institutions facing particular problems. Problems of this latter type may arise from the particular circumstances of a given institution, or from general difficulties affecting a broader range of institutions. In adopting revised Regulation A, the Board modified its June proposal slightly with respect to nonmember institutions that have -2access to special industry lenders such as the Federal Home Loan Banks, credit union centrals, and the Central Liquidity Facility of the National Credit Union Administration. The amendment as adopted provides for temporary adjustment credit to such institutions where they are unable to gain timely access to their special lender and for consultation and coordination with the special industry lender, as follows: Nonmember depository institutions ... like member banks generally are expected to rely on other reasonably available sources of funds before turning to the discount window for assistance ... In instances where depository institutions require funds on short notice to cover immediate cash or reserve needs and are unable to gain timely access to their special industry lenders, the Federal Reserve is prepared to advance funds through its discount window. On these occasions the Federal Reserve will consult and coordinate with the special industry lender as soon as possible. Any such advances ... will be expected to be repaid when access to the usual sources of funds is secured, usually the next business day. The Board also set forth the conditions under which the Federal Reserve will assist nonmember institutions needing help over longer periods— including periods of deposit disintermediation. In these instances the Federal Reserve will consult with the institution's supervisor to determine, among other things, why funds are not available from sources other than the Federal Reserve. The Board, as it had proposed, made the possible use of a discount rate surcharge a permanent addition to the System's discount lending rules applicable, according to circumstances, to both adjustment and extended credit. The Board's revised Regulation A is attached. * * * * * * * * BOARD O F G O V ER N O R S o f th e F ED ER A L RESERV E SYSTEM EXTENSIONS OF CREDIT BY FEDERAL RESERVE BANKS R E G U L A T IO N A (12 C F R 201) As ad o p ted effective Septem ber 1, 1980 ' ^ 8 S P y Contents Page S e c . 2 0 1 .1 — A u t h o r i t y , S co p e ....................................................................................................................... 5 S e c . 2 0 1 . 2 — D e f i n i t i o n s ........................................................................................................................................................................... 5 S e c . 2 0 1 .3 — A v a il a b il it y a n d e r m s ........................................................................................................................................... 6 S e c . 2 0 1 .4 — A dvances and i s c o u n t s ......................................................................................................................................... 7 S e c . 2 0 1 .5 — G eneral R e q u i r e m e n t s .............................................................................................................................................. 7 S e c . 2 0 1 . 6 — F e d e r a l I n t e r m e d i a t e C r e d i t B a n k s ............................................................................................................... 7 Statutory A p p e n d ix 7 D a n d T P u rp o se ............................................................................................................................................................. 3 REGULATION A (12 C F R 2 01) As adopted effective Septem ber 1, 1980 EXTENSIONS OF CREDIT BY FEDERAL RESERVE BANKS S E C T IO N 2 0 1 .1 — A U T H O R IT Y , S C O P E A N D PURPOSE. (a) A u th o r ity an d S c o p e . T h is P a rt is issu ed u n d e r the a u th o rity o f se c tio n s 10(a), 10(b ), 13, 13a, and 19 o f the Federal Reserve Act (12 U .S .C . §§ 347a, 347b, 343 et seq., 347c, 348 et seq., 374, 374a and 461), oth er provisions o f the Federal R e se rv e A c t, an d s e c tio n 7 (b ) o f th e I n te r n a tio n a l B anking A ct o f 1978 (12 U .S .C . § 347d) and re lates to extensions o f credit by Reserve B anks to d e pository institutions and o thers. Except as m ay be otherwise provided, this Part shall be applicable to U n ite d S ta te s b r a n c h e s a n d a g e n c ie s o f fo r e ig n banks subject to reserve requirem ents under R egula tion D (12 C FR Part 204) in the sam e m anner and to the same extent as m em ber banks. (b) P u r p o se . T h is P art e sta b lish e s rules u n d er w hich Federal Reserve Banks may extend credit to depository institutions and others. Extending credit to d e p o s ito r y in s titu tio n s to a c c o m m o d a te c o m m erce, industry, and agriculture is a principal func tion o f R eserve B anks. W hile open m ark et o p era tions are the primary m eans o f affecting the overall supply o f reserves, the lending function o f the R e serve Banks is an effective method o f supplying re serves to m eet the p artic u la r cred it needs o f indi vidual depository institutions. T h e le n d in g f u n c tio n s o f th e F e d e ra l R e se rv e System are cond ucted with due regard to the basic objectives o f m onetary policy and the m aintenance o f a sound and orderly financial system. T hese b a sic objectives are prom oted by influencing the over all v olum e and co st o f cred it thro ug h actions that affect the volum e and cost o f reserves to depository institutions. Borrow ing by individual depository in stitutions, at a rate o f interest that is adjusted from tim e to tim e in a c c o rd a n c e w ith p re v a ilin g e c o nom ic and m on ey m arket co n d itio n s, has a direct impact on the reserve positions o f the borrowing in stitutions and thus on their ability to meet the credit needs o f the ir cu sto m ers. H o w ev er, the effects o f such borrowing do not remain localized but have an im p ortan t b earin g on ov erall m o ne tary and credit conditions. S E C T IO N 2 0 1 .2 — D E F IN IT IO N S F o r pu rp o se o f this P a rt, th e fo llo w in g d e fin i tions shall apply: (a) (1) D epository institution m eans an institu tion that m aintains reservable transaction accounts or nonpersonal time deposits and is: (A) an insured bank as defined in section 3 o f the F ederal D e p o sit In su ra n ce A ct (12 U .S .C . § 1813(h)) or a bank that is eligible to apply to b e com e an insured bank under section 5 o f such Act (12 U .S .C . § 1815); (B) a savings b ank o r m utual savings bank as defined in sectio n 3 o f the F ederal D ep osit In surance Act (12 U .S .C . § 1813(f), (g)); (C ) an in s u re d c re d it u n io n as d e fin e d in sectio n 101 o f the F e d e ra l C re d it U n io n A ct (12 U .S .C . § 1752(7)) o r a credit union that is eligible to apply to b e co m e an in su red cred it union u n d er section 201 o f such A ct (12 U .S .C . § 1781); (D) a m em ber as defined in section 2 o f the F e d e r a l H o m e L o a n B a n k A c t (1 2 U . S . C . § 1422(4)); or (E) an insured institution as defined in sec tion 401 o f the N ation al H o u sin g A ct (12 U .S .C . § 1724(a)) o r an institution that is eligible to apply §§ 201.2— 201.3 to becom e an insured institution under section 403 o f such A ct (12 U .S .C . § 1726). (2) A financial institution that is not required to m a in ta in re s e rv e s u n d e r P art 2 04 o f th is T itle (Regulation D) because it is organized solely to do business with other financial institutions, is ow ned primarily by the financial institutions with which it does b u sin ess, and d oes not d o b u sin ess w ith the general public is not a depository institution. (b) T ransaction account and nonpersonal tim e deposits have the m eanings specified in Part 204 o f this Title (Regulation D). SECTIO N 2 0 1 .3 — A V A IL A B IL IT Y A N D TER M S (a) S hort-term a d ju stm en t cred it. Federal R e serve credit is available on a short-term basis to a dep o sito ry institution u n d er such ru les as m ay be prescribed to assist the institution, to the extent ap p ro p riate , in m e etin g te m p o ra ry req u irem en ts for fu n d s, o r to c u sh io n m o re p e rs iste n t o u tflo w s o f fu n d s p e n d in g an o r d e r ly a d j u s tm e n t o f the institution's assets and liabilities. Such credit gener ally is av a ila b le o n ly a fte r re a s o n a b le a ltern ativ e sources o f funds, including credit from special in dustry lenders, such as Federal H om e Loan Banks, the National Credit Union A dm inistration’s Central L iquidity Facility, and corporate central credit u n ions have been fully used . U n d er certain c irc u m stances, a surcharge may be imposed above the ba sic rate o f in te re st n o rm a lly c h a rg e d by R eserv e Banks. (b) E xtended credit. (1) Seasonal credit. F ed eral R eserve credit is av ailable fo r periods longer than those perm itted u nder adjustm ent credit to as sist sm aller depository institutions in meeting regu lar needs for funds arising from a co m b in atio n o f expected patterns o f m ovem ent in their deposits and loans. S easonal credit is av ailab le on ly if sim ilar assistance is not available from other special indus try lenders. Seasonal credit will ordinarily be lim ite d to th e a m o u n t b y w h ic h th e d e p o s ito r y institution’s seasonal needs exceed certain percen t ages, established by the Board o f G overnors, o f the institution’s average total deposits in the preceding calend ar year. Such credit will be available if the Reserve Bank is satisfied that the institution’s q ual ifying n eed for fu nd s is seaso nal an d will persist for at least four w eeks. N eed for credit at d ep o si tory in stitu tio n s w ill also be g iv e n c o n sid e ra tio n R EG UL A T I O N A when institutions are experiencing unusual seasonal de m an d s for cred it in a perio d o f liquidity strain. T o the ex ten t p ra c tic a b le , a dep o sito ry institution sho uld arran g e in a d v an c e for seaso n al cred it for the full period during w hich such credit is expected to be required. U nder certain circum stances, a sur charge may be im posed above the basic rate o f in terest normally charged by Reserve Banks. (2) O th e r e x te n d e d c r e d it. F ederal R eserv e credit is available to d ep o sito ry in stitutions u nder extended credit arrangem ents w here sim ilar assist ance is not reasonably available from other sources, including special industry lenders. Such credit may be p ro v id e d w here th e re are e x c e p tio n a l c ir c u m stances or practices involving only a particular d e p o s ito ry in s ti tu t io n . E x c e p tio n a l c ir c u m s ta n c e s would include situations w here an individual depos itory in s titu tio n is e x p e rie n c in g fin a n c ia l strain s arising from p a rticu lar c ircu m stan ces o r practices affecting that in stitu tion — in c lu d in g sustaine d d e p o s it d r a i n s , im p a ir e d a c c e s s to m o n e y m a rk e t fu n d s , o r su dd en d e te rio ra tio n in loan re p a y m e n t performance. E xtended credit may also be provided to a c c o m m o d a te th e n e e d s o f d e p o s ito ry in s titu tions, including those with longer term asset portfo lios, that may be experiencing difficulties adjusting to changing money market conditions o ver a longer period, particularly at tim es o f d eposit d isinterm e diation. A special rate o r rates above the basic dis count rate establish ed by the R eserve B anks, su b je c t to rev iew and d e te rm in a tio n by the B oard o f G o v e r n o r s , m a y b e a p p lie d to o th e r e x t e n d e d credit. (c) E m e r g e n c y c r e d it fo r o th e r s . In u n u su a l and e x ig e n t c irc u m s ta n c e s, a R eserv e Bank m ay, after consultation with the Board, advance credit to individuals, partnerships, and corporations that are not depository institutions if, in the judgm ent o f the R eserv e B a n k , c re d it is not a v a ila b le fro m o th e r sources and failure to obtain such credit would ad versely affect the econ om y . T he rate applicable to such cre d it will be a b o v e the hig h e st rate fo r a d vances in effect for depository institutions. W here the collateral used to secure such credit consists o f assets other than obligations of, or fully guaranteed as to principal and interest by, the United States or an a gen cy th e re o f, an affirm ativ e v ote o f five o r more Board members is required before credit may be extended. §§ 201.4— 201.6 R EG UL A T I O N A SECTION 2 0 1 .4 — A D V A N C E S A N D D IS C O U N T S SECTION 2 0 1 .6 — F E D E R A L IN TE R M ED IA TE C R E D IT B A N K S (a) Reserve B anks may lend to depository insti tutions either through advances secured by accep t able co llatera l o r th ro u g h th e d is c o u n t o f certa in types o f paper. C redit extended by the Federal R e serve generally takes the form o f an advance. (b) R eserv e B an k s m ay m ak e a d v a n c e s to any depository institution if secured to the satisfaction o f the Reserve B ank. Satisfactory collateral gen er ally includes United States governm ent and Federal ag e n c y s e c u r itie s , a n d , if o f a c c e p ta b le q u a lity , m o rtg a g e n o te s c o v e rin g 1-4 fa m ily re s id e n c e s , State and local governm ent securities, and business, consum er and other custom er notes. (c) If a R eserve B ank c o n c lu d e s that a d e p o si tory institution will be better accom m odated by the discount o f p a per than by an ad v ance, it m ay d is count any paper endorsed by the depository institu tion th a t m e e ts th e re q u ire m e n ts sp e c ifie d in the Federal Reserve Act. A R e se rv e B an k m ay d is c o u n t for any F ed eral Interm ediate C redit Bank (1) agricultural paper, or (2) notes payable to and bearing the endorsem ent o f th e F ed era l In te rm e d ia te C re d it B a n k th a t c o v e r loans or advances m ade u n d e r sub sections (a) and (b) o f § 2 .3 o f th e F arm C re d it A ct o f 1971 (12 U .S .C . § 2074) and that are secured by paper eli gible for discount by Reserve Banks. Any paper so d iscounted shall have a period rem aining to m a tu rity at the tim e o f d iscou nt o f not m ore than nine months. SECTIO N 2 0 1 .5 — G E N E R A L R EQ U IR E M EN T S (a) Credit for capital purposes. Federal Reserve credit is not a substitute for capital. (b) Compliance with law and regulation. All credit ex ten d ed u n d er this Part shall co m p ly with a p p lic a b le re q u ire m e n ts o f law and o f th is Part. Each Reserve B ank (1) shall keep itself inform ed o f the general ch ara cter and am o un t o f the loans and investm ents o f dep o sito ry institutions w ith a view to ascertaining w hether undue use is being made o f credit for the speculative carrying o f o r trading in securities, real estate, o r co m m o d ities, o r for any other purpose inconsistent with the m aintenance o f sound credit conditions, and (2) shall consider such in f o r m a tio n in d e t e r m i n in g w h e th e r to e x te n d credit. (c) Information. A R eserve Bank shall require such information as it believes appropriate o r desir able to insure that paper tendered as collateral for advances o r for discount is acceptable and that the credit provided is used in a m anner consistent with this Part. (d) Indirect credit for others. Except with the perm ission o f the B oard o f G o v e rn o rs, no d e p o si tory institution shall act as the m edium o r agent o f ano th er depo sito ry institution in receiving F ederal Reserve credit. STATUTORY APPENDIX S E C T I O N 10 (b ) O F T H E F E D E R A L R ESERVE A C T 1 1. A d v a n c e s to in d iv id u a l m e m b e r b a n k s S e c . 10 (b ). A ny F ederal R eserv e B an k , u n d er rules and re g u la tio n s p re s c rib e d by the B oard o f G o v e r n o r s o f th e F e d e r a l R e s e rv e S y s te m , m ay make advances to any m em b er bank on its time or d em an d notes h av in g m a tu rities o f not m ore than four m onths and w hich are secured to the satisfac tion o f such Federal Reserve Bank. N o tw ithstand in g the fo reg o in g , any Federal R e serve B ank, under rules and regulations prescribed by the B oard o f G overno rs o f the Federal Reserve S ystem , m ay m ake adv ances to any m e m b e r bank o n its tim e n o te s h a v in g su c h m a tu r i ti e s as th e B o a rd m a y p r e s c r ib e an d w h ic h are s e c u r e d by mortgage loans covering a o ne-to-four family resi den ce. Such ad v an ces shall be ar in terest at a rate equ al to the low est d iscou nt rate in effect at such Federal Reserve Bank on the date o f such note. I I I . S C . . title 12 . s e c . 3 4 7 b . J ■ S E C T IO N 19 O F T H E F E D E R A L R E S E R V E ACT Section 19 (b) o f the Federal Reserve Act provides in p art as fo llo w s (as a m e n d e d by the M o n e ta ry Control A ct o f 1980: 1 P a ra g ra p h n u m b e rs a nd c a p tio p s h a v e been a d d e d to fac ilitate ref ere nc e S T A T U T O R Y APPENDIX R E G UL A T I O N A strictions, and regu lation s as the B o ard o f G o v e r nors o f the Federal Reserve System m ay prescribe. R e se r v e re q u ir e m e n ts (b) * * * (7) D iscou nt and B orro w ing . A ny depository institution in w hich transaction accounts o r nonper sonal tim e deposits are held shall be entitled to the same discount and borrowing privileges as m em ber ban k s. In the ad m in istra tio n o f d isco u n t and b o r ro w ing p riv ile g e s, th e B oard a nd the Fed eral R e serve B anks shall take into consideration the special needs o f savings and o th e r dep o sito ry institutions for access to discount and borrowing facilities con sistent with their long-term asset portfolios and the sensitivity o f such in stitutions to trends in the n a tional m oney markets. (U .S .C , title 12, sec. 601 ] S E C T IO N 13 O F T H E F E D E R A L R E S E R V E ACT Section 13 o f the F ederal R eserv e Act p rovides in part as follows: * * * * [U .S .C ., title 12, sec 343 ] * * * * * 13. A d v a n c e s to in d iv id u a ls , p a r tn e r s h ip s , a n d c o r p o r a tio n s o n o b lig a tio n s o f U n ited S ta tes Subject to such limitations, restrictions and regu la tio n s as the B o a rd o f G o v e rn o rs o f the F ed eral Reserve System may prescribe, any Federal Reserve Bank m ay m ake ad v ances to any individual, p art nership o r co rp o ra tio n on the p ro m isso ry notes o f such individual, partnership o r corporation secured by direct obligations o f the United States o r by any o bligation w hich is a direct ob lig ation of, o r fully g u a r a n t e e d as to p r i n c ip a l a n d in t e r e s t b y , an y agency o f the U n ite d S tates. Such ad v an ce s shall b e m a d e f o r p e r i o d s n o t e x c e e d i n g 9 0 d a y s an d shall be ar interest at rates fixed from tim e to time by the Federal R eserve Bank, subject to the review and determination o f the Board o f G overnors o f the Federal Reserve System. * 3 . D isc o u n ts fo r in d iv id u a ls , p a r tn e r s h ip s , a n d c o r p o r a tio n s In unusual and exigent circum stances, the Board o f G o v e rn o rs o f th e F ed e ral R e se rv e S y stem , by the affirm ative vote o f not less than five m em bers, m ay au th o riz e any F ed eral R e se rv e B a n k , du ring such period s as the said B oard m ay d eterm in e , at rates established in accordance with the provisions o f section 14, su bd iv ision (d), o f this A ct, to d is co unt for any in d iv id u a l, p artn ersh ip , o r c o rp o ra tio n , n o te s , d r a f ts , an d b ills o f e x c h a n g e o f the kinds and maturities m ade eligible for discount for m e m b e r b ank s u n d e r o th e r p ro v isio n s o f this A ct w hen such notes, drafts, and bills o f exchange are indorsed or otherw ise secured to the satisfaction o f the F ed eral R eserv e B ank: Provided, T h at b efore d is c o u n tin g a n y s u c h n o te , d r a f t , o r b ill o f e x change for an individual o r a partnership o r co rp o ration the F ederal R e se rv e B an k shall obtain e v i d e n c e th a t s u c h i n d i v i d u a l , p a r t n e r s h i p , o r corporation is unable to secure adequate credit ac com m odations from o ther banking institutions. All such discounts for individuals, partnerships, o r co r p o ra tio n s shall be su b ject to su ch lim ita tio n s, re lU .S .C ., title 12, sec 347c.) 1 4 . R e c e ip t o f d e p o s its f r o m , d is c o u n t p a p e r e n d o r se d b y , a n d a d v a n c e s to fo r e ig n banks Subject to such restrictions, limitations, and reg ulations as may be im posed by the B oard o f G o ver nors o f the Federal R eserv e S ystem , each Federal Reserve Bank may receive deposits from , discount p a p e r e n d o r s e d b y , a n d m a k e a d v a n c e s to an y b ra n c h o r a g e n c y o f a fo re ig n b a n k in th e sam e manner and to the sam e extent that it may exercise such pow ers with respect to a m em ber bank if such branch or agency is m aintaining reserves with such R eserve B ank pursuant to section 7 o f the Interna tional Banking A ct o f 1978. In exercising any such pow ers with respect to any such branch or agency, each Federal Reserve Bank shall give due regard to account balances being m aintained by such branch or agency with such Reserve B ank and the propor tion o f the assets o f such b ran ch o r ag ency b ein g held as reserves under section 7 o f the International Banking Act o f 1978. (U .S .C ., title 12, sec. 347 ]
@FedFRASER