CFR > Title 12 - Banks and Banking > CHAPTER XII—FEDERAL HOUSING FINANCE AGENCY > SUBCHAPTER D—FEDERAL HOME LOAN BANKS (parts 1261 to 1274) > PART 1269—STANDBY LETTERS OF CREDIT > 1269.2—Standby letters of credit on behalf of members.

1269.2—Standby letters of credit on behalf of members.

(a) Authority and purposes. Each Bank is authorized to issue or confirm on behalf of members standby letters of credit that comply with the requirements of this part, for any of the following purposes:
(1) To assist members in facilitating residential housing finance;
(2) To assist members in facilitating community lending;
(3) To assist members with asset/liability management; or
(4) To provide members with liquidity or other funding.
(b) Fully secured. A Bank, at the time it issues or confirms a standby letter of credit on behalf of a member, shall obtain and maintain a security interest in collateral that is sufficient to secure fully the member's unconditional obligation described in § 1269.4(a)(2) of this part, and that complies with the requirements set forth in paragraph (c) of this section.
(c) Eligible collateral. (1) Any standby letter of credit issued or confirmed on behalf of a member may be secured in accordance with the requirements for advances under § 950.7 of this title.
(2) A standby letter of credit issued or confirmed on behalf of a member for a purpose described in paragraphs (a)(1) or (a)(2) of this section may, in addition to the collateral described in paragraph (c)(1) of this section, be secured by obligations of state or local government units or agencies rated as investment grade by an NRSRO.

Code of Federal Regulations

[63 FR 65699, Nov. 30, 1998, as amended at 65 FR 8265, Feb. 18, 2000; 65 FR 44431, July 18, 2000. Redesignated and amended at 67 FR 12853, Mar. 20, 2002; 75 FR 8240, Feb. 24, 2010]

Code of Federal Regulations

Effective Date Note: At 75 FR 76623, Dec. 9, 2010, § 1269.2 was amended in (c) by removing “§ 950.7 of this title” and replacing it with “§ 1266.7 of this chapter”, effective Jan. 10, 2011.