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 > 1269.4—Obligation to Bank under all standby letters of credit.

1269.4—Obligation to Bank under all standby letters of credit.

(a) Obligation to reimburse. A Bank may issue or confirm a standby letter of credit only on behalf of a member or housing associate that has:
(1) Established with the Bank a cash account pursuant to §§ 950.17(b)(2)(i)(B), 950.17(d), or 969.2 of this title; and
(2) Assumed an unconditional obligation to reimburse the Bank for value given by the Bank to the beneficiary under the terms of the standby letter of credit by depositing immediately available funds into the account described in paragraph (a)(1) of this section not later than the date of the Bank's payment of funds to the beneficiary.
(b) Prompt action to recover funds. If a member or housing associate fails to fulfill the obligation described in paragraph (a)(2) of this section, the Bank shall take action promptly to recover the funds that such member or housing associate is obligated to repay.
(c) Obligation financed by advance. Notwithstanding the obligations and duties of the Bank and its member or housing associate under paragraphs (a) and (b) of this section, the Bank may, at its discretion, permit such member or housing associate to finance repayment of the obligation described in paragraph (a)(2) of this section by receiving an advance that complies with sections 10 or 10b of the Act (12 U.S.C. 1430, 1430(b)) and part 950 of this title.

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, § 1269.4 was amended in (a)(1) by removing “§ 950.17(b)(2)(i)(B)”, and replacing it with “§ 1266.17(b)(2)(i)(B)” and “§ 950.17(d) ” with “§ 1266.17(d)”; in (c), “part 950” is replaced with “part 1266”, effective Jan. 10, 2011.
Code of Federal Regulations 308