August 9, 2010

Changes to the Federal Reserve's Practices Regarding the Disclosure of Information About Discount Window Borrowers

On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Public Law No. 111-203) was signed into law. Among the provisions of the Act is a new requirement that the Federal Reserve disclose certain information regarding discount window borrowings. As a result, the Federal Reserve has changed its practices with respect to disclosure of discount window lending information.

Effective for discount window loans extended on or after July 21, 2010, the Federal Reserve will publicly disclose the following information on discount window borrowings, generally on a quarterly basis and with about a two-year lag:

• The name and identifying details of the depository institution;
• The amount borrowed by the depository institution;
• The interest rate paid by the depository institution; and
• Information identifying the types and amounts of collateral pledged in connection with any discount window loan.

Specific details on the information disclosures may include the name of the borrowing financial institution, address, ABA number, etc.; however, these details, the manner in which the information will be released and the extent of the collateral information provided will be determined and published later.

Please note that, the current discount window primary, secondary and seasonal programs have not changed. The primary credit program is the principal safety valve for ensuring adequate liquidity in the banking system and a backup source of short-term funds for generally sound depository institutions. Most depository institutions qualify for primary credit. Secondary credit is available to meet backup funding needs of depository institutions that do not qualify for primary credit. Seasonal credit is available to depository institutions that can demonstrate a clear pattern of recurring intra-yearly swings in funding needs. As always, discount window loans must be secured by collateral acceptable to the lending Reserve Bank.

For information about these programs and additional information about the change in disclosure practice, including responses to frequently asked questions (FAQs), refer to the discount window web site http://www.frbdiscountwindow.org. If you have additional questions, please contact the discount window staff directly at discountwindow@rich.frb.org or by calling 1-800-526-2036.

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