FRB Atlanta BIC Program

Last Updated: 11/27/2020

Please note: This information is specifically for the Federal Reserve Bank of Atlanta's BIC Program. Information regarding your Federal Reserve Bank's BIC program may be available on your district's Contacts & Resources page.

Borrower-in-Custody Overview - [MS Word;64K] or [PDF; 136K]This document provides an overview of the Borrower-In-Custody (BIC) of collateral arrangement allows collateral to be maintained at the pledging institution rather than being delivered to the Federal Reserve Bank (FRB) or a third-party custodian.

Application Process
If you qualify and would like to apply for the BIC Program, complete the following documents and submit the originals to the Federal Reserve Bank

1.   BIC Certification, Electronic Collateral Addendum [MS Word; 25K] or [PDF; 136K] - Please complete one BIC certification, however please be sure to cover each loan type your institution plans to pledge and each location where loans are physically housed. You may add additional pages as necessary. The BIC Certification document must be signed by an authorized official of your institution, as designated by the OC-10 Authorizing Resolutions for Borrowers on file with the FRB. Additionally, the BIC Certification document must be reviewed and signed by an internal or external auditor. At the time we receive your BIC Certification, the FRB will complete a UCC-1 filing to perfect its interest in your collateral pledged.

2. Collateral Pledge Form - This document should be submitted with collateral schedule.

3. Collateral Schedule - Your institution is responsible for submitting a Collateral Pledge Form and Collateral Schedule no later than the 10th day of the month for preceding month end. The monthly Collateral Schedule must be signed or emailed by an authorized official of your institution, as designated by the OC-10 lending agreements on file with the Federal Reserve Bank. Your institution may want to review these legal agreements and revise as needed.

   1. Zix Instruction Guide: This document is an instructional guide for emailing collateral reports to the Federal Reserve through ZixCorp, an approved method of secure transmission.

4. Assignment - To be completed for perfection purposes.

5. Perfection for FHLB Members

   1. FHLB Atlanta: Guidelines on pledging collateral where both the FHLB and the FRB have collateral liens can be found in the link below:
      http://corp.fhlbatl.com/documents.aspx?id=248

   2. FHLB Cincinnati or FHLB Dallas: Contact the FRB of Atlanta to discuss these pledge arrangements.

   3. If your institution is in the process or currently images your loan notes and/or documentation

   4. If your institution will be pledging participated loans - additional documentation will be required) Loan review policy and/or internal risk rating documentation

6. Sample of all types of loan notes you plan to pledge (do not send blank documents). Include the Promissory Note, Mortgage/Deed of Trust, and Security Agreement, where applicable, for each sample. Only one sample needs to be submitted for each loan type that is to be pledged.

   FRB Atlanta accepts certain syndicated loans as collateral. Due to the restrictive language present in many syndicated loan deals (including, but not limited to, requiring consent of various parties to pledge, assign, or sell the loan), we only accept loans that meet all of the following criteria, typically found in the Successors and Assigns section of the credit agreement:

   1. allows for pledge or assignment of a Lender’s security interest to a Federal Reserve Bank

   2. dictates that no requirements in the Successors or Assigns section would apply to any such pledge or assignment to a Federal Reserve Bank, and

   3. ensures that no obligations of the Lender are able to be transferred to a Federal Reserve Bank through such pledge or assignment (e.g., the requirement to fund advances under a line of credit)

   Sample of acceptable language:

   Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank or any other central bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such a Lender as a party hereto.

7. Please notify a collateral analyst if your institution meets one or both of the following criteria as additional documentation may be required: Completed documentation for the Vault Loan Program and related required documents (OC-10 Legal Agreements) should be mailed to:

   Federal Reserve Bank of Atlanta
   Credit and Risk Management
   1000 Peachtree Street N.E.
   Atlanta, GA 30309-4470

   Contact us for questions and/or additional information