---
kind: "section"
citation: "12 C.F.R. § 1269.2"
title: "12"
number: "1269.2"
heading: "Standby letters of credit on behalf of members."
url: "https://uscodex.org/cfr/12/1269.2"
---

# §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)](/cfr/12/1269.4.md?p=a-2) of this part, and that complies with the requirements set forth in [paragraph (c)](#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 [§ 1266.7](/cfr/12/1266.7.md) of this chapter.
  - (2) A standby letter of credit issued or confirmed on behalf of a member for a purpose described in paragraphs [(a)(1)](#a-1) or [(a)(2)](#a-2) of this section may, in addition to the collateral described in [paragraph (c)(1)](#c-1) of this section, be secured by obligations of state or local government units or agencies, where such obligations have a readily ascertainable value, can be reliably discounted to account for liquidation and other risks, and can be liquidated in due course.

## Notes

### Amendments

[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; 75 FR 76623, Dec. 9, 2010; 78 FR 67009, Nov. 8, 2013]

### Authority

Authority: 12 U.S.C. 1429, 1430, 1430b, 1431, 4511, 4513 and 4526.

### Source

Source: 63 FR 65699, Nov. 30, 1998, unless otherwise noted. Redesignated at 65 FR 8256, Feb. 18, 2000, and further redesignated at 67 FR 12853, Mar. 20, 2002, and 75 FR 8240, Feb. 24, 2010.

### Amendments

[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; 75 FR 76623, Dec. 9, 2010; 78 FR 67009, Nov. 8, 2013]