---
kind: "section"
citation: "12 U.S.C. § 2294"
title: "12"
title_heading: "Banks and Banking"
number: "2294"
heading: "Payments on behalf of public bodies"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/2294"
units:
  - "Chapter 24 — Federal Financing Bank"
---

# §2294. Payments on behalf of public bodies

- (a) Notwithstanding any other provision of this chapter, the purchase by the [Bank](/usc/12/2282.md?p=4) of the [obligations](/usc/12/2282.md?p=2) of any local public body or agency within the United States shall be made upon such terms and conditions as may be necessary to avoid an increase in borrowing costs to such local public body or agency as a result of the purchase by the [Bank](/usc/12/2282.md?p=4) of its [obligations](/usc/12/2282.md?p=2). The head of the [Federal agency](/usc/12/2282.md?p=1) guaranteeing such [obligations](/usc/12/2282.md?p=2), in consultation with the [Secretary](/usc/12/1715z–22a.md?p=4) of the Treasury, shall estimate the borrowing costs that would be incurred by the local public body or agency if its [obligations](/usc/12/2282.md?p=2) were not sold to the [Bank](/usc/12/2282.md?p=4).
- (b) The [Federal agency](/usc/12/2282.md?p=1) guaranteeing [obligations](/usc/12/2282.md?p=2) purchased by the [Bank](/usc/12/2282.md?p=4) may contract to make periodic payments to the [Bank](/usc/12/2282.md?p=4) which shall be sufficient to offset the costs to the [Bank](/usc/12/2282.md?p=4) of purchasing [obligations](/usc/12/2282.md?p=2) of local public bodies or agencies upon terms and conditions as prescribed in this section rather than as prescribed by [section 2285 of this title](/usc/12/2285.md). Such contracts may be made in advance of appropriations therefor, and appropriations for making payments under such contracts are hereby authorized.

## Source credit

(Pub. L. 93–224, § 16, Dec. 29, 1973, 87 Stat. 941.)