[Code of Federal Regulations]
[Title 12, Volume 2]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 12CFR201.3]

[Page 6-7]
 
                       TITLE 12--BANKS AND BANKING
 
                   CHAPTER II--FEDERAL RESERVE SYSTEM
 
PART 201_EXTENSIONS OF CREDIT BY FEDERAL RESERVE BANKS (REGULATION A)--Table 
 
Sec.  201.3  Extensions of credit generally.

    (a) Advances to and discounts for a depository institution. (1) A 
Federal Reserve Bank may lend to a depository institution either by 
making an advance secured by acceptable collateral under Sec.  201.4 of 
this part or by discounting certain types of paper. A Federal Reserve 
Bank generally extends credit by making an advance.
    (2) An advance to a depository institution must be secured to the 
satisfaction of the Federal Reserve Bank that makes the advance. 
Satisfactory collateral generally includes United States government and 
federal-agency securities, and, if of acceptable quality, mortgage notes 
covering one-to four-family residences, state and local government 
securities, and business, consumer, and other customer notes.
    (3) If a Federal Reserve Bank concludes that a discount would meet 
the needs of a depository institution or an institution described in 
section 13A of the Federal Reserve Act (12 U.S.C. 349) more effectively, 
the Reserve Bank may discount any paper indorsed by the institution, 
provided the paper meets the requirements specified in the Federal 
Reserve Act.
    (b) No obligation to make advances or discounts. A Federal Reserve 
Bank shall have no obligation to make, increase, renew, or extend any 
advance or discount to any depository institution.
    (c) Information requirements. (1) Before extending credit to a 
depository institution, a Federal Reserve Bank should determine if the 
institution is an undercapitalized insured depository institution or a 
critically undercapitalized insured depository institution and, if so, 
follow the lending procedures specified in Sec.  201.5.
    (2) Each Federal Reserve Bank shall require any information it 
believes appropriate or desirable to ensure that assets tendered as 
collateral for advances or for discount are acceptable and that the 
borrower uses the credit provided in a manner consistent with this part.
    (3) Each Federal Reserve Bank shall:

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    (i) Keep itself informed of the general character and amount of the 
loans and investments of a depository institution as provided in section 
4(8) of the Federal Reserve Act (12 U.S.C. 301); and
    (ii) Consider such information in determining whether to extend 
credit.
    (d) Indirect credit for others. Except for depository institutions 
that receive primary credit as described in Sec.  201.4(a), no 
depository institution shall act as the medium or agent of another 
depository institution in receiving Federal Reserve credit except with 
the permission of the Federal Reserve Bank extending credit.

[Reg. A, 67 FR 67786, Nov. 7, 2002]