STATUTES & REGULATIONS

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Acceptable Collateral for Special Direct Investment (SDI) Program

Unless specified otherwise, to secure your Special Direct Investment (SDI) balances, you may only pledge:

  • One to four family mortgages;
  • Insured student loans or notes representing education loans insured or guaranteed under a program authorized under Title IV of the Higher Education Act of 1965, as amended, or Title VII of the Public Health Service Act, as amended; or
  • Commercial loans.

In addition, all pledged collateral must be acceptable by the Federal Reserve System to secure borrowings from a Federal Reserve Bank for its Borrower-In-Custody (BIC) program. Please contact your local Federal Reserve Bank for more information regarding a BIC arrangement.

Acceptable collateral will be valued based on the type of collateral as described using the valuation methods applied by the Federal Reserve System, at the direction of the Treasury. The assigned value typically employs a market valuation methodology.