12 C.F.R. § 614.4710 Bankers acceptance financing.
Title 12 - Banks and Banking
The Funding Corporation is authorized to accept drafts or bills of exchange drawn upon banks for cooperatives and agricultural credit banks. With the exception of acceptances eligible for purchase by the Federal Reserve Banks under the direction and regulation of the Federal Open Market Committee and rediscounted, acceptances shall be subject to the provisions of subpart J of this part and must be combined with any other loan to the account party by the banks for cooperatives and agricultural credit banks for the purpose of applying the lending and leasing limits of §614.4355 of this part. (a) Limitations. (1) The Funding Corporation is authorized to accept drafts or bills of exchange drawn upon a bank for cooperatives or an agricultural credit bank having not more than 6 months' sight to run, exclusive of days of grace, that are derived from transactions involving the importation or exportation of agricultural commodities, farm supplies, or aquatic products into or out of the United States; or are derived from transactions involving the domestic shipment of goods that were produced from agriculture or commerical fishing or that have an agriculturally or aquatically related purpose; or are secured at the time of acceptance by title covering readily marketable staples. (i) The dollar amount of such acceptances outstanding at any one time to any one borrower, exclusive of participations sold to others, shall be limited to 10 percent of the net worth of a bank for cooperatives or an agricultural credit bank as calculated on a monthly basis after eliminating from its net worth an amount equal to the total of the bank's investments made to capitalize participation interests purchased by other institutions. However, if such acceptances are secured either by attached documents or by some other actual security growing out of the same transaction as the acceptance, the 10-percent limit shall not apply. (ii) The sum of all acceptance liabilities outstanding described in paragraph (a)(1) of this section, exclusive of participations sold to others, issued to all borrowers shall not exceed 150 percent of the bank for cooperatives' or agricultural credit bank's net worth, but the aggregate of acceptances growing out of domestic transactions shall not exceed 50 percent of net worth calculated on a monthly basis. (2) The limit specified in paragraph (a)(1)(i) of this section is separate from and in addition to the lending and leasing limits of §614.4355 of this part if the acceptances are rediscounted. (3) During any period within which a bank for cooperatives or an agricultural credit bank holds its own acceptance, having given value therefor, the amount thereof shall be included against the lending and leasing limits set forth in §614.4355 of this part of the customer for whom the acceptance was made. (4) The terms and requirements for the offering and purchase of participations in acceptance financing shall be the same as those for loans made under §614.4020(b) of this part. (5) When acceptances denominated in foreign currencies are not funded in the same currency, the bank for cooperatives or an agricultural credit bank shall take corresponding action to minimize foreign exchange risk. (b) Purchases of participations in bankers acceptances. (1) A bank for cooperatives or an agricultural credit bank shall determine limits on purchasing participations in discounted acceptances of another bank for cooperatives or an agricultural credit bank on the same basis as prescribed in §614.4355 of this part for purchasing participations in loans of another bank for cooperatives or an agricultural credit bank. (2) Participations in discounted acceptances shall be offered in accordance with §614.4020(b) of this part. (c) Funding Corporation. All acceptances created by the banks for cooperatives or agricultural credit banks shall be physically accepted by the Funding Corporation when intended for rediscount. [55 FR 24886, June 19, 1990, as amended at 57 FR 38250, Aug. 24, 1992; 58 FR 40324, July 28, 1993; 59 FR 37404, July 22, 1994; 62 FR 4445, Jan. 30, 1997; 64 FR 34518, June 28, 1999]
Title 12: Banks and Banking
PART 614—LOAN POLICIES AND OPERATIONS
Subpart Q—Banks for Cooperatives and Agricultural Credit Banks Financing International Trade
§ 614.4710 Bankers acceptance financing.
