Pending Establishment of the Standing Credit Facility | M-003

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Establishment of the Standing Credit Facility​

Motion No.: M-003-MAR-2026
Category: Monetary Operations
Legal Basis: Federal Reserve Act (FRA) §§ 4, 5, 6, 8, 9 & 11

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WHEREAS​

The Federal Reserve Bank of Redmont is mandated under the Federal Reserve Act to provide liquidity facilities to regulated financial institutions in order to promote stability and orderly functioning of the financial system; and

WHEREAS​

Deposit-taking financial institutions may experience short-term liquidity needs arising from fluctuations in deposits, payment settlements, or lending activity; and

WHEREAS​

The Federal Reserve Board has determined that a structured and transparent credit facility will support financial stability while ensuring appropriate oversight and risk management;

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NOW, THEREFORE, BE IT RESOLVED THAT​

1. The Federal Reserve Board hereby establishes Policy M-003 creating a Standing Credit Facility available to eligible deposit-taking financial institutions.
2. Any deposit-taking financial institution regulated by the Federal Reserve Bank of Redmont shall be eligible to apply for access to the Standing Credit Facility.
3. Institutions seeking access to the facility must submit an audited financial statement demonstrating their financial position and operating performance. The Federal Reserve Bank of Redmont may require additional documentation as part of its eligibility review.
4. The maximum credit limit available to an eligible institution shall be determined as a multiple of the institution’s monthly income.
5. Unless otherwise determined by the Federal Reserve Bank of Redmont, the standard credit limit shall be calculated as eight (8) times the institution’s most recent monthly income.
6. The Federal Reserve Bank of Redmont retains the authority to adjust or restrict credit limits based on supervisory assessments, financial condition, or risk considerations.
7. Credit extended under the Standing Credit Facility shall bear interest at the Bank Rate as established by the Federal Reserve Board.
8. The applicable rate shall automatically adjust in accordance with any changes to the Bank Rate.
9. Access to the Standing Credit Facility shall be subject to review and approval by the Federal Reserve Bank of Redmont’s Risk and Compliance Team.
10. Institutions approved for the facility may be required to satisfy additional performance obligations or prudential conditions determined at the time of contract. Such conditions may include reporting requirements, liquidity management standards, or other supervisory safeguards deemed necessary to protect the stability of the financial system.
11. The Federal Reserve Bank of Redmont reserves the right to suspend, modify, or terminate access to the Standing Credit Facility for any institution that fails to comply with applicable policies, contractual obligations, or regulatory requirements.

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VOTING​

This motion shall be adopted upon approval by a simple majority of the sitting members of the Federal Reserve Board.
In the event of a tie, the Secretary of the Department of Commerce shall cast the deciding vote, pursuant to the Federal Reserve Act.

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EFFECTIVE DATE​

This motion shall take effect immediately upon passage and shall apply to all deposit-taking financial institutions seeking credit following its adoption.