Collateral Verification

Overview

Collateral verification guidelines apply to all FHLB Dallas members on Blanket Lien status. At the end of each calendar year, we identify members who are subject to collateral verifications in the upcoming year.

The level of collateral verification FHLB Dallas performs for a member in a calendar year is based on the daily average amount of the member Blanket Lien usage during the previous calendar year.

Additional Documentation

Additional information related to collateral transactions may be found in the Collateral section in the Products and Services section of the Guides and Forms page of the Resource Center and in Collateral Verification Helpful Resources below.

A Two-Phased Approach to Verification

Collateral verification is conducted on two levels — onsite reviews and trial balance reviews.

• Onsite reviews require an FHLB Dallas representative to visit a member's location to perform a detailed evaluation of eligible collateral.
• A member with Blanket Lien usage during the prior calendar year will be subject to the appropriate collateral verification as outlined in the Member Products and Credit Policy.

This collateral service is only required in specific circumstances. FHLB Dallas does not require a collateral verification for a member with no Blanket Lien usage during the prior calendar year. Typically, a member will not have Blanket Lien usage during a calendar year because:

• The member had no outstanding advances or other extensions of credit to FHLB Dallas at any time during the calendar year.
• The member was on delivery collateral status and was complying with the requirements of delivery collateral status.
• The member had, at all times during the calendar year, delivered to FHLB Dallas eligible loans, securities and term deposits with a collateral value that exceeded the member’s outstanding advances and other extensions of credit.