January 15, 2021
Bulletin No: 2021-01

Certification Requirements on LIBOR-Indexed Loan Collateral and Interagency Guidance Confirmation

In 2021, the Federal Home Loan Bank of Dallas (Bank) will continue to require certifications of loan collateral indexed to the London Interbank Offered Rate (LIBOR). The purpose of the LIBOR-Linked Mortgage Certification is to monitor the Bank’s exposure to loan collateral pledged by members that is indexed to LIBOR, which is expected to be phased out. In anticipation of the phaseout, loan collateral linked to LIBOR with a maturity date beyond 2021 may be subject to future pricing and/or haircut adjustments.

All institutions currently pledging loans indexed to LIBOR with a maturity date beyond 2021 will be required to provide a quarterly LIBOR-Linked Mortgage Certification to report the aggregate unpaid balance of such loans. Members subject to the quarterly reporting requirement will be notified in writing no later than February 28, 2021.

Quarterly Certification Deadlines
- First-quarter 2021 certification due on April 30
- Second-quarter 2021 certification due on July 31
- Third-quarter certification due on October 31
- Fourth-quarter certification due on January 31, 2022

The certification template is available under Guides & Resources on SecureConnect. Certifications should be emailed to igc@fhlb.com by each quarter’s due date.

Institutions that, in 2020, reported no loans indexed to LIBOR with a maturity date beyond 2021 will be required to submit a one-time LIBOR-Linked Mortgage Certification confirming they have not acquired or originated loans indexed to LIBOR.

Separately, the Bank is required by its regulator, the Federal Housing Finance Agency, to have all members annually confirm the amount of subprime and nontraditional residential mortgage loans that have been pledged as collateral to the Bank. The Interagency Guidance Confirmation (IGC) is due no later than November 30.

If your institution is scheduled to receive a collateral verification in 2021, the Bank will collect the IGC and the one-time LIBOR-Linked Mortgage Certification as part of the collateral verification process from those members that have not already submitted it for 2021. Members may find a link to the template on SecureConnect and can be emailed to igc@fhlb.com.

Please contact Collateral Services at collateral@fhlb.com or 800.541.0597 with questions.

Sincerely,

Gustavo Molina
SVP and Chief Banking Operations Officer