Collateral arrangements will vary with borrower type and qualification, collateral availability and overall member borrowing. The Bank may require the delivery of collateral into its possession from any member at any time.

With the exception of securities delivered to the FHLBC or held by an independent third-party custodian acceptable to the FHLBC, all collateral securing credit shall be verified to be in compliance with the Advances Agreement and Collateral Policy. the verification shall be in a standard format provided by the FHLBC and will be conducted on a regular schedule as determined by the FHLBC. A collateral verification review conducted by the FHLBC will be required. Members pledging CFI collateral will be subject to an annual field review of such collateral conducted by the FHLBC.

Please refer to the collateral guidelines, located on eBanking, for complete details on our collateral policies.

Anti-Predatory Lending Collateral Policy

After all Primary Loan Collateral has been encumbered, the Bank will accept CFI Collateral from creditworthy Community Financial Institutions (members with average total assets at the end of each of the past three calendar years less than the regulatory level for CFIs, as defined by the Finance Board from year-to-year).

Eligible CFI Collateral includes mixed-use farm properties, as well as small farm, small business and small agri-business loans secured by real estate on which the business operates, or by Federal government guarantees that are assignable to, and can be realized upon by the Bank. Loans otherwise secured, (e.g., by inventory, accounts receivable, or machinery and equipment) will be considered only if the small farm or small business is able to demonstrate an ability to service the loans, as evidenced by historically adequate and ongoing cash flows. The Bank will select acceptable loans from a listing provided by the member. The Bank will only accept CFI loans that are current and have no significant history of delinquency.