Federal Reserve Encourages Credit Unions to Use Discount Window to Meet Demands for Credit

Recent events associated with the pandemic have highlighted the significance of lending to depository institutions to support liquidity and stability within the financial system.

Federal Reserve Richmond280x210The Federal Reserve encourages credit unions to turn to the discount window in order to meet the demands for credit from households and business. In keeping with this sentiment the Board of Governors announced on March 16 the primary credit rate was lowered to 0.25% and also announced that depository institutions may borrow from the discount window for periods as long as 90 days, pre-payable and renewable by the borrower on a daily basis. These discount window changes will remain in effect until the Federal Reserve announces otherwise.

Many credit unions are already positioned to borrow, with executed discount window lending agreements and pledged collateral. For those that haven’t taken the necessary steps to borrow from the Fed, Credit Risk Management staff is available to help establish borrowing arrangements. They ask that you direct your institutions first to the FRBdiscountwindow.org website for information about completing the lending agreements and pledging collateral. Instructions for completing the agreements can be found under Select Your District -> Richmond. In addition, answers to frequently asked questions can be found under General Information -> Frequently Asked Questions. Specific questions about completing the forms or pledging collateral can be directed to the Credit Risk Management staff, who can be reached using the FRB Richmond Discount Window toll-free number 800-526-2036.


Federal Reserve Actions to Support the Flow of Credit to Households and Businesses
https://www.federalreserve.gov/newsevents/pressreleases/monetary20200315b.htm

Federal Reserve Discount Window FAQs
https://www.frbdiscountwindow.org/pages/general-information/faq