Federal Reserve Vice Chair Philip Jefferson said the Fed’s efforts to modernize the discount window include business process improvements, automation enhancements, and coordination with the Federal Home Loan Banks.
Details: Speaking in New York, Jefferson said:
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Reserve banks recently took a step to simplify how banks pledge loans as collateral, including simplified forms, faster enrollment, automated pledged loan lists, and centralized resources so that institutions can easily find the information they need.
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The Fed in 2024 launched Discount Window Direct, a self-service online portal that allows banks to request loans, make payments, view loan and collateral information, and submit loan collateral files electronically.
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A key focus of the Fed has been reducing the time it takes to re-allocate collateral by enhancing interoperability between Reserve Banks and FHLBs.
ICBA Advocacy: In separate letters to the Fed on elements of its proposal related to discount window access and interest on reserve balances for payment account holders, ICBA in July said any payment account program should exclude holders from the discount window and not require the Reserve Banks to pay interest on balances.
Legislation: Modernizing discount window lending programs is a key part of the ICBA-supported Main Street Capital Access Act, which passed the House this summer.