12 CFR § 1266.5 - Terms and conditions for advances.
(b)Advance pricing -
(i) The marginal cost to the Bank of raising matching term and maturity funds in the marketplace, including embedded options; and
(ii) The administrative and operating costs associated with making such advances to members.
(B) Other reasonable criteria that may be applied equally to all members.
(ii) Each Bank shall include in its member products policy required by § 917.4 of this title, standards and criteria for such differential pricing and shall apply such standards and criteria consistently and without discrimination to all members applying for advances.
(i) A Bank's CICA programs; and
(c)Authorization for pricing advances.
(1) A Bank's board of directors, a committee thereof, or the Bank's president, if so authorized by the Bank's board of directors, shall set the rates of interest on advances consistent with paragraph (b) of this section.
(d)Putable or convertible advances -
(1)Disclosure. A Bank that offers a putable or convertible advance to a member shall disclose in writing to such member the type and nature of the risks associated with putable or convertible advance funding. The disclosure should include detail sufficient to describe such risks.
(2)Replacement funding for putable advances. If a Bank terminates a putable advance prior to the stated maturity date of such advance, the Bank shall offer to provide replacement funding to the member, provided the member is able to satisfy the normal credit and collateral requirements of the Bank for the replacement funding requested.
(3)Definition. For purposes of this paragraph (d), the term putable advance means an advance that a Bank may, at its discretion, terminate and require the member to repay prior to the stated maturity date of the advance.