Monthly Report on Credit and Liquidity Programs
and the Balance Sheet

Appendix C

Federal Reserve Disclosure Requirements and Other Provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act

On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") was signed into law.⁷ The Dodd-Frank Act includes changes that are designed to promote transparency while protecting monetary policy independence and the efficacy of the Federal Reserve's liquidity programs and open market operations (OMOs). In addition, the Dodd-Frank Act modifies the Federal Reserve's authority to provide emergency liquidity to nondepository institutions under Section 13(3) of the Federal Reserve Act in light of other amendments that provide the U.S. government with new authority to resolve failing, systemically important nonbank financial institutions in an orderly manner.

Under the provisions of the Dodd-Frank Act, the Federal Reserve must disclose certain information, by December 1, 2010, about entities that received loans or other financial assistance under a Section 13(3) credit facility between December 1, 2007, and July 21, 2010.⁸ Disclosure is also required for persons or entities that participated in the agency mortgage-backed securities (MBS) purchase program, used foreign currency liquidity swap lines, or borrowed through the Term Auction Facility (TAF) during that time frame. Information to be disclosed will include the identity of each entity to which the Federal Reserve has provided assistance; the type, value, and dates of the assistance; the specific terms of any repayment expected, including the repayment time period, interest charges, collateral, limitations on executive compensation or dividends, and other material terms; and the specific rationale for each such facility or program.

The Dodd-Frank Act also establishes a framework for the delayed disclosure of information on entities that, after July 21, 2010, received a loan from the discount window under Section 10B of the Federal Reserve Act or from a Section 13(3) facility, or participated in OMO transactions. Generally, this framework requires the Federal Reserve to publicly disclose certain information about these discount window borrowers and OMO counterparties approximately two years after the relevant loan or transaction; information about borrowers under future Section 13(3) facilities will be disclosed one year after the authorization for the facility is terminated. Information to be disclosed will include the names and identifying details of each borrower or counterparty, the amount borrowed, the interest rate paid, and information identifying the types and amounts of collateral pledged or assets transferred in connection with the borrowing or transaction.

The Federal Reserve plans to implement these new disclosure requirements in a timely and effective manner.

Going forward, any emergency lending programs and facilities authorized by the Federal Reserve under Section 13(3) of the Federal Reserve Act must have broad-based eligibility, and must be approved by the Secretary of the Treasury.

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