Memo RM1994-14A
To: All Field Examiners
From: Kevin Glendening, Assistant Deputy Commissioner
Date: June 10, 1994
RE: Treatment of Municipal Repurchase Agreements
Several weeks ago you were sent an internal memo discussing the structure of repurchase agreements with municipalities in light of a recent Attorney General's opinion on the subject. Since that time we have completed additional research regarding the treatment of these repo agreements on the bank's books and for report purposes. The recordkeeping procedures described below and in the attached all bank mailing appear to be consistent with call reports, FDIC, and GAAP treatment of repos of this type. The attached memo is being sent to you for your review prior to distribution to the banks.
For examination report purposes, securities used in repurchase agreements will remain in the bank's securities accounton the asset side of the balance sheet with a footnote on the two page stating the dollar amount of securities held for repo that is included in the two page securities total. In addition, the footnote should contain a notation that securities held for repo are included in total securities throughout the report. The securities held for repo will be treated the same as any other security for the purposes of maturity distribution and interest rate risk. On the liquidity page, the securities held for repo will be included in the "Less: liabilities secured by any of above" category.
If you have comments or questions let us know.
