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Collateral

What is Acceptable Collateral?

The following instruments are deemed acceptable pledges of collateral in the Pooled Collateral Program:
  1. United States Treasury obligations;
  2. Mortgage-backed securities (Federal National Mortgage Association discount notes, primary debt instruments or debentures) with a remaining maturity of 15 years or less;
  3. Federal Home Loan Bank system consolidated bonds and discount notes issued in book-entry form;
  4. Federal Home Loan Bank Beneficiary Letters of Credit;
  5. Federal Farm Credit Banks consolidated system-wide bonds and discount notes issued in book-entry form;
  6. Government National Mortgage Association securities;
  7. Federal Home Loan Mortgage Corporation discount notes and primary debt instruments or debentures, and only those mortgage-backed securities with a remaining maturity of 15 years or less;
  8. State of Texas bonds issued by various state agencies and four year educational institutions of the State of Texas; and
  9. Municipal bonds issued by governmental entities of the State of Texas with a rated investment quality by a nationally recognized investment rating firm of not less than "A" or its equivalent. By way of illustration, and not limitation, governmental entities include independent school districts, junior colleges, incorporated cities, certain road districts, certain municipal water and/or utility districts, hospital districts (excluding health facility bonds), and water and air pollution control districts.
The following instruments are not deemed acceptable to be pledged as collateral in the Pooled Collateral Program:
  1. Adjustable rate mortgages (ARM);
  2. Collateralized mortgage obligations (CMO);
  3. Step-up securities;
  4. Variable rate securities; and
  5. Securities not found on common pricing systems.

At its discretion the Comptroller may add or remove its designation of acceptable collateral from time to time as appropriate, to protect the deposit of public funds and the integrity of the Pooled Collateral Program. A participating depository institution may request the Comptroller's approval to pledge an instrument that is not currently deemed as acceptable collateral.

For Further Information

If you have any questions about the Pooled Collateral Program, please feel free to contact our staff at (800) 531-5441, extension 3-6069 or 3-5902, or you may dial directly at (512) 463-6069 or (512) 463-5902.

You may also email any questions to:

collateral@cpa.state.tx.us

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