301.03A

Eligible Depository

Requirements

You must ensure all Custodial AccountsCustodial AccountsAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. are demand deposit or money market accounts maintained at an Eligible Depository.  An Eligible Depository is:

  • a Federal Reserve Bank;
  • a Federal Home Loan Bank; or
  • depository institution if it complies with the following.
Depository Institution... Must...
Accounts

Be insured by the

 

  • Federal Deposit Insurance Corporation, or
  • National Credit Union Share Insurance Fund.
Rating

Have an applicable Federal or State rating of 

 

  • “well capitalized”, or
  • if unrated, meet the capital requirements for a “well capitalized” rating.
Minimum Financial Ratings for Assets $20 Billion or More
  • If rated by both S&P and Moody’s, meet all of the following:
    • for S&P:
      • an “A-2” short-term issuer rating; and
      • a “BBB” long-term issuer rating; and
    • for Moody’s:
      • a “P-3” short-term bank deposit rating; and
      • a “Baa2” long-term bank deposit rating.
  • If only rated by S&P, have:
    • an “A-2” short-term issuer rating; and
    • a “BBB” long-term issuer rating.
  • If only rated by Moody’s, have:
    • a “P-3” short-term bank deposit rating; and
    • a “Baa2” long-term bank deposit rating.
Minimum Financial Ratings for Assets Less than $20 Billion

Meet at least 1 of the following:

 

  • For S&P:
    • an “A-2” short-term issuer rating; and
    • a “BBB” long-term issuer rating.
  • For Moody’s:
    • a “P-3” short-term bank deposit rating; and
    • a “Baa2” long-term bank deposit rating.
  • For IDC Financial Publishing, Inc., or its successor, a 175.
  • For Kroll Bond Rating Agency, Inc., or its successor, a C+.

Operating Procedures

You may establish the account within your own institution if you

  • are an Eligible Depository, and
  • do not use your general ledger or internal operating account for Custodial AccountsCustodial AccountsAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. .