The 11 Federal Home Loan Banks (FHLBanks) are developing a solution that will pave the way for our members to pledge eNotes as eligible collateral. As member-owned cooperatives, we recognize and understand the value and benefits that eNotes provide, both to our nearly 6,900 member institutions and to the customers they serve. 

The FHLBanks have created Electronic Promissory Notes (eNotes) Model Collateral Acceptance Requirements and Guidelines, a common set of core requirements for accepting eNotes as collateral. These guidelines are based on federal law pertaining to electronic signature transactions, and set forth standards relating to eSignatures, eNote documentation, eClosings, eRegistry requirements, eNote vault requirements, and servicing system requirements. We will update our Collateral Guidelines accordingly and share once they are approved.

The FHLBanks have made significant progress in arriving at a systemwide solution for storage of eNotes, and are in the process of finalizing this important milestone. Once this process is complete, the FHLBanks will be able to set a timetable for providing collateral value. However, since each individual FHLBank has its own systems, processes, and policies regarding collateral, implementation timelines will vary.

At FHLBank Chicago, we anticipate the acceptance of eNotes as collateral in 2020 with more information coming soon. In the initial phase of accepting eNotes as pledged collateral, only certain types of mortgage loans are eligible: 1-4 Family mortgage loans and closed end term 2nd mortgage loans.

For more information about eNotes, please see the below materials, including a webinar, video, and eNotes readiness checklist.

• System Webinar: Understanding eNotes
• FHLBank Future Acceptance of eNotes Video
• eNotes Readiness Checklist

If you have any questions, please contact your Sales Director or the Collateral Team at collateral@fhlbc.com or 1-855-345-2244, option 3.