National bank as guarantor or surety on indemnity bond.

CFR · 2024-01-01 · US · Title 12

(a) A national bank may lend its credit, bind itself as a surety to indemnify another, or otherwise become a guarantor (including, pursuant to 12 CFR 28.4, guaranteeing the deposits and other liabilities of its Edge corporations and Agreement corporations and of its corporate instrumentalities in foreign countries), if: (1) The bank has a substantial interest in the performance of the transaction involved (for example, a bank, as fiduciary, has a sufficient interest in the faithful performance by a cofiduciary of its duties to act as surety on the bond of such cofiduciary); or (2) The transaction is for the benefit of a customer and the bank obtains from the customer a segregated deposit that is sufficient in amount to cover the bank's total potential liability. A segregated deposit under this section includes collateral: (i) In which the bank has perfected its security interest (for example, if the collateral is a printed security, the bank must have obtained physical control of the security, and, if the collateral is a book entry security, the bank must have properly recorded its security interest); and (ii) That has a market value, at the close of each business day, equal to the bank's total potential liability and is composed of: (A) Cash; (B) Obligations of the United States or its agencies; (C) Obligations fully guaranteed by the United States or its agencies as to principal and interest; or (D) Notes, drafts, or bills of exchange or bankers' acceptances that are eligib

official document · source cfr-2024 · id 12:§ 7.1017