Standby Letters of Credit

Our LCs can be used as an alternative to securities collateral for securing public unit deposits in excess of the level insured by the Federal Deposit Insurance Corporation (FDIC). Within our district of Delaware, Pennsylvania and West Virginia, the use of LCs is permitted to secure public funds held by municipalities, school districts and other public depositors. In fact, LCs issued by FHLBank Pittsburgh are acceptable collateral in 47 states, the District of Columbia and the U.S. Virgin Islands.

To be sure that a customer and its deposits meet the Federal Deposit Insurance Corporation's (FDIC's) definitions of a "public unit," please visit www.fdic.gov/deposit/deposits/factsheet.html.

To support our members' business development efforts, FHLBank Pittsburgh members can access a printable LC Beneficiary Flyer to help attract and retain public unit customers and prospects. This flyer may be customized with a logo and specific call-to-action.

Confirming LCs function as a second-pay arrangement in which a member has issued its own LC and is seeking to improve the credit terms of the transaction by leveraging FHLBanks Aa1/AA+ rating (Moody's/S&P).

These can be valuable tools to support a member's community lending activities, including arranging financing to support bond issuances for community and economic development projects as well as affordable housing projects. Confirming LCs issued by FHLBank Pittsburgh can also be used to support other member obligations to third parties.

A Direct Pay LC provides members with an option to enhance credit terms of transactions by using FHLBank Pittsburgh as the primary payment source. This can be advantageous where the beneficiary requires the payment source to carry a high-quality credit rating with a low degree of risk.

Master LCs allow members to support the fluctuating deposit balances of multiple public entities via a trust arrangement. View the Master LC flyer for more information.

An electronic signature (sometimes referred to as an e-signature) is the process by which a document is signed online, where a software product creates the signature that is placed on the document.

FHLBank Pittsburgh and its third-party vendor use encryption, user validation, and time stamps to maintain authenticity of the electronic signatures.

No, FHLBank Pittsburgh will work directly with any solvent member in the event of a draw request.

At this time, only the issuance of the LC will be in electronic form. Beneficiaries should continue to follow the existing draw practice as detailed in the LC. 

When requesting an LC, the member may elect delivery via email to up to five recipients (i.e., five unique email addresses). In addition, a copy can be emailed directly to the user requesting the LC based on the email address associated with the user’s online banking profile. Alternatively, the member may elect not to distribute via email. In this case, it is the member’s obligation to access the documents via online banking and manually save and distribute to beneficiaries.