§2294 Payments on behalf of public bodies

Summary

When the Bank buys debt from a local public agency, it must do so in a way that does not raise that agency’s borrowing costs. The head of the federal agency that guarantees the debt, working with the Secretary of the Treasury, must estimate what the agency’s borrowing costs would be if the Bank did not buy the debt. The guaranteeing agency may agree to make regular payments to the Bank to cover the Bank’s extra costs for buying the debt under these rules instead of the usual method. Those payment agreements can be made before money is approved by Congress, and Congress may fund those payments.