Title 12 — Banks and BankingRelease 119-73not60
§2294 Payments on Behalf of Public Bodies
Title 12 › Chapter 24— FEDERAL FINANCING BANK › § 2294
Summary
The Bank must buy obligations from U.S. local public bodies without causing those bodies to pay higher borrowing costs. The federal agency that guarantees those obligations, together with the Secretary of the Treasury, must estimate what borrowing costs the local body would have faced if it had not sold to the Bank. The guaranteeing agency may make periodic payments to the Bank to cover the Bank’s extra costs, and Congress may provide money to make those payments.
Full Legal Text
Title 12, §2294
Banks and Banking — Source: USLM XML via OLRC
(a)Notwithstanding any other provision of this chapter, the purchase by the Bank of the obligations of any local public body or agency within the United States shall be made upon such terms and conditions as may be necessary to avoid an increase in borrowing costs to such local public body or agency as a result of the purchase by the Bank of its obligations. The head of the Federal agency guaranteeing such obligations, in consultation with the Secretary of the Treasury, shall estimate the borrowing costs that would be incurred by the local public body or agency if its obligations were not sold to the Bank.
(b)The Federal agency guaranteeing obligations purchased by the Bank may contract to make periodic payments to the Bank which shall be sufficient to offset the costs to the Bank of purchasing obligations of local public bodies or agencies upon terms and conditions as prescribed in this section rather than as prescribed by section 2285 of this title. Such contracts may be made in advance of appropriations therefor, and appropriations for making payments under such contracts are hereby authorized.
Reference
Citations & Metadata
Citation
12 U.S.C. § 2294
Title 12 — Banks and Banking
Last Updated
Apr 3, 2026
Release point: 119-73not60