Standby Letter of Credit

Standby Letter of Credit

Request a Federal Home Loan Bank of Des Moines Standby Letter of Credit (LOC) to give a municipality or state that is depositing funds with your institution peace of mind that their deposits are protected in excess of the maximum FDIC-insured amount.

Standby Letters of Credit Have Multiple Uses:
  • Collateralize state, city or municipal deposits
  • Facilitate residential housing finance
  • Support construction lending
  • Facilitate community lending
  • Confirm non-housing, taxable and tax-exempt housing bond issuances
Standby Letters of Credit

Standby Letters of Credit

Did you know Standby Letters of Credit from Federal Home Loan Bank of Des Moines may provide an alternative source of collateral for securing Public Unit Deposits, thus improving your liquidity, income and efficiency?


  • Improved on-balance sheet liquidity by keeping your Treasury and Agency securities unencumbered
  • Eliminate the need to match securities and monitor margin calls 
  • Reduce operational expenses associated with monitoring deposits 
  • Keep your regulator satisfied with your liquidity position and ratios


  • AAA-rated
  • Competitive pricing
  • Easy application process

Requesting Standby Letters of Credit

To get started, member institutions must submit a Letter of Credit application. 

Complete an LOC Application 

Aaron Kness
Retaining public unit deposits is a major part of our bank’s business model. Letters of credit have helped us continue to grow into profitable business lines. The tool has helped us convert our earning assets mix away from Treasuries and Agency securities into building our loan portfolio. The beauty of the letter of credit product is the ability to create more collateral to pledge to FHLB Des Moines. It’s a no-brainer if you are growing your bank.
Aaron Kness
President and CEO of Iowa State Bank & Co.