Maximize Collateral Capacity

last updated on Monday, November 23, 2020 in Member Services

Benefits of maximizing collateral pledged to the Bank:

1. Increase the liquidity of your balance sheet and your ability to utilize products from the Bank.
2. Maximize the Advance Equivalent (AE) value of collateral pledged.

In determining advance equivalent value or the borrowing capacity of pledged collateral, members have the most control over the amount of collateral pledged (UBP) and its eligibility (EF).

Analyze your Balance Sheet

Your relationship manager can help analyze your balance sheet to identify opportunities to add collateral types that can enhance your borrowing capacity. Pledge submissions can be updated at anytime throughout the reporting period.   

1. Review your current pledge. Are there eligible loans or securities you are not pledging? Consider adding to your existing pledge. 
2. Review your assets. Are there eligible loans or securities that you have not previously pledged? Consider pledging in new categories and type codes*. 

*Please note that when pledging a new type code you will receive an assumed or default Eligibility Factor for that type code until it is reviewed during your next regularly scheduled MCV.

Member Collateral Verification (MCV) Preparation

Your relationship manager can also provide some helpful suggestions on preparing for your next MCV review. This preparation can help you receive the highest Eligibility Factor (EF) possible or increase your EF from your last MCV review.

Ensure that you are pledging eligible loans in the correct type code and category. 

 Resource: COMMON CAUSES OF LOAN INELIGIBILITY

Utilize collateral resources:

• Use eligibility checklists for loans you have pledged to ensure your files meet the Bank’s eligibility requirements. 
• Review the Underwriting Assessment Matrix to understand how you can improve the lending rate on pledged collateral. 

Preview and prepare the list of loan files you will need to provide to the collateral review analyst to minimize potential exceptions.

• The loan listing provided for the MCV should not contain loans with amounts that were subtracted from the corresponding BBC. Maintain a listing of all loans comprising each subtraction made. 

Your relationship manager and the collateral operations team are here to assist you in preparation for your upcoming MCV. We will do our best to ensure that you have a successful review and that you receive the best EF possible.