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As we stated in our March 13, 2023 Client Alert, the Federal Reserve issued a press release on March 12, 2023, announcing the creation of the new Bank Term Fund Program (“BTFP”). The Federal Reserve established the BTFP to make available additional funding to eligible depository institutions in order to help assure that banks have the ability to meet the needs of all their depositors.

On March 13, 2023, the Federal Reserve released FAQs to address questions about how the BTFP will work and who is eligible to participate. 

Overview of the BTFP

Federal Reserve Banks will offer loans of up to one year in length to “Eligible Borrowers.” Eligible Borrowers will pledge US Treasuries, agency debt and mortgage‐backed securities, and other qualifying assets as collateral. The collateral will be valued at par value or equal to the outstanding face amount of the collateral. There are no fees to participate in the BTFP and no penalties for prepayment. The loans are made with full recourse to the Eligible Borrower beyond the pledged collateral. The Department of the Treasury will make available up to $25 billion as a backstop for the BTFP; however, the Federal Reserve stated that it does not anticipate needing to draw on the backstop funds. As of now, the BTFP is schedule to end on March 11, 2024.

Who is eligible to participate in the BTFP?

An “Eligible Borrower” under the BTFP is any US federally insured depository institution (including a bank, savings association or credit union) or US branch or agency of a foreign bank that is eligible for “primary credit” under the Federal Reserve discount window. Under 12 C.F.R. § 201.4(a), a depository institution is eligible for “primary credit” under the Federal Reserve’s discount window if the Federal Reserve Bank determines that the depository institution is in generally sound financial condition. 

Depository institutions that are eligible for secondary credit and non-depository institutions are not eligible to participate in the BTFP.

There is no limit on the number of extensions that Eligible Borrowers can obtain under the BTFP. Eligible Borrowers may borrow up to the par value of all eligible collateral that it can pledge to the Federal Reserve.

How does an Eligible Borrower Obtain an Advance?

A depository institution should contact the Reserve Bank in whose District it is located to request an advance under the BTFP. In order to obtain an advance under the BTFP, Eligible Borrowers must:

  • Submit a request using a standard template email to its lending Reserve Bank at the time it requests its first advance under the BTFP. The template will be available at
  • Provide any Operating Circular No. 10 documentation that a Federal Reserve Bank requires immediately upon the Federal Reserve Bank’s request (only if the Eligible Borrower has not previously agreed to the terms of the Federal Reserve Bank’s Operating Circular No. 10).
  • Have a master account at a Federal Reserve Bank or have a correspondent relationship with an institution that has a master account into which the proceeds of the BTFP extensions of credit can be credited and repaid. Eligible Borrowers that have discount window borrowing documentation in place and are eligible for primary credit will be able to borrow from the BTFP immediately.

Eligible Borrowers should contact the Federal Reserve Bank in whose District they are located to determine whether additional documentation is necessary and for detailed information on the documentation requirements.

How is the BTFP different from “primary credit” under the main discount window lending program for depository institutions?

Here is a chart setting forth the main ways that the BTFP differs from primary credit lending under the Federal Reserve’s discount window:

Bank Term Funding Program Chart


Under §11(s) of the Federal Reserve Act, the Federal Reserve will publicly disclose information concerning the facility one year after the BTFP ends, which is currently scheduled to end on March 11, 2024. The Federal Reserve’s disclosures under the BTFP will be consistent with the disclosures it made, beginning in 2020, under the Primary Dealer Credit Facility, Commercial Paper Funding Facility and Money Market Mutual Fund Liquidity Facility. This disclosure will include names and identifying details of each participant in the facility, the amount borrowed, the interest rate or discount paid, and information concerning the types and amounts of collateral pledged or assets transferred in connection with participation in the facility.

On an aggregate basis, balance sheet items related to the BTFP will be reported weekly on the H.4.1 statistical release titled, “Factors Affecting Reserve Balances of Depository Institutions and Condition Statement of Federal Reserve Banks,” published by the Federal Reserve.

We intend to monitor the situation and developments, and will keep you updated as additional information becomes available.