News

Thanks for your feedback on our February 3, 2016, communication regarding the changes to our collateral verification process. Several members expressed concern on the loan level data reporting requirements related to scheduled collateral verifications (CV). Based on those concerns, we contacted our regulator and were able to obtain a compromise that will reduce the burden of providing the loan level data.

The questions and answers below are intended to provide information related to the compromise as well as what will be needed in conjunction with CVs moving forward.

• What compromise was reached?
• Our regulator understood the difficulty associated with providing loan level data on all loans reported on the QCD and agreed that we only need to collect the data on loans selected in conjunction with the CV (CV sample). This means that we will not be asking our members to complete the QCD Loan Support template each time they submit a QCD.
• How will the process work for providing the loan level data on the CV sample?
• We’re requesting that members provide the “Required” loan data fields as identified under the “Instructions” on the linked QCD Loan Support template (second tab of the template) for the loans that are included in the CV sample. The “Required” loan data fields include 18 data items that will assist in supporting the lending values of eligible collateral.
• In addition, if members have the ability to provide any of the “Preferred” loan data fields, we encourage you to do so because it will assist us in completing your CV in the most efficient and effective manner.
• What if I can’t provide all of the “Required” loan data fields being requested for the CV sample?
• That’s okay. Send us the loan data fields you can on the template. Our staff can collect the missing data during the review. Because this will likely take a little more time, the cost of the CV may be a little higher (we charge $125 per hour). As a result, the better long-term solution will be for members to develop an automated process for providing the data.
• Do I have to use the QCD Loan Support template?
• Only when preparing for your CV and only for the CV sample loans. Our preference is for you to use the QCD Loan Support template and provide the required and preferred loan data fields in the requested format. If needed, our staff can fill in any missing loan data fields as we conduct the CV. Having the data in the requested format will allow us to efficiently analyze the information and comply with our regulatory requirements at FHLBank.
• Do I have to supply the QCD Loan Support template when I submit my QCD form?
• No. The QCD Loan Support template will only be needed if your institution is selected for a CV. However, the regulatory environment is continuously changing, especially with the emphasis on enhancing transparency through additional reporting; therefore we encourage you to evaluate your ability to provide the loan data fields and work toward an automated solution as time permits or when systems or processes are enhanced.

We appreciate the help in better understanding the impact of providing the “Required” loan data fields. Hopefully this compromise will ease the burden while helping us meet our regulatory requirements. We value your membership in FHLBank Topeka and look forward to working together to ensure your ongoing access to liquidity. If you have any questions about the QCD Loan Support template or the collateral verification process, please contact Tom Bliss, Vice President and Director of Member Credit Analysis at 800.809.2733 ext. 6057, or Kylie Mergen, Assistant Vice President and Collateral Review Manager at 800.809.2733 ext. 6266.