WASHINGTON - Community banks may pledge agricultural and small business loans as collateral for advances from the Federal Home Loan banks under a regulation approved Thursday.

As required by the Gramm-Leach-Bliley Act of 1999, the Federal Housing Finance Board unanimously adopted a rule that enables banks with less than $500 million of assets to pledge additional classes of collateral and use the advances to make a broader range of loans. Analysts estimate that approximately $400 billion in additional collateral may become eligible under the new rule.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.