Bank Notes

In this Q&A with Anthony King, Managing Director of the Member and Collateral Review team at FHLBank San Francisco, Anthony shared his collateral insights with Amanda Howard, Director, MPF Credit.

Q: Hi Anthony, thanks for giving us some of your time today. We’re all excited to learn more about your department. Can you give us a quick overview of the Member & Collateral Review team?

FHLBank San Francisco is a secured lender that extends credit to members, in the form of advances and letters of credit. “Secured” means that all borrowings and LCs must be fully collateralized. Because the Bank must periodically examine pledged loans to assess their liquidation value, our Collateral Asset Managers, aka CAMs, regularly visit members to review their pledged mortgage collateral and do a general check-in with the member.

To help the Bank better understand our members’ needs, we also gather intelligence about member loan portfolios by conducting regular surveys, with topics such as the impact of COVID-19, CECL preparedness, LIBOR transition, and lending and deposit strategies.

Our department also approves and monitors third-party vendors used by our members for mortgage collateral, such as custodians, servicers, investors, and eVaults. These vendors help members manage and control collateral pledged to the Bank.

Q: Thanks for the refresher. Could you talk a little more about visits to members by CAMs?

Glad to. Typically, every 12 to 36 months CAMs will conduct onsite collateral field reviews for member depository institutions that have pledged loan collateral to the Bank (non-depository members are subject to a pre-pledge eligibility review before submitting collateral). The CAMs will inspect the physical collateral for compliance with Bank policy and conduct interviews focused on results of the review, understanding members' products and lending strategies, and relevant market outlook.

CAMs also use the field review process to learn what changes members want to see the Bank make to policies and educate the member on Bank products and services. We want to know what is on each member's mind and what the Bank can do to help them with new opportunities to grow their business. Past member feedback has prompted the Bank to develop and implement products and programs, like eNotes, and to accept church loans and Loans-Held-For-Sale as collateral.

Q: With such a focus on member interaction and onsite visits, how did your team adapt to COVID-19 restrictions?

Great question. Typically, our CAMs travel to member institutions to conduct onsite field reviews, to physically inspect the collateral, and to have that great one-on-one time with the member. My team has done a fantastic job adjusting to COVID-19 travel restrictions while maintaining the collateral risk review schedule. We seamlessly transitioned to virtual collateral verification reviews by working with our members to scan the required documents, and my team worked with our IT team to develop a secured file transfer portal to facilitate the delivery of electronic files. We successfully conducted interviews over Zoom and also used Zoom and chats to keep our team connected and share information.

Q: What is in store for the Member & Collateral Review team?

Because of the success of the virtual reviews, we anticipate performing more virtual collateral assessments than we have done historically. We are grateful to our members, who gave their own time and talent to make the virtual collateral review process work during the height of the COVID-19 pandemic. Many members that don’t normally image their files worked nights and weekends performing document scans to accommodate the Bank's virtual reviews.

Q: Thank you so much for sharing details on the CAMs business scope and purpose. How can members connect with their CAM?

Members can log on to the Bank’s Member Portal and quickly locate their CAM on the main dashboard page – you’ll see the CAM’s picture with their contact information.

Q: Before we go, what’s one thing you’d like our members to know about the Member & Collateral Review team?

The Member & Collateral Review team is here to help members maximize borrowing capacity through education about the pledging process and Bank products.

December 2021 | FHLBank San Francisco