Frequently Asked Questions About Capital Stock Purchases

For Advances: The required capital stock amount will be debited at the time that the advance is disbursed rather than waiting until end-of-day processing.

For Letters of Credit: The required capital stock amount will be debited on the effective date at the time of approval rather than waiting until end-of-day processing.

The actual stock purchase to your Stock Account (Type 250) will continue to occur during normal end-of-day processing.

At the end of the day, the Total Stock Investment Requirement (TSIR) will be reassessed and the intraday charge to the primary deposit account will be reversed and offset by a corresponding capital stock transaction in members’ capital stock accounts.

Yes, unless excess capital stock is available to cover the stock requirement and/or you have sufficient funds in your deposit account to fund the capital stock requirement. The following scenarios explain the process in more detail:

A member with excess capital stock: If a member initiates a $10 million overnight advance which requires $300,000 in capital stock, but already holds at least $300,000 in excess capital stock, the full advance will be disbursed, and no funds will be debited from the member’s IDEAL Way account because the required stock is already held as excess in their capital stock account.

A member without excess capital stock with funds in their IDEAL Way account: If a member initiates a $10 million overnight advance and has no excess capital stock and has a $500,000 IDEAL Way account balance, the full advance will be disbursed, and $300,000 will be immediately debited from their IDEAL Way account for the required stock purchase. Because the account balance covers the stock requirement, the full advance proceeds remain available.

A member without excess capital stock and no funds in their IDEAL Way account: If a member initiates a $10 million advance and has no excess capital stock and has a zero IDEAL Way account balance, the full advance will be disbursed, and $300,000 will be immediately debited from the IDEAL Way account for the required stock purchase. As a result, $9,700,000 will be available in their IDEAL Way account.

If you have some excess stock and cash available but it is still not sufficient to cover the full capital stock requirement, the difference will be debited from your IDEAL Way account after the full disbursement of the advance proceeds.

The wire request will not be released until the capital stock requirement is funded with either cash available in the IDEAL Way account or the member’s approved IDEAL Way Line of Credit.

FHLBank Boston will determine whether the overdraft can be covered by an approved IDEAL Way Line of Credit or requires an overdraft transaction. The overdraft transaction amount will include any capital stock requirement. All overdraft transactions are issued in increments of $1,000 and automatically mature to the IDEAL Way account the next business day.

Overdrafts of $100.00 up to $999.99 will be covered by a $1,000 advance, the minimum advance increment issued by the Bank. If the overdraft exceeds the approved IDEAL Way Line of Credit, the member will see two transactions on their account detail reports. One transaction may cover the amount within the approved IDEAL Way Line of Credit and another may cover the amount above the approved line.

The transactions may appear separately on detailed activity but may be combined when outstanding balances are summarized by product type.

Published overdraft penalties and fees still apply.

The member will receive:

• A transaction up to the approved IDEAL Way Line of Credit, and
• An additional transaction for the amount overdrawn above the approved line.

The capital stock requirement will be included when calculating the amount needed to cover the account.

After the existing rollover sweep process, an eligible negative secondary IDEAL Way account (excluding Security Corp accounts) will be credited to zero, and the corresponding amount will be debited from the member’s primary IDEAL Way account.

Yes, all member deposit accounts will close the day at either zero or a positive balance because as noted above, the secondary deposit accounts will be swept to a zero balance if they are in a negative state, and the primary IDEAL Way accounts will receive the IDEAL Way Line of Credit transaction.

The above will not apply to:

• Overdrafts on former-member accounts or Security Corp accounts, and
• Overdrafts caused by certain service fees posted after IDEAL Way advance processing on the last calendar day of the month or a nonbusiness day.

Yes. All new transactions will be reflected on daily debit and credit advice and reports.