Issuance of Letter-Of-Credit - (Rev. 5, 08-30-02)

100 - Issuance of Letter-Of-Credit - (Rev. 5, 08-30-02) A1-1416, B1-4414 The Letter-of-Credit, Standard Form-1193, authorizes a Federal Reserve Bank or Branch to advance funds to a designated commercial bank on behalf of CMS. Under the Checks Paid Method of financing, a letter-of-credit is issued to authorize the designated commercial bank to withdraw funds for deposit only to the contractor's Benefits Account when a bank presents a payment voucher (FMS-5401). Upon receipt of the properly executed signature cards and notification from the Federal Reserve Bank that the required collateral has been posted, CMS prepares and certifies a letter-of-credit in favor of the designated commercial bank. The certified letter-of-credit, together with the executed signature cards, are sent to the Treasury Department for forwarding to the servicing Federal Reserve Bank or Branch. A copy of the certified letter-of-credit and signature cards are also sent to the contractor, the RO, and the designated commercial bank.