Section 1266.5 - Terms and conditions for advances(a)Advance maturities. Each Bank shall offer advances with maturities of up to ten years, and may offer advances with longer maturities consistent with the safe and sound operation of the Bank.(b)Advance pricing - (1)General. A Bank shall not price its advances to members below:(i) The marginal cost to the Bank of raising matching term and maturity funds in the marketplace, including embedded options; and(ii) The administrative and operating costs associated with making such advances to members.(2)Differential pricing.(i) Each Bank may, in pricing its advances, distinguish among members based upon its assessment of: (A) The credit and other risks to the Bank of lending to any particular member; or(B) Other reasonable criteria that may be applied equally to all members.(ii) Each Bank shall include in its member products policy required by § 917.4 of this title, standards and criteria for such differential pricing and shall apply such standards and criteria consistently and without discrimination to all members applying for advances.(3)Exceptions. The advance pricing policies contained in paragraph (b)(1) of this section shall not apply in the case of: (i) A Bank's CICA programs; and(ii) Any other advances programs that are volume limited and specifically approved by the Bank's board of directors.(c)Authorization for pricing advances.(1) A Bank's board of directors, a committee thereof, or the Bank's president, if so authorized by the Bank's board of directors, shall set the rates of interest on advances consistent with paragraph (b) of this section.(2) A Bank president authorized to set interest rates on advances pursuant to this paragraph (c) may delegate any part of such authority to any officer or employee of the Bank.(d)Putable or convertible advances - (1)Disclosure. A Bank that offers a putable or convertible advance to a member shall disclose in writing to such member the type and nature of the risks associated with putable or convertible advance funding. The disclosure should include detail sufficient to describe such risks.(2)Replacement funding for putable advances. If a Bank terminates a putable advance prior to the stated maturity date of such advance, the Bank shall offer to provide replacement funding to the member, provided the member is able to satisfy the normal credit and collateral requirements of the Bank for the replacement funding requested.(3)Definition. For purposes of this paragraph (d), the term putable advance means an advance that a Bank may, at its discretion, terminate and require the member to repay prior to the stated maturity date of the advance.58 FR 29469, May 20, 1993, as amended at 61 FR 52687, Oct. 8, 1996; 65 FR 8263 , Feb. 18, 2000. Redesignated and amended at 65 FR 44429 , July 18, 2000