Standby Letter of Credit

An undertaking by the Bank on behalf of a member or housing associate that represents an obligation to the beneficiary (1) to repay money borrowed by or advanced to or for the account of the member or housing associate or (2) to make payment on account of any indebtedness undertaken by the member or housing associate, or (3) to make payment on account of any default by the member or housing associate in the performance of an obligation. It does not include a commercial letter of credit or any short-term selfliquidating instrument used to finance the movement of goods.

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