---
kind: "section"
citation: "12 U.S.C. § 2294"
title: "12"
title_heading: "Banks and Banking"
number: "2294"
heading: "Payments on behalf of public bodies"
release: "119-102"
url: "https://uscodex.org/usc/12/2294"
units:
  - "Chapter 24 — Federal Financing Bank"
---

# §2294. Payments on behalf of public bodies

- (a) Notwithstanding any other provision of this chapter, the purchase by the [Bank](/usc/12/1426a.md?p=g-1) of the [obligations](/usc/12/2282.md?p=2) of any local public body or [agency](/usc/12/1422.md?p=12) within the United States shall be made upon such terms and conditions as may be necessary to avoid an increase in borrowing costs to such local public body or [agency](/usc/12/1422.md?p=12) as a result of the purchase by the [Bank](/usc/12/1426a.md?p=g-1) of its [obligations](/usc/12/2282.md?p=2). The head of the [Federal agency](/usc/12/2282.md?p=1) guaranteeing such [obligations](/usc/12/2282.md?p=2), in consultation with the Secretary of the Treasury, shall estimate the borrowing costs that would be incurred by the local public body or [agency](/usc/12/1422.md?p=12) if its [obligations](/usc/12/2282.md?p=2) were not sold to the [Bank](/usc/12/1426a.md?p=g-1).
- (b) The [Federal agency](/usc/12/2282.md?p=1) guaranteeing [obligations](/usc/12/2282.md?p=2) purchased by the [Bank](/usc/12/1426a.md?p=g-1) may contract to make periodic payments to the [Bank](/usc/12/1426a.md?p=g-1) which shall be sufficient to offset the costs to the [Bank](/usc/12/1426a.md?p=g-1) of purchasing [obligations](/usc/12/2282.md?p=2) of local public bodies or [agencies](/usc/12/1422.md?p=12) upon terms and conditions as prescribed in this section rather than as prescribed by [section 2285 of this title](/usc/12/2285.md). Such contracts may be made in advance of appropriations therefor, and appropriations for making payments under such contracts are hereby authorized.

## Source credit

(Pub. L. 93–224, § 16, Dec. 29, 1973, 87 Stat. 941.)