Based on Master Accounts and Fed Operating Circular No. 10
TO: (Agent / Depository Institution)
FROM: (Pledger / Principal)
DATE:
REF: Settlement of Account/Obligation #
Pursuant to 12 USC 5002 Section 3 Subsection 2, notice is hereby given that the Principal is conducting banking business and is recognized as a depository institution [5, 6]. In accordance with Federal Reserve Operating Circular No. 10, Section 12.3, the Pledger has granted the Agent Power of Attorney in fact to operate as an intermediary [3, 4].
The demand for payment received on serves as the required authorization from the Federal Reserve to originate a Payment Order [7, 8]. As the Pledger of the collateral, I hereby exercise the right to draw against the restricted/pledged collateral account—which serves as the Master Account for this transaction—to settle the debt obligation in the amount of [1, 9].
This settlement shall be executed via the Treasury Offset Program (TOP) and administrative offset mechanisms, as the Agent acts as a fiscal arm of the Treasury under the Federal Reserve Act [10, 11]. The Agent is instructed to offset the amount due against the pledged collateral and turn over complete access to any remaining balance, as the agreement is hereby concluded [12].
Failure to settle this account via the instructed offset constitutes a violation of agency law, as the act of the Agent is legally the act of the Principal [4].
__________________________________________
, Pledger
Authorized Representative