TAG LOC

Securities-based lending involves special risks and is not appropriate for everyone. Be sure to carefully review product details, risks, and benefits to ensure this product is right for you.

• A decline in the value of your pledged collateral may require you to provide additional funds or securities to avoid a maintenance call.
• You can lose more funds than are held in the collateral account. A Line of Credit account is a full-recourse loan and you will be held liable for any deficiency.
• Bank can force the liquidation of any securities pledged as collateral, and can do so without contacting you first. You are not entitled to choose which securities in the collateral account are liquidated.
• Bank can modify its collateral maintenance requirements at any time, without notice to you.
• You are not entitled to an extension of time to resolve a maintenance call.
• If your assets are liquidated, there may be adverse tax or other consequences.
• A Line of Credit is an uncommitted demand facility, which means the bank may demand full or partial repayment at any time or elect not to advance funds.

A Line of Credit is different in two ways: (1) the way in which the funds are used, and (2) the interest rates on the Line of Credit.

• How the funds are used:
  1. For a Line of Credit, funds can be used for any lawful purpose, except for the purchasing, carrying, or trading of margin stock or repayment of a margin loan.
  2. Margin can be used for any lawful purpose, including the purchasing, carrying, or trading of margin stock.
• Interest rates:
  1. A Line of Credit is tied to the 30-day rolling compounded average Secured Overnight Financing Rate (SOFR), as published by the Federal Reserve Bank of New York plus a variable rate adjustment, plus a margin.
  2. Margin interest rates are typically tied to the E*TRADE Base Rate, which is set at the discretion of E*TRADE with reference to commercially recognized interest rates. Margin interest rates may move with changes in the E*TRADE Base Rate, or with adjustments in the debit balance.

Non-retirement and non-stock plan accounts including individual, joint, and revocable trusts with no more than two trustees may be pledged as collateral.

Yes, there are restrictions on accounts pledged as collateral:
No margin borrowing. Funds cannot be used for purchase, carrying, trading of margin stock, or repayment of a margin loan.
No margin and options trading. Upon being approved for a Line of Credit, the collateral account(s) will have margin and options trading capabilities removed (if applicable). Pledged accounts will also be prohibited from enrolling in margin and/or options trading.
Cash management and payment features disabled. Upon taking a draw from your line of credit, all cash management and payment features will be restricted (e.g., bill pay, check writing, use of debit card, electronic funds transfers, wires).

If you would like to withdraw cash and/or securities from a pledged account, please call us at 866-270-6750   for assistance.

In this situation, you may be required to deposit additional cash or securities as collateral to maintain your original collateral amount. Failure to do so may result in the selling of some or all of your pledged securities, which may result in adverse tax consequences.