HOUSE BILL NO. 1313 103RD GENERAL ASSEMBLY
INTRODUCED BY REPRESENTATIVE THOMPSON.
2583H.01I JOSEPH ENGLER, Chief Clerk
AN ACT To repeal section 362.490, RSMo, and to enact in lieu thereof one new section relating to banking institutions that secure the deposit of public funds.
Be it enacted by the General Assembly of the state of Missouri, as follows:
Section A. Section 362.490, RSMo, is repealed and one new section enacted in lieu 2 thereof, to be known as section 362.490, to read as follows: 362.490. 1. Notwithstanding any provision of law of this state or of any political 2 subdivision thereof requiring security for deposits in the form of collateral, surety bond or in 3 any other form, security for such deposits shall not be required to the extent said deposits are 4 insured under the provisions of an act of congress creating and establishing the Federal 5 Deposit Insurance Corporation or similar agency created and established by the Congress of 6 the United States. 7 2. (1) As an alternative to the requirements for direct pledging of security for 8 deposit of public funds in excess of the amount that is federally insured or guaranteed 9 pursuant to sections 110.010, 110.020, and 110.060, a banking institution authorized as 10 legal depositary for public funds may secure the deposits of any governmental entity by 11 granting a security interest in a single pool of securities to secure the repayment of all 12 public funds deposited in the banking institution by such governmental entities and not 13 otherwise federally insured or secured pursuant to law. 14 (2) A banking institution may secure the deposit of public funds using the direct 15 method as provided in chapter 110, or the single bank pooled method provided in this 16 section, or may elect to offer government entities the choice of either method to secure 17 the deposit of public funds.
EXPLANATION — Matter enclosed in bold-faced brackets [thus] in the above bill is not enacted and is intended to be omitted from the law. Matter in bold-face type in the above bill is proposed language. HB 1313 2
18 (3) Under the direct method a banking institution may secure the deposit of 19 public funds of each government entity separately by furnishing securities pursuant to 20 sections 110.010, 110.020, and 110.060. 21 (4) Under the single bank pooled method a banking institution may secure the 22 deposit of public funds of one or more government entities through a pool of eligible 23 securities held in custody and safekeeping with one or more other banking institutions 24 or safe depositaries, to be held subject to the order of the director of the division of 25 finance or the administrator appointed pursuant to subsection 3 of this section for the 26 benefit of the government entities having public funds deposited with such banking 27 institution as set forth in this section. 28 3. (1) The director of the division of finance shall have exclusive authority to 29 appoint a bank, trust company, or association for Missouri banks which is chartered or 30 incorporated in Missouri, to serve as the administrator with respect to a single bank 31 pooled method. The administrator shall act as an agent for banking institutions and as 32 the nominee of the government entities for purposes of administering the pool of 33 securities pledged to secure uninsured public fund deposits. The fees and expenses of 34 such administrator shall be paid by the banking institutions utilizing the single bank 35 pooled method. The single bank pooled method shall not be utilized by any banking 36 institution unless an administrator has been appointed by the director pursuant to this 37 section and is acting as the administrator. The director may require the administrator 38 to post a surety bond or security to the director in an amount up to one hundred 39 thousand dollars to assure the faithful performance of the duties of the administrator. 40 (2) At all times the aggregate market value of the pool of securities so deposited, 41 pledged, or in which a security interest is granted shall be at least equal to one hundred 42 two percent of the amount on deposit which is in excess of the amount so insured. 43 (3) Each banking institution shall carry on its accounting records at all times a 44 general ledger or other appropriate account of the total amount of all public funds to be 45 secured by the pool of securities as determined at the opening of business each day, and 46 the aggregate market value of the pool of securities pledged, or in which a security 47 interest is granted to secure such public funds. 48 (4) If a banking institution elects to secure the deposit of public funds through 49 the use of the single bank pooled method, such banking institution shall notify the 50 administrator in writing that it has elected to utilize the single bank pooled method and 51 the proposed effective date thereof and enter such agreement as the administrator may 52 require. 53 (5) A banking institution may not retain any deposit of public funds which is 54 required to be secured unless it has secured the deposits for the benefit of the HB 1313 3
55 government entities having public funds with such banking institution pursuant to this 56 section. 57 (6) Only the securities and collateral described or listed pursuant to section 58 30.270 for the safekeeping and payment of deposits by the state treasurer may be 59 provided and accepted as security for the deposit of public funds and shall be eligible as 60 collateral. The administrator shall not accept any securities which are not described or 61 listed pursuant to section 30.270. 62 (7) The administrator may establish such procedures and reporting 63 requirements as necessary for depository banking institutions and their safekeeping 64 banks or depositaries to confirm the amount of insured public fund deposits, the pledge 65 of securities to the administrator to secure the deposit of public funds, as agent for each 66 participating banking institution, and to monitor the market value of pledged securities 67 as reported by the custody agents, and to add, substitute, or remove securities held in 68 the single bank pool as directed by the depository banking institution. 69 (8) In the event of the failure and insolvency of a banking institution using the 70 single bank pooled method, subject to any order of the director pursuant to powers 71 vested under chapter 361, the administrator shall direct the safekeeping banks or 72 depositaries to sell the pledged securities and direct proceeds to the payment of the 73 uninsured public fund deposits or to transfer the pledged securities to that banking 74 institution's primary supervisory agency or the duly appointed receiver for the banking 75 institution to be liquidated to pay out the uninsured public fund deposits. ✔
Statutes affected: