§ 23-47-705 - Prohibited operations -- Separate investment account -- Collateral for certain funds used in conduct of business -- Lien and claim upon state bank failure. - Arkansas Statutes

23-47-705. Prohibited operations -- Separate investment account -- Collateral for certain funds used in conduct of business -- Lien and claim upon state bank failure.

(a) (1) No state bank shall receive in its trust department deposits of current funds subject to check or the deposit of checks, drafts, bills of exchange, or other items for collection or exchange purposes.

(2) Funds deposited or held in trust by the state bank awaiting investment shall be carried in a separate account and shall not be used by the bank in the conduct of its business unless it shall secure the funds deposited or held in trust with investments in which a state bank may invest without limitation pursuant to 23-47-401.

(3) No security shall be required to the extent the funds so deposited or held in trust are insured under the provisions of the Federal Deposit Insurance Act.

(b) In the event of the failure of such state bank the owners of the funds held in trust for investment shall have a first priority lien on the bonds or other securities so set apart in addition to their claim against the estate of the bank.