ORS Chapter 295 - Oregon Statutes

Chapter 295 — Depositoriesof Public Funds and Securities

 

2009 EDITION

 

 

DEPOSITORIESOF PUBLIC FUNDS AND SECURITIES

 

PUBLICFINANCIAL ADMINISTRATION

 

295.001     Definitionsfor ORS 295.001 to 295.108

 

295.002     Depositof public funds; limitation; exception

 

295.004     Conditionsfor deposit of funds in excess of specified amounts

 

295.006     Bankdepository and public official filings with State Treasurer; rules

 

295.008     Conditionsfor acting as custodian or bank depository

 

295.013     Custodian’sreceipt; duties of custodian

 

295.015     Maintenanceof securities by bank depository

 

295.018     Increasein required collateral of bank depository; notifications; failure to increasecollateral

 

295.022     Collateralnot required for deferred compensation funds

 

295.031     Noticeto public officials regarding adequacy of collateral

 

295.034     Withdrawalof inadequately collateralized funds

 

295.037     Distributionof collateral after loss in bank depository; assessments

 

295.041     Subrogationrights of State Treasurer

 

295.046     Limitationon depository acceptance of public funds from single public official; exception

 

295.048     Limitationson aggregate public funds deposits; notice; exceptions

 

295.053     Custodianduties when bank depository ceases holding uninsured public funds; securities

 

295.056     Liabilityof public officials for loss of public funds

 

295.061     Treasurerreports; filing; notification of changes; failure to file reports

 

295.071     Investigationby regulatory bodies other than State Treasurer

 

295.073     Reportto State Treasurer of certain actions by Director of Department of Consumer andBusiness Services

 

295.081     Timedeposits

 

295.084     Designationof depository; collection for claims due state

 

295.091     Preferencein selecting depositories for political subdivisions; apportioning funds; interest

 

295.093     Depositingmoneys with treasurer of political subdivision

 

295.101     Publicfunds not subject to ORS 295.001 to 295.108

 

295.106     StateTreasurer charges; expenses

 

295.108     StateTreasurer rules; form of report

 

295.195     Depositof funds in foreign country; effect on collateral; report to LegislativeAssembly

 

295.205     Accountsin financial institutions outside Oregon; conditions; rules

 

      295.001Definitions for ORS 295.001 to 295.108. As used in ORS 295.001 to 295.108,unless the context requires otherwise:

      (1)“Adequately capitalized” means a bank depository that is classified asadequately capitalized by its primary federal regulatory authority.

      (2)“Bank depository” means an insured institution or trust company that:

      (a)Maintains a head office or branch in this state in the capacity of an insuredinstitution or trust company; and

      (b)Complies with ORS 295.008.

      (3)“Business day” means any day other than a federal or State of Oregon legalholiday or a day on which offices of the State of Oregon are otherwiseauthorized by law to remain closed.

      (4)“Closed depository” means a bank depository that is subject to a loss.

      (5)“Credit union depository” means a credit union as defined in ORS 723.006 or afederal credit union if:

      (a)The shares and deposits of the credit union or federal credit union are insuredby the National Credit Union Share Insurance Fund; and

      (b)The credit union or federal credit union maintains a head office or branch inthis state in the capacity of a credit union or federal credit union.

      (6)“Custodian bank” or “custodian” means one of the following institutionsdesignated by the bank depository for its own account:

      (a)The Federal Home Loan Bank designated to serve this state, or any branch ofthat bank; or

      (b)Any insured institution or trust company that:

      (A)Is authorized to accept deposits or transact trust business in this state;

      (B)Complies with ORS 295.008; and

      (C)Has been approved by the State Treasurer to serve as a custodian bank, if theState Treasurer has approved custodians under ORS 295.008.

      (7)“Custodian’s receipt” or “receipt” means a document issued by a custodian bankdescribing the securities deposited with it by a bank depository to securepublic fund deposits.

      (8)“Depository” means a bank depository or a credit union depository.

      (9)“Financial institution outside this state” means a financial institution, asdefined in ORS 706.008, that is not an extranational institution, as defined inORS 706.008, and is not a bank depository or credit union depository, asdefined in this section.

      (10)“Insured institution” means an insured institution as defined in ORS 706.008.

      (11)“Loss” means the issuance of an order by a regulatory or supervisory authorityor a court of competent jurisdiction:

      (a)Restraining a bank depository from making payments of deposit liabilities; or

      (b)Appointing a receiver for a depository.

      (12)“Maximum liability” means a sum equal to 10 percent of the greater of:

      (a)All uninsured public funds deposits held by the bank depository as shown on thedate of its most recent treasurer report; or

      (b)The average of the balances of uninsured public funds deposits on the last twoimmediately preceding treasurer reports.

      (13)“Minimum collateral requirement” for a bank depository on any given date meansa sum equal to:

      (a)For a well capitalized bank depository that has not been required to increaseits collateral pursuant to ORS 295.018, 10 percent of the greater of:

      (A)All uninsured public funds held by the bank depository, as shown on the mostrecent treasurer report;

      (B)The average of the balances of uninsured public funds held by the bankdepository, as shown on the last two immediately preceding treasurer reports;or

      (C)An amount otherwise prescribed in ORS 295.001 to 295.108.

      (b)For a well capitalized bank depository that has been required to increase itscollateral pursuant to ORS 295.018, the percentage required by the StateTreasurer pursuant to ORS 295.018 multiplied by the greater of:

      (A)All uninsured public funds held by the bank depository, as shown on the mostrecent treasurer report;

      (B)The average of the balances of uninsured public funds held by the bankdepository, as shown on the last two immediately preceding treasurer reports;or

      (C)An amount otherwise prescribed in ORS 295.001 to 295.108.

      (c)For an adequately capitalized bank depository or an undercapitalized bankdepository, 110 percent of the greater of:

      (A)All uninsured public funds held by the bank depository; or

      (B)The average of the balances of uninsured public funds held by the bankdepository, as shown on the last two immediately preceding treasurer reports.

      (14)“Net worth” of a bank depository means the total risk-based capital of the bankdepository, as shown on the immediately preceding report of condition andincome, and may include capital notes and debentures that are subordinate tothe interests of depositors.

      (15)“Pledge agreement” means a written agreement among an insured institution ortrust company, the State Treasurer and a custodian that pledges the securitiesdeposited by the insured institution or trust company with the custodian ascollateral for deposits of uninsured public funds held by the insuredinstitution or trust company. The agreement must be approved by the board ofdirectors or loan committee of the insured institution or trust company andmust be continuously maintained as a written record of the insured institutionor trust company.

      (16)“Public funds” or “funds” means funds under the control or in the custody of apublic official by virtue of office.

      (17)“Public official” means each officer or employee of this state or any agency,political subdivision or public or municipal corporation thereof, or anyhousing authority, who by law is made the custodian of or has control of anypublic funds.

      (18)“Report of condition and income” means the quarterly report submitted to a bankdepository’s primary federal regulatory authority.

      (19)“Security” or “securities” means:

      (a)Obligations of the United States, including those of its agencies andinstrumentalities and of government sponsored enterprises;

      (b)Obligations of the International Bank for Reconstruction and Development;

      (c)Bonds of any state of the United States:

      (A)That are rated in one of the four highest grades by a recognized investmentservice organization that has been engaged regularly and continuously for aperiod of not less than 10 years in rating state and municipal bonds; or

      (B)Having once been so rated are ruled to be eligible securities for the purposesof ORS 295.001 to 295.108, notwithstanding the loss of such rating;

      (d)Bonds of any county, city, school district, port district or other public bodyin the United States payable from or secured by ad valorem taxes and that meetthe rating requirement or are ruled to be eligible securities as provided inparagraph (c) of this subsection;

      (e)Bonds of any county, city, school district, port district or other public bodyissued pursuant to the Constitution or statutes of the State of Oregon or thecharter or ordinances of any county or city within the State of Oregon, if thebonds have a long-term rating of AA or better;

      (f)With the permission of the State Treasurer and in accordance with rules adoptedby the State Treasurer, loans made to any county, city, school district, portdistrict or other public body in the State of Oregon, if the borrower has notbeen in default with respect to the payment of principal or interest on any ofits loans within the preceding 10 years or during the period of its existenceif that is less than 10 years;

      (g)With the permission of the State Treasurer and in accordance with rules adoptedby the State Treasurer, bond anticipation notes issued, sold or assumed by anauthority under ORS 441.560;

      (h)Bonds, notes, letters of credit or other securities or evidence of indebtednessconstituting the direct and general obligation of a federal home loan bank orFederal Reserve bank;

      (i)Debt obligations of domestic corporations that are rated in one of the threehighest grades by a recognized investment service organization that has beenengaged regularly and continuously for a period of not less than 10 years inrating corporate debt obligations; and

      (j)Collateralized mortgage obligations and real estate mortgage investmentconduits that are rated in one of the two highest grades by a recognizedinvestment service organization that has been engaged regularly andcontinuously for a period of not less than 10 years in rating corporate debtobligations.

      (20)“Treasurer report” means a written report signed or authenticated by an officerof a bank depository that has in its possession uninsured public funds depositssetting forth as of the close of business on a specified date:

      (a)The total amount of uninsured public funds on deposit with the bank depository;

      (b)The total amount of public funds on deposit with the bank depository;

      (c)The net worth of the bank depository;

      (d)The amount and nature of eligible collateral then on deposit with its custodianto collateralize the bank depository’s public funds deposits; and

      (e)The identity of its custodian.

      (21)“Treasurer report due date” means a date not less than 10 business days afterthe date a bank depository’s report of condition and income is due to besubmitted.

      (22)“Trust company” means a trust company as defined in ORS 706.008.

      (23)“Undercapitalized” means a bank depository that is classified asundercapitalized, significantly undercapitalized or critically undercapitalizedby its primary federal regulatory authority.

      (24)“Uninsured public funds” or “uninsured public funds deposits” means publicfunds deposited in a bank depository that exceed the amounts insured orguaranteed as described in ORS 295.002 (1)(a) and (b) and does not includepublic funds deposited in a certificate of deposit or time deposit under ORS295.004.

      (25)“Value” means the current market value of securities.

      (26)“Well capitalized” means a bank depository that is classified as wellcapitalized by its primary federal regulatory authority. [Formerly 295.005;2009 c.821 §1]

 

      295.002Deposit of public funds; limitation; exception. (1) Any publicofficial may retain undeposited such reasonable cash working fund as is fixedby the governing body of the political subdivision or public corporation forwhich the public official acts. Except to the extent of such cash working fund,each public official shall deposit public funds in the custody or control ofthe public official in one or more depositories currently qualified pursuant toORS 295.001 to 295.108. The public official may not have on deposit in any onecredit union depository an aggregate sum in excess of the deposit insurancelimits established by the National Credit Union Administration. With respect tobank depositories, unless a bank depository has entered into the agreementdescribed in ORS 295.008 (2)(b) and has deposited securities pursuant to ORS295.015 (1), the public official shall not have on deposit in any one bankdepository and its branches a sum in excess of:

      (a)The amount insured by the Federal Deposit Insurance Corporation; or

      (b)For any amount over the amount insured by the Federal Deposit InsuranceCorporation, the amount insured or guaranteed by private deposit insurance or adeposit guaranty bond issued by an insurance company rated A- or better by arecognized insurance rating service.

      (2)Compliance with ORS 295.001 to 295.108 relieves the public official of personalliability on account of the loss of the public funds in the custody or controlof the public official. [Formerly 295.025]

 

      295.004Conditions for deposit of funds in excess of specified amounts. (1) A publicofficial may deposit public funds in a bank depository in an amount in excessof the amount allowed in ORS 295.002 without requiring the bank depository toshow that it has entered into a pledge agreement or deposited securitiespursuant to ORS 295.015 (1) if the funds are initially deposited into a bankdepository in Oregon and the Oregon bank depository participates in a programthrough which:

      (a)The Oregon bank depository arranges for deposit of the funds into one or morecertificates of deposit or time deposits issued by other financial institutionsin the United States;

      (b)Each certificate of deposit or time deposit is fully insured by the FederalDeposit Insurance Corporation;

      (c)The Oregon bank depository administers the funds on behalf of the publicofficial; and

      (d)Other financial institutions participating in the program place funds into theOregon depository in an amount at least equal to the amount deposited into theOregon bank depository by the public official for purposes of the program.

      (2)Until the Oregon bank depository places public funds into one or morecertificates of deposit or time deposits as provided in subsection (1) of thissection, any uninsured public funds held by the Oregon bank depository pendingsuch placement must be collateralized as provided in ORS 295.001 to 295.108 forother uninsured public funds deposits.

      (3)The provisions of ORS 295.006, 295.013, 295.015, 295.018 and 295.037 do notapply to public funds deposits deposited into a bank depository in Oregon thatthe bank depository arranges for under the provisions of the program describedin this section. The provisions of ORS 294.035 and 295.001 requiring deposit ofpublic funds into depositories that have offices or branches in Oregon do notapply to certificates of deposit or time deposits that an Oregon bankdepository arranges for under the provisions of the program described in thissection. [Formerly 295.027; 2009 c.821 §2]

 

      295.005 [1967 c.451 §1;1973 c.157 §4; 1973 c.288 §2; 1973 c.378 §1; 1973 c.797 §426; 1975 c.515 §8;1981 c.440 §2; 1983 c.104 §3; 1983 c.456 §4; 1985 c.439 §1; 1985 c.565 §51;1987 c.524 §1; 1989 c.536 §1; 1991 c.352 §6; 1993 c.74 §1; 1993 c.229 §23; 1993c.318 §12; 1997 c.631 §447; 1999 c.311 §1; 1999 c.412 §3; 2003 c.195 §17; 2003c.405 §2; 2005 c.443 §§32,32a; 2007 c.783 §123; 2007 c.871 §15a; renumbered295.001 in 2007]

 

      295.006Bank depository and public official filings with State Treasurer; rules. (1) Each bankdepository shall keep on file with the State Treasurer the name and address ofits custodian bank.

      (2)Each public official shall keep on file with the State Treasurer the names,addresses and such other information as the State Treasurer shall prescribe byrule of each depository in which the public official deposits public funds.

      (3)If a public official changes a bank depository in which the public officialdeposits public funds, the public official shall report the informationrequired under subsection (2) of this section or by rule regarding the changeto the State Treasurer within three business days after the effective date ofthe change. [Formerly 295.055; 2009 c.821 §3]

 

      295.008Conditions for acting as custodian or bank depository. (1)(a) Aninsured institution or trust company may not be a custodian bank under ORS295.001 to 295.108, unless it certifies in writing to the State Treasurer thatit will furnish the reports required under ORS 714.075 to the Director of theDepartment of Consumer and Business Services.

      (b)The State Treasurer may approve one or more insured institutions or trustcompanies to serve as custodians. The State Treasurer shall promptly notify allbank depositories of the approval of an insured institution or trust company toserve as a custodian.

      (2)An insured institution or trust company may not be a bank depository under ORS295.001 to 295.108, unless it:

      (a)Certifies in writing to the State Treasurer that it will furnish, by the timespecified by the Director of the Department of Consumer and Business Services:

      (A)The reports required under ORS 714.075 to the director; and

      (B)Any other information the director considers necessary to determine whether toadvise the State Treasurer to order a bank depository to increase itscollateral under ORS 295.018.

      (b)Except as provided in subsection (4) of this section, enters into a pledgeagreement; and

      (c)Complies with subsection (3) of this section.

      (3)Any insured institution or trust company that wishes to become a bankdepository shall file with the State Treasurer an initial written report signedor authenticated by an officer of the insured institution or trust companysetting forth, as of the date the insured institution or trust company intendsto commence acting as a bank depository:

      (a)The estimated total amount of public funds that will be on deposit with theinsured institution or trust company;

      (b)The estimated net worth of the insured institution or trust company;

      (c)The amount and nature of the collateral that will be deposited with itscustodian to collateralize the public funds deposits; and

      (d)The identity of its custodian.

      (4)An insured institution or trust company may be a bank depository under ORS295.001 to 295.108 without entering into a pledge agreement or complying withsubsection (3) of this section if the insured institution or trust company doesnot hold any uninsured public funds deposits. The provisions of ORS 295.006,295.013, 295.015, 295.018, 295.037 and 295.061 do not apply to an insuredinstitution or trust company that is a bank depository under this subsection.

      (5)An insured institution or trust company that merges with, acquires all theassets of, acquires ownership of or otherwise becomes a successor entity to abank depository that has entered into a pledge agreement must execute a newpledge agreement or provide evidence satisfactory to the State Treasurer of theassumption by the successor insured institution or trust company of all of theduties and obligations of the bank depository under the existing pledgeagreement. An insured institution or trust company that fails to enter into apledge agreement or provide evidence of its assumption of the existing pledgeagreement within the time specified by the State Treasurer shall be treated asa bank depository holding uninsured public funds that has failed to pledgeadequate collateral under ORS 295.031. [2005 c.112 §3; 2007 c.871 §16; 2009c.821 §4]

 

      295.010 [Amended by1953 c.352 §3; 1957 c.172 §1; 1965 c.169 §1; repealed by 1967 c.451 §32]

 

      295.011 [2005 c.112 §4;2005 c.443 §32c; 2007 c.783 §124; renumbered 295.101 in 2007]

 

      295.013Custodian’s receipt; duties of custodian. (1) Upon receipt of securitiesfrom the bank depository, the custodian bank shall issue to the StateTreasurer, with a copy to the bank depository, a custodian’s receipt describingthe securities.

      (2)Each custodian shall: