§ 19-3.1-8 - Deposits by financial institutions with general treasurer. - Rhode Island Statutes

SECTION 19-3.1-8

   § 19-3.1-8  Deposits by financialinstitutions with general treasurer. – (a) Every financial institution subject to this chapter shall deposit with thegeneral treasurer an amount that is at all times equal in value to twentypercent (20%) of the entire capital stock of the financial institution, in:

   (1) Bonds, of at least a double A ("AA") rating orequivalent, of this state or of any state or of the United States;

   (2) Bonds, rated at least double A ("AA") or equivalent,notes, or other financial obligations of any town or city in this state;

   (3) Any securities of the classes in which the sinking fundcommission of this state is authorized to invest the moneys received by it;

   (4) First mortgages on improved real estate in this state ofthe class required for financial institution investments;

   (5) Mortgages insured and debentures issued by the federalhousing administration; or

   (6) Obligations of national mortgage associations.

   (b) These investments shall be held by the general treasureras an additional security for the faithful performance by the financialinstitution of its duties as trustee, executor, custodian, conservator,guardian, assignee, or receiver, and also as an additional security for therepayment of deposits with the financial institution by executors,administrators, custodians, conservators, guardians, assignees, or receivers,or trustees on special agreement, made to exonerate the depositors under thistitle from personal liability to the estates on account of which these depositswere made. The parties intended to be secured by the deposits shall, in case ofloss, be first fully indemnified out of the deposit, in preference to all othercreditors of the financial institution. However, whenever the deposit or anypart of it consists of mortgages on real estate, the financial institution sodepositing it shall execute an assignment of the deposit and of the debtssecured by it in favor of the general treasurer, in trust, for the uses andpurposes listed in this section. No financial institution shall accept orassume to perform any of the trust duties mentioned in this section or receiveany deposits from any of the trustees until the deposit has been made. If thesecurity required by this section is one that is maintained in the federalreserve book entry system or the depository trust company book entry system orany similar entity, then the financial institution required to make the depositshall designate the general treasurer as the pledgee of the security andprovide written notification to the general treasurer identifying the security.