Oregon Statutes - Chapter 295 - Depositories of Public Funds and Securities - Section 295.018 - Increase in required collateral of bank depository; notifications; failure to increase collateral.

(1) The State Treasurer may require any bank depository during any period when it has in its possession public fund deposits to maintain on deposit with its custodians securities having a value not less than 110 percent of the greater of:

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

(b) The average of the balances of public funds held by the bank depository, as shown on the last four immediately preceding treasurer reports.

(2) An increase in collateral under subsection (1) of this section shall be ordered upon the advice of the Director of the Department of Consumer and Business Services. If the bank depository is a national bank or a federally chartered savings bank or savings and loan association, in giving advice to the State Treasurer the director may rely exclusively on information provided to the director by federal regulatory agencies and by the association on forms prescribed by the director. As a condition of being analyzed and reviewed by the director, a federal association shall agree and consent to provide the director with accurate, pertinent and timely information.

(3) Failure of the director to inform the State Treasurer of the condition of any bank depository does not give any public depositor any right or impose any liability on the director. The State Treasurer shall not be liable to any public depositor or to any bank depository for increasing or not increasing the collateral requirement as authorized in subsection (1) of this section.

(4) Any bank depository notified by the State Treasurer of the increased collateral requirement shall comply with the order within five business days by increasing the collateral in the same manner as required for the initial deposit of collateral in ORS 295.015 and, within the same five days, shall notify the State Treasurer of its compliance by supplying copies of the custodianís receipts for, or statement of activity showing, the increased collateral.

(5)(a) If the State Treasurer does not receive the notice required in subsection (4) of this section within the required five business days, the State Treasurer shall immediately notify the director of the failure and shall send notice to all public officials served by that bank depository of its failure to comply.

(b) If, after giving notice as required by paragraph (a) of this subsection, the State Treasurer receives notice that the bank depository is in compliance with the increased collateral requirements, the treasurer shall notify the public officials served by the bank depository that the bank depository is once again in compliance.

(6) A bank depository that does not comply with subsection (4) of this section shall accept no further public funds deposits that are not insured by the Federal Deposit Insurance Corporation.

(7) The names of financial institutions contained in records received or compiled by the State Treasurer pursuant to the provisions of this section shall be exempt from public disclosure unless the public interest requires disclosure in the particular instance. [1975 c.515 §2; 1981 c.440 §1; 1985 c.762 §182; 1987 c.373 §§28a,28b; 1987 c.554 §1; 1989 c.171 §41; 1991 c.327 §1; 2007 c.871 §18]

Note: The amendments to 295.018 by section 18, chapter 871, Oregon Laws 2007, become operative July 1, 2008, and apply to all public funds on deposit on or after July 1, 2008. See sections 36 and 37, chapter 871, Oregon Laws 2007, as amended by sections 39 and 40, chapter 871, Oregon Laws 2007. The text that is operative until July 1, 2008, is set forth for the userís convenience.

295.018. (1) The State Treasurer may require any depository bank during any period when it has in its possession public fund deposits to maintain on deposit with its custodians securities having a value not less than 110 percent of the certificates of participation issued by its pool manager. The increase in collateral shall be ordered upon the advice of the Director of the Department of Consumer and Business Services. If the depository bank is a federally chartered savings and loan association, in giving its advice to the State Treasurer the director may rely exclusively on information provided to the director by federal regulatory agencies and by the association on forms prescribed by the director; as a condition of being analyzed and reviewed by the director, a federal association shall agree and consent to provide the director with accurate, pertinent and timely information.

(2) Failure of the director to inform the State Treasurer of the condition of any depository does not give any public depositor any right or impose any liability on the director. The State Treasurer shall not be liable to any public depositor or to any depository bank for increasing or not increasing the collateral requirement as authorized in subsection (1) of this section.

(3) Any depository bank notified by the State Treasurer of the increased collateral requirement shall comply with the order within 10 business days by increasing the collateral in the same manner as required for the initial deposit of collateral in ORS 295.015. The bank shall notify the State Treasurer and the pool manager of its compliance by supplying copies of the custodianís receipts for the increased collateral.

(4) If any depository bank notified by the State Treasurer of an increased collateral requirement fails to notify the State Treasurer of compliance therewith within 10 business days, the State Treasurer shall immediately notify the director of the failure and shall send notice to the pool manager and all public depositors served by that depository bank of its failure to comply.

(5) A depository bank described in subsection (4) of this section shall accept no further public deposits.

(6) Financial institutions named in records received or compiled by the State Treasurer pursuant to the provisions of this section shall be exempt from public disclosure unless the public interest requires disclosure in the particular instance.

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Last modified: August 7, 2008