Oregon Statutes - Chapter 295 - Depositories of Public Funds and Securities - Section 295.105 - Effect of deposit of securities; procedure in case of default of depository bank; rules.

(1) The deposit of securities by a depository bank with its custodian pursuant to ORS 295.001 to 295.125 constitutes consent by the depository to the disposition of the securities in accordance with this section.

(2) When a depository is closed by order of the Director of the Department of Consumer and Business Services or the Comptroller of the Currency, the State Treasurer shall:

(a) Demand and receive from the pool manager the custodianís receipts; and

(b) Demand and receive from the custodian the securities pledged to secure deposits of public funds and liquidate in an orderly manner the securities or such thereof as the State Treasurer may determine advisable at public or private sale and distribute the proceeds as provided in this section.

(3) Each public official shall advise the State Treasurer of the amount of the public officialís deposits in the defaulted depository bank, and the State Treasurer shall proceed to determine the total amount of the claims payable out of the collateral of the depository. The claim of a public official for purposes of this section shall be the lesser of:

(a) The amount of the public officialís deposits plus interest to the date the funds are distributed to the public official at the rate the depository agreed to pay on the funds reduced by the portion thereof that is insured by the Federal Deposit Insurance Corporation; or

(b) The amount of the public officialís certificates of participation plus interest on the public officialís deposits to the date the funds are distributed to the public official at the rate the depository agreed to pay on the funds.

(4) The State Treasurer shall distribute the net proceeds of the collateral, to the extent that they do not exceed the total claims, among the public officials entitled thereto in proportion to their respective claims. The State Treasurer shall remit to the depository bank any of its collateral or the proceeds thereof in excess of the amount so distributable to public officials.

(5) If the net proceeds of the collateral are inadequate, after all other available sources are applied, to meet the total claims of the public officials entitled thereto, the public officials may make claims against the depository bank as general creditors.

(6) The State Treasurer, in accordance with ORS chapter 183, shall adopt rules to carry out this section.

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Last modified: August 7, 2008