(1) An institution may only grant security interests in its assets:
(a) To secure its indebtedness to a Federal Reserve Bank or Federal Home Loan Bank.
(b) To secure its borrowings from others with a maturity of 90 days or less, provided the value of the assets pledged shall not be more than 50 percent greater than the amount borrowed. If the value of the assets pledged is more than 25 percent greater than the amount borrowed or if the amount borrowed is greater than the stockholders’ equity of the bank, the transaction shall first be approved in writing by the Director of the Department of Consumer and Business Services.
(c) To secure its deposits that are not insured by the Federal Deposit Insurance Corporation provided:
(A) The value of aggregate assets pledged does not exceed 20 percent of its stockholders’ equity; and
(B) The prior written approval of the director is obtained.
(d) To secure public funds pursuant to ORS 295.001 to 295.108, trust funds awaiting investment or distribution, or trust funds deposited with it by an institution.
(2) Notwithstanding any other provision of state law, when an institution grants a security interest in assets to secure public funds, the depositor of the public funds and any bailee of pledged securities or other assets shall be entitled to the status of a lien creditor as defined in ORS 79.0102.
(3) An institution shall grant a security interest in its assets only when authorized by a general or specific prior resolution of its board of directors.
(4) As used in this section, “public funds” means deposits belonging to:
(a) The State of Oregon that may be deposited to the official credit of the State Treasurer, and funds that may be deposited in an official capacity by any state officer, board or commission.
(b) Any county within this state deposited to the official credit of the county treasurer, including the funds of any irrigation or drainage district organized under the laws of this state, or any school district within this state where funds of the school district are deposited with the county treasurer, and funds that may be deposited in an official capacity by any county officer.
(c) Any port, port commission, dock or dock commission within this state that may be deposited to the credit of the port, port commission, dock or dock commission, or the treasurer thereof.
(d) Any city within this state deposited to the official credit of the city treasurer, and funds that may be deposited in an official capacity by any officer of any municipal corporation.
(e) Any school district within this state.
(f) Any district organized under the laws of this state with the power to levy taxes.
(g) Any housing authority organized and operating pursuant to ORS 456.055 to 456.235.
(h) The United States and any of its agencies and instrumentalities to be deposited in the manner and under the rules prescribed by the United States Government. [1997 c.631 §185; 2001 c.445 §180; 2007 c.871 §31]
Note: The amendments to 708A.535 by section 31, 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 user’s convenience.
708A.535. (1) An institution may only grant security interests in its assets:
(a) To secure its indebtedness to a Federal Reserve Bank or Federal Home Loan Bank.
(b) To secure its borrowings from others with a maturity of 90 days or less, provided the value of the assets pledged shall not be more than 50 percent greater than the amount borrowed. If the value of the assets pledged is more than 25 percent greater than the amount borrowed or if the amount borrowed is greater than the stockholders’ equity of the bank, the transaction shall first be approved in writing by the Director of the Department of Consumer and Business Services.
(c) To secure its deposits that are not insured by the Federal Deposit Insurance Corporation provided:
(A) The value of aggregate assets pledged does not exceed 20 percent of its stockholders’ equity; and
(B) The prior written approval of the director is obtained.
(d) To secure public funds, trust funds awaiting investment or distribution, or trust funds deposited with it by an institution.
(2) Notwithstanding any other provision of state law, when an institution grants a security interest in assets to secure public funds, the depositor of the public funds and any bailee of pledged securities or other assets shall be entitled to the status of a lien creditor as defined in ORS 79.0102.
(3) An institution shall grant a security interest in its assets only when authorized by a general or specific prior resolution or its board of directors.
(4) As used in this section, “public funds” means deposits belonging to:
(a) The State of Oregon that may be deposited to the official credit of the State Treasurer, and funds that may be deposited in an official capacity by any state officer, board or commission.
(b) Any county within this state deposited to the official credit of the county treasurer, including the funds of any irrigation or drainage district organized under the laws of this state, or any school district within this state where funds of the school district are deposited with the county treasurer, and funds that may be deposited in an official capacity by any county officer.
(c) Any port, port commission, dock or dock commission within this state that may be deposited to the credit of the port, port commission, dock or dock commission, or the treasurer thereof.
(d) Any city within this state deposited to the official credit of the city treasurer, and funds that may be deposited in an official capacity by any officer of any municipal corporation.
(e) Any school district within this state.
(f) Any district organized under the laws of this state with the power to levy taxes.
(g) Any housing authority organized and operating pursuant to ORS 456.055 to 456.235.
(h) The United States and any of its agencies and instrumentalities to be deposited in the manner and under the rules prescribed by the United States Government.
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