Bill Text: IN SB0205 | 2011 | Regular Session | Engrossed
Bill Title: Capital ratio requirement for public depositories.
Spectrum: Slight Partisan Bill (Republican 2-1)
Status: (Passed) 2011-05-18 - Effective 05/10/2011 [SB0205 Detail]
Download: Indiana-2011-SB0205-Engrossed.html
Citations Affected: IC 5-13.
Synopsis: Capital ratio requirement for public depositories. Provides
that in order to serve as a depository of public funds, a financial
institution does not have to maintain a capital ratio in excess of the
minimum required by the institution's governmental supervisory body
if the institution has fully collateralized the institution's public funds on
deposit by pledging and delivering acceptable collateral to the board
for depositories. Provides that a service charge to be paid by a political
subdivision to a public depository in which the political subdivision's
funds are deposited may be paid from interest earned on the funds in
the political subdivision's account with the public depository. Provides
that a service charge to be paid by a political subdivision to a public
depository for the depository's management of an investment cash
management system for the political subdivision may be paid from
interest earned on the funds in the political subdivision's account with
the public depository that manages the system.
Effective: Upon passage.
(HOUSE SPONSORS _ SAUNDERS, KNOLLMAN, PFLUM, MESSMER)
January 5, 2011, read first time and referred to Committee on Insurance and Financial
Institutions.
January 31, 2011, reported favorably _ Do Pass.
February 7, 2011, read second time, ordered engrossed.
February 8, 2011, engrossed.
February 10, 2011, read third time, passed. Yeas 48, nays 1.
March 28, 2011, read first time and referred to Committee on Financial Institutions.
April 4, 2011, amended, reported _ Do Pass.
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(1) by direct charge to the deposit or other account; or
(2) in
(b) An application must:
(1) be made in writing on forms prescribed under section 8 of this chapter;
(2) contain terms and conditions as required and authorized by this chapter; and
(3) offer to:
(A) receive public funds of the state on deposit; and
(B) provide the security required by IC 5-13-13-7 for the safekeeping and prompt payment of the deposited funds.
(c) A financial institution is ineligible to become a depository and receive public funds of the state if
(1) The institution fails to maintain a capital ratio in excess of the minimum required by the governmental supervisory body of the institution.
(2) The institution has been found by the department of financial institutions under IC 28-1-2-40, or the financial institution's primary federal regulator, to not be in substantial compliance with the federal Credit Card Accountability Responsibility and Disclosure Act of 2009 as it applies to Indiana borrowers.
If the financial institution is already a depository, the institution may continue to hold the public funds until maturity to avoid the imposition of a penalty upon the depositor, although the financial institution may not accept the public funds for reinvestment and may not accept additional public funds. If necessary, a determination of the ratio described in
institution's governmental supervisory body under the regulatory
accounting principles as prescribed by the supervisory body.
(d) A financial institution shall furnish to the board a certificate
executed by an officer of the institution signifying that the institution
satisfies:
(1) the requirements of subsection (c); and
(2) the requirement in section 6(b) of this chapter that the sum of:
(A) the total principal amount of the depository's outstanding
loans to Indiana residents; plus
(B) the total value of the depository's investments in Indiana
residents;
is at least equal to the total amount of public funds of the state and
political subdivisions of the state that are on deposit in the
depository.
The board may rely on a certificate furnished under this subsection in
determining whether to deposit public funds or reinvest public funds
in the institution.
(1) by direct charge to the deposit or other account; or
(2) in