Arizona Laws 6-245. Pledge of assets; rediscount; exception to requirement of security
A. A bank may pledge, mortgage or otherwise hypothecate its assets:
Terms Used In Arizona Laws 6-245
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Bank: means a corporation that holds a banking permit issued pursuant to chapter 2 of this title. See Arizona Laws 6-101
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Deed: The legal instrument used to transfer title in real property from one person to another.
- Deputy director: means the deputy director of the financial institutions division of the department. See Arizona Laws 6-101
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- United States: includes the District of Columbia and the territories. See Arizona Laws 1-215
1. To qualify the bank to act as a fiscal agent for any governmental entity.
2. To secure deposits which are required by law to be secured.
3. To secure borrowings from one business day to the next from another bank.
4. To secure borrowings from a federal reserve bank or any federal agency.
5. To secure other obligations, exclusive of deposits, provided the aggregate value of the assets as carried on the books of the bank encumbered for purposes other than those specified in paragraphs 1 through 4 of this subsection shall not exceed the capital account of the bank except with the approval of the deputy director.
B. Subsection A of this section does not prohibit or limit the sale or rediscount of commercial paper or securities with endorsement, guarantee or agreement to repurchase.
C. If, by the law of this state, a bank is required to provide security for deposits in the form of collateral, surety bond or any other form, such security is not required to the extent such deposits are insured by the federal deposit insurance corporation. For the purposes of this subsection, acceptable security for deposits includes:
1. Certificates of deposit insured by an agent or instrumentality of the United States.
2. Interest bearing savings deposits in banks and savings and loan associations doing business in this state whose accounts are federally insured.
3. United States government obligations.
4. Municipal bonds and bonds issued by a state, county or school district.
5. Obligations for which the payment of principal and interest is guaranteed by the United States or by an agency or instrumentality of the United States.
6. Registered warrants if offered as security for monies of the county by which they are issued.
7. First mortgages and trust deeds together with the promissory notes or other evidences of indebtedness described in the instruments on improved, otherwise unencumbered real estate located in this state if no single mortgage or trust deed represents more than ten percent of the total collateral security and the promissory note or other evidence of indebtedness secured by the mortgage or trust deed has been in existence for at least three years and no default with respect to the promissory note or other evidence of indebtedness has occurred during its existence.