Minnesota Statutes 48.16 – Banks May Not Pledge Assets; Exceptions
No bank or trust company shall pledge, hypothecate, assign, transfer, or create a lien upon or charge against any of its assets except as follows:
Terms Used In Minnesota Statutes 48.16
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Lien: A claim against real or personal property in satisfaction of a debt.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- state: extends to and includes the District of Columbia and the several territories. See Minnesota Statutes 645.44
(1) to the state;
(2) to secure public deposits;
(3) to secure funds of trustees in bankruptcy;
(4) to secure money borrowed in good faith from other banks, trust companies, a financial agency created by act of Congress, or the state in programs specifically authorizing state banks to participate as an eligible local lender;
(5) to finance the acquisition of real estate to be carried as an asset as provided for in section 47.10;
(6) to secure a liability that arises from a transfer of a direct obligation of, or obligations that are fully guaranteed as to principal and interest by, the United States government or an agency thereof, or obligations of United States government-sponsored entities which are exempt from the registration requirements of the Securities Act of 1933, United States Code, title 15, § 77a, that the bank or trust company is obligated to repurchase;
(7) to a counterparty to secure an interest rate swap agreement.
This section shall not be construed to permit the use of assets as security for public deposits other than the securities made eligible by law for that purpose.