(a)  Every qualified public depository shall, at a minimum insure or pledge eligible collateral equal to one hundred percent (100%) of public deposits which are time deposits with maturities greater than sixty (60) days, and which were maintained with that depository institution as of October 1, 1991; provided, that any qualified depository institution which does not meet its minimum capital standard as prescribed by its federal regulator shall insure or pledge eligible collateral equal to one hundred percent (100%) of all public deposits maintained with that depository institution as of October 1, 1991. The amount of eligible collateral required shall be determined when funds are deposited for time deposits, and at the end of each month for demand deposits. The amount of required insurance shall be determined in accordance with § 35-10.1-8.

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Terms Used In Rhode Island General Laws 35-10.1-3

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Power of attorney: A written instrument which authorizes one person to act as another's agent or attorney. The power of attorney may be for a definite, specific act, or it may be general in nature. The terms of the written power of attorney may specify when it will expire. If not, the power of attorney usually expires when the person granting it dies. Source: OCC

(b)  All eligible collateral shall be designated as security for public deposits under this chapter and shall be segregated from the depository institution’s other assets, by:

(1)  Depositing the collateral in a custodial account at the federal reserve bank or federal home loan bank for the district in which the qualified depository institution is located;

(2)  Depositing the collateral in a custodial account in the qualified depository institution’s trust department or in the trust department of another qualified depository institution; provided, that the terms under which the collateral is to be held are set forth in a written custodial agreement; and provided, further, that no creditor of the depository institution that pledged the collateral may have or obtain rights in the collateral that are superior to the rights of the public depositor; or

(3)  When the collateral is held in book entry form, notifying the custodian of the collateral that it has been pledged as collateral for a public deposit.

(c)  If eligible collateral has been designated and segregated as provided in this section, the public depositor shall be deemed to have a perfected security interest therein.

(d)  The qualified depository institution shall deliver to the general treasurer, municipal finance officer, or chief financial officer a power of attorney authorizing the general treasurer, municipal finance officer, or chief financial officer to transfer or liquidate these securities in the event of default, financial failure, or insolvency of a depository institution.

History of Section.
P.L. 1991, ch. 44, art. 74, § 1.