51A-10-9. Preferential deposits.
219 words·~1 min read·
/sd/title-51/chapter-51-10/51a-10-9·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
No bank may give preference to any depositor or creditor by pledging the assets of the bank as collateral security except as provided in § 51A-4-13 and as follows:
(1)The bank may deposit with the treasurer of the United States so much of its assets as may be necessary to qualify as a depository for federal funds and bankruptcy court funds;
(2)A bank, in order to qualify as a depository of funds deposited by the state, any political subdivision thereof, including counties, municipalities, townships, and school districts, or by any officer, commission, board, bureau, or agency of the state or political subdivision or any tribal government, shall segregate as security, investment securities as provided in §§ 51A-4-25 and 51A-4-26 , or irrevocable standby letters of credit, or a surety bond, in accordance with § 4-6A-3 , a sum equal to one hundred percent of the amount deposited in excess of the amount insured by the Federal Deposit Insurance Corporation;
(3)A bank may pledge securities to guarantee deposit of out-of-state municipal, school district, county, or state funds in excess of the amount insured by the federal deposit insurance corporation;
(4)The public deposits preferred by this section are hereby granted a paramount, preferred, and perfected first lien on the bank assets so deposited or segregated or pledged.