So it opinion represents brand new feedback of one’s Work environment of Condition Comptroller during the time it had been made

The new viewpoint ong anything else, there have been after that legal circumstances otherwise statutory amendments you to definitely incur with the things discussed from the opinion.

Standard Municipal Law §§10(3), 11(2): The fresh specifications from General Municipal Rules §10(1)(h) you to definitely restriction in order to 90 days the term of a keen “qualified letter from borrowing from the bank” approved given that cover to have local government dumps and you may investments do not apply to an irrevocable page out-of borrowing from the bank issued by a being qualified federal financial financial.

Specifically, you ask whether or not the terms out of General Civil Law §10(1)(h) that basically restriction in order to 90 days the phrase away from a keen “qualified page of credit” provided while the safeguards to own state dumps and you may investment applies to an irrevocable letter regarding credit awarded because of the an enthusiastic FHLB.

General Municipal Laws §§10 and you may 11 govern new deposit and you can temporary investment away from funds of the local governing bodies, together with counties. Less than Standard Civil Laws §§10 and you may 11, all the dumps and you may expenditures in excess of the total amount insured significantly less than provisions of one’s Federal Put Insurance rates Operate step 1 should be protected prior to Standard Civil Law §10(3) (General Municipal Rules §§ ten, 11).

This will be in response to your query concerning your the means to access a letter from borrowing from the bank awarded by the a federal financial financial (hereinafter “FHLB”) as protection to possess condition deposits

Standard Municipal Rules §10(3) brings multiple alternatives for protecting particularly too-much quantity, including the desired from an “qualified letter off borrowing from the bank”, payable to your state government, since cover “towards commission of just one hundred or so forty percent, of one’s aggregate amount of societal deposits” throughout the state government, and decided attention (Standard Civil Laws § 10[c][i]). “Qualified letter from borrowing from the bank” is set for this reason overall Civil Law §10(1)(h) to help you mean:

[A]n irrevocable letter of credit issued in favor of the local government for a term not to surpass 90 days of the a lender (other than the bank with which the money is being deposited or invested) whose commercial paper and other unsecured short-term debt obligations (or, in the case of a bank which is the principal subsidiary of a holding company, whose holding company’s commercial paper and other unsecured short-term debt obligations) are rated in one of the three highest rating categories (based on the credit of such bank or holding company) by at least one nationally recognized statistical rating organization or by a bank (other than the bank with which the money is being deposited or invested) that is [in compliance] with applicable federal minimum risk-based capital requirements (emphasis added).

Municipal Loans — Dumps and Expenditures (name regarding an irrevocable page regarding borrowing from the bank issued since the security of the a being qualified federal home loan bank)

For purposes of General Municipal Law §10, a “bank” is defined to mean a national banking association (see 12 USC §21 et seq.) or a corporation, other than a trust company, organized under or subject to the provisions of article 3 of the New York State Banking Law (General Municipal Law §10[d]; Banking Law §2). FHLBs, which are supervised by the Federal Housing Finance Board, are separate regional corporations, owned by those savings and loan associations, cooperative banks, homestead associations, insurance companies, savings bank, and other insured depository institutions within the region that are eligible and have become members of the FHLB (12 USC §§1422a, 1424, 1426, 1432). 2 As such, they do not fall within the definition of “bank” for purposes of acceptance of an “eligible letter of credit” under section 10 of the General Municipal Law.

Standard Civil Laws § 10(3)(c) are revised in 2002, although not, so you’re able to specifically resource this new allowed by the regional governing bodies of an “irrevocable letter out of borrowing” granted from the a keen FHLB to safe too much dumps (L 2002, ch 615, effective endment in addition to renumbered existing section (c) off subdivision 3 out-of section 10, given that the newest subparagraph (c)(i).

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