2011 ORS § 295.015¹
Maintenance of securities by bank depository

Except as provided in ORS 295.018 (Increase in required collateral of bank depository):

(1)(a) Each bank depository throughout the period of its possession of any uninsured public funds deposits shall maintain on deposit with its custodian, at its own expense, securities having a value at least equal to its minimum collateral requirement and as otherwise prescribed in ORS 295.001 (Definitions for ORS 295.001 to 295.108) to 295.108 (State Treasurer rules). Such collateral shall be deposited with the bank depositorys custodian and shall be clearly designated by the bank depository and the custodian as security for the benefit of depositors of public funds under ORS 295.001 (Definitions for ORS 295.001 to 295.108) to 295.108 (State Treasurer rules).

(b) For purposes of this section, when pledged as collateral for public funds deposits, loans described in ORS 295.001 (Definitions for ORS 295.001 to 295.108) (19)(f) shall be discounted to 75 percent of the unpaid principal balance owing on the loan from time to time, or to a lower value determined by the State Treasurer from time to time.

(c) When a bond anticipation note is pledged as collateral for public funds deposits, if there is no readily determinable market value for the note, it shall be discounted to 75 percent of the unpaid principal balance owing on the note from time to time, or to a lower value determined by the State Treasurer from time to time.

(2) The bank depository may deposit other eligible securities with its custodian and withdraw from deposit securities theretofore pledged to secure deposits of public funds, if the remaining securities have a value not less than its minimum collateral requirement. The State Treasurer shall execute such releases and surrender such custodians receipts as are appropriate to effect substitutions and withdrawals of matured and excess pledged securities.

(3) If a bank depositorys minimum collateral requirement increases because it ceases to be a well capitalized bank depository as reflected in the bank depositorys last treasurer report, call report or other public filing, or if the bank depository receives notice from the bank depositorys custodian under ORS 295.013 (Custodians receipt) (2)(d) or the State Treasurer:

(a) Within three business days after the date on which the bank depositorys minimum collateral requirement increases, the bank depository shall notify its custodian, the Director of the Department of Consumer and Business Services and the State Treasurer in writing that the bank depositorys minimum collateral requirement has increased, setting forth the bank depositorys new minimum collateral requirement and the bank depositorys plan for increasing its pledged collateral to the minimum collateral requirement; and

(b) Within five business days after the date on which the bank depositorys minimum collateral requirement increases, or within a longer period approved by the State Treasurer and the director, the bank depository shall, in accordance with the plan approved by the State Treasurer and the director, tender to its custodian additional securities having sufficient value to increase the total value of its securities pledged as collateral for public funds deposits to the new minimum collateral requirement of the bank depository.

(4) If a bank depositorys minimum collateral requirement decreases because it moves from being an undercapitalized bank depository or an adequately capitalized bank depository to being a well capitalized bank depository, or because the State Treasurer no longer requires the bank depository to pledge additional collateral under ORS 295.018 (Increase in required collateral of bank depository), the bank depository may:

(a) Notify its custodian and the State Treasurer in writing that the bank depositorys minimum collateral requirement has decreased, setting forth the bank depositorys new minimum collateral requirement; and

(b) With the written approval of the State Treasurer, withdraw from its custodian any securities that exceed the bank depositorys new minimum collateral requirement.

(5) The State Treasurer shall act upon requests for releases and withdrawals of securities under subsections (2) and (4)(b) of this section within three business days after the receipt of each request. [1967 c.451 §2; 1975 c.515 §3; 2007 c.871 §17; 2009 c.821 §6]

Note: The amendments to 295.015 (Maintenance of securities by bank depository) by section 7, chapter 101, Oregon Laws 2010, become operative January 1, 2013, and apply to public funds on deposit on or after January 1, 2013. See section 29, chapter 101, Oregon Laws 2010, as amended by section 2, chapter 667, Oregon Laws 2011, and see section 30, chapter 101, Oregon Laws 2010. The text that is operative on and after January 1, 2013, is set forth for the users convenience.

295.015 (Maintenance of securities by bank depository). Except as provided in ORS 295.018 (Increase in required collateral of bank depository):

(1)(a) A depository throughout the period during which the depository possesses uninsured public funds deposits shall maintain on deposit with the depositorys custodian, at the depositorys own expense, securities that have a value at least equal to the depositorys minimum collateral requirement and as otherwise prescribed in ORS 295.001 (Definitions for ORS 295.001 to 295.108) to 295.108 (State Treasurer rules). The depository shall deposit the collateral with the depositorys custodian and the depository and the custodian shall clearly mark the collateral as security for public funds deposited in accordance with ORS 295.001 (Definitions for ORS 295.001 to 295.108) to 295.108 (State Treasurer rules).

(b) For purposes of this section, when pledged as collateral for public funds deposits, loans described in ORS 295.001 (Definitions for ORS 295.001 to 295.108) (19)(f) must be discounted to 75 percent of the unpaid principal balance owing on the loan from time to time, or to a lower value that the State Treasurer determines from time to time.

(c) A bond anticipation note that is pledged as collateral for public funds deposits and for which there is no readily determinable market value must be discounted to 75 percent of the unpaid principal balance owing on the note from time to time, or to a lower value that the State Treasurer determines from time to time.

(2) A depository may deposit other eligible securities with the depositorys custodian and withdraw from deposit securities that the depository pledged to secure deposits of public funds if the remaining securities have a value not less than the depositorys minimum collateral requirement. The State Treasurer shall execute releases and surrender custodians receipts that are appropriate to effect substitutions and withdrawals of matured and excess pledged securities.

(3) If a depositorys minimum collateral requirement increases because the depository ceases to be a well capitalized depository as reflected in the depositorys last treasurer report, call report or other public filing, or if the depository receives notice from the depositorys custodian under ORS 295.013 (Custodians receipt) (2)(d) or from the State Treasurer:

(a) Within three business days after the date on which the depositorys minimum collateral requirement increases, the depository shall notify the depositorys custodian, the Director of the Department of Consumer and Business Services and the State Treasurer in writing that the depositorys minimum collateral requirement has increased, setting forth the depositorys new minimum collateral requirement and the depositorys plan for increasing the depositorys pledged collateral to the minimum collateral requirement; and

(b) Within five business days after the date on which the depositorys minimum collateral requirement increases, or within a longer period approved by the State Treasurer and the director, the depository shall, in accordance with the plan approved by the State Treasurer and the director, tender to the depositorys custodian additional securities that have a value sufficient to increase the total value of the depositorys securities pledged as collateral for public funds deposits to the depositorys new minimum collateral requirement.

(4) If a depositorys minimum collateral requirement decreases because the depository becomes a well capitalized depository, or because the State Treasurer no longer requires the depository to pledge additional collateral under ORS 295.018 (Increase in required collateral of bank depository), the depository may:

(a) Notify the depositorys custodian and the State Treasurer in writing that the depositorys minimum collateral requirement has decreased, setting forth the depositorys new minimum collateral requirement; and

(b) With the written approval of the State Treasurer, withdraw from the depositorys custodian securities that exceed the depositorys new minimum collateral requirement.

(5) The State Treasurer shall act upon requests for releases and withdrawals of securities under subsections (2) and (4)(b) of this section within three business days after receiving each request.