ORS 709.220
Handling of funds awaiting investment or distribution

  • security for use of funds

(1)

Funds placed or held in trust by a trust company awaiting investment or distribution shall not be held uninvested or undistributed for a longer period than is reasonable for the proper management of the account, shall be carried in a separate account and shall not be used by the trust company, bank or extranational institution in the conduct of its business or in the conduct of the business of any of its affiliates, except that such funds may be deposited in the commercial or savings or other department of the trust company, bank or extranational institution if the trust company, bank or extranational institution first obtains and sets aside in its trust department:

(a)

Bonds or other securities eligible for the investment of trust funds;

(b)

A surety bond;

(c)

An irrevocable letter of credit issued by an insured institution, as defined in ORS 706.008 (Additional definitions for Bank Act); or

(d)

A combination of the securities, letters of credit and surety bond.

(2)

The surety bond shall be issued by a surety company authorized to transact business in this state and approved by the Director of the Department of Consumer and Business Services. The bond or letter of credit shall provide that the principal and surety or letter of credit issuer shall indemnify the several owners of the funds held in trust against loss due to the failure of the trust company, bank or extranational institution.

(3)

Notwithstanding the provisions of ORS 708A.415 (Securing deposits by surety bond, letter of credit or insurance), the securities, the surety bond, the letter of credit or the securities, the surety bond and the letters of credit together shall be in an amount equal to the portion of the trust funds not insured by the United States Government or any agency or instrumentality of the United States.

(4)

If the trust company, bank or extranational institution fails, the owners of the funds held in trust for investment or distribution have a lien on the bonds or other securities set apart, or a right of action on the surety bond and upon the letter of credit, in addition to their claim against the estate of the trust company, bank or extranational institution. [Amended by 1957 c.82 §2; 1973 c.797 §200; 1975 c.544 §29d; 1983 c.296 §5a; 1987 c.216 §5; 1991 c.331 §115; 1997 c.631 §216]

Source: Section 709.220 — Handling of funds awaiting investment or distribution; security for use of funds, https://www.­oregonlegislature.­gov/bills_laws/ors/ors709.­html.

709.005
Certificate of authority to transact trust business
709.015
Organization as limited liability company
709.030
Approval to transact trust business
709.040
Securities eligible for deposit
709.050
Trust companies depositing securities guaranteed by mortgage insurance and mortgage participation certificates
709.060
Primary liability of deposit
709.070
Right of action against deposit
709.080
Charges for handling securities
709.110
Deposit of documents with notes or bonds
709.120
Substitution of deposit securities
709.130
Indemnity bond when cash and securities of fiduciary account exceed stockholders’ equity or members’ equity in trust company
709.140
Return of deposit
709.145
Investment of capital
709.150
General powers of trust companies
709.160
Solicitation and performance of legal business
709.170
Establishment of and investment in common trust funds
709.175
Limitation on investment of trust funds
709.190
Trust department kept separate
709.200
Acquisition or investment of trust property in own name or name of nominee
709.210
Disclosure of fiduciary character or terms of trust instrument
709.220
Handling of funds awaiting investment or distribution
709.240
Oath and bond exemption for trust company appointed as fiduciary
709.270
Disclosure of communications and writings
709.280
Loans to directors, officers, employees or affiliates
709.290
Closing of trust unduly delayed
709.300
Transaction of trust business by national bank
709.330
Sale or transfer of assets or liabilities
709.335
Digital signatures
709.340
Trust company quitting business
709.350
Successor trustee upon liquidation or receivership
709.390
Discontinuance of trust business
709.400
Order to start court action
709.410
Termination of right to do trust business
709.420
Actions or suits on claims
709.430
Release or payment of deposit pending suit
709.440
Director’s charges as prior lien on deposit
709.450
Sale and disposition of securities to pay expenses, costs and claims
709.460
Application of ORS 709.390 to 709.450 to merger or consolidation
709.520
Conversion to out-of-state trust company
709.525
Merger or acquisition
709.530
Applicability of ORS 711.190, 711.197 and 711.199 to merging or converting trust company
709.535
Sale of assets or transfer of liabilities
709.540
Rights of stockholder of trust company party to merger, share exchange or acquisition
709.600
Regulation of trust business by corporations formed prior to adoption of Bank Act
709.980
Civil penalties
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