2017 ORS 295.037¹
Distribution of collateral after loss in bank depository
  • assessments

(1) The deposit of securities by a bank depository with its custodian pursuant to ORS 295.001 (Definitions for ORS 295.001 to 295.108) to 295.108 (State Treasurer rules) constitutes consent by the bank depository to the disposition of the securities in accordance with this section.

(2) When a loss has occurred in a bank depository, the bank depository shall as soon as possible make payment to the proper public officials of all funds subject to the loss, pursuant to the following procedures:

(a) Immediately upon occurrence of the loss, the State Treasurer shall take possession of the securities segregated as collateral for uninsured public funds deposits held by the closed depository and begin to liquidate as much of the collateral as the State Treasurer estimates is necessary, based upon the most recent information available to the State Treasurer on the amount of uninsured public funds deposits held by the closed depository, for distribution of the proceeds among public officials entitled to the proceeds as provided in this section.

(b) The Director of the Department of Consumer and Business Services or the receiver for the closed depository shall, within 20 days after the issuance of a restraining order or taking possession of any bank depository, ascertain the amount of public funds on deposit in the bank depository as disclosed by its records and the amount of the public funds covered by deposit insurance or deposit guaranty bonds and certify the amounts to the State Treasurer and to each public official who has public funds on deposit in the bank depository.

(c) Each public official who has uninsured public funds on deposit in the bank depository shall, within 10 days after receipt of the certification from the Director of the Department of Consumer and Business Services or the receiver, furnish to the State Treasurer verified statements of the uninsured public funds that the public official has on deposit in the bank depository.

(3) Upon receipt of the certification from the Director of the Department of Consumer and Business Services or the receiver and the verified statements from the public officials who have uninsured public funds on deposit in the bank depository, the State Treasurer shall ascertain and fix the amount of public funds on deposit in the bank depository, plus interest to the date the funds are distributed to the public official at the rate the bank depository agreed to pay on the funds, minus any amount covered by deposit insurance or deposit guaranty bonds.

(4) After making the calculation described in subsection (3) of this section, the State Treasurer shall assess the amount of uninsured public funds against all bank depositories, as follows:

(a) First, against the closed depository, to the extent of the full value of the proceeds realized from the liquidation of its collateral by the State Treasurer under subsection (2) of this section, plus the treasurer’s estimate of the amount of proceeds expected to be received from the collateral still to be liquidated by the State Treasurer; and

(b) Second, against all of the other bank depositories, on a proportionate basis determined as provided in subsection (5) of this section. The amount assessed against each other bank depository under this paragraph may not exceed the maximum liability of the bank depository.

(5) For purposes of subsection (4) of this section, the proportionate share of each of the other bank depositories shall be determined by:

(a) Averaging the total amounts of all uninsured public funds deposits reported on the bank depository’s last two treasurer reports;

(b) Averaging the aggregate total amounts of all uninsured public funds deposits reported on the last two treasurer reports of all of the bank depositories; and

(c) Dividing the result of the calculation performed under paragraph (a) of this subsection by the result of the calculation performed under paragraph (b) of this subsection.

(6) Notwithstanding the assessment provisions of subsection (4) of this section, the State Treasurer shall assess the amount of uninsured public funds deposits of a public official only against the closed depository, and not against other bank depositories, if the public official:

(a) Was given appropriate notice about the closed depository by the State Treasurer under ORS 295.018 (Increase in required collateral of depository) (6)(a), 295.031 (Notice to public officials regarding adequacy of collateral) (1) or 295.061 (Treasurer reports) (4)(a) and did not comply with ORS 295.034 (Withdrawal of inadequately collateralized funds); or

(b) Failed to timely comply with the requirements of ORS 295.006 (Depository and public official filings with State Treasurer) and, as a result of the failure to timely comply, did not receive appropriate notice about the closed depository from the State Treasurer under ORS 295.018 (Increase in required collateral of depository) (6)(a), 295.031 (Notice to public officials regarding adequacy of collateral) (1) or 295.061 (Treasurer reports) (4)(a).

(7) The assessment by the State Treasurer against the closed depository shall be payable immediately from the proceeds of the collateral delivered to the State Treasurer. Assessments made by the State Treasurer against the other bank depositories are payable on the fifth business day following demand. If any bank depository fails to pay its assessment, the State Treasurer shall take possession of and liquidate the securities segregated as collateral for uninsured public funds deposits held by the bank depository or so much of the securities as is needed to pay the bank depository’s assessment.

(8) The State Treasurer shall distribute the amounts received by the State Treasurer from the assessments, to the extent that they do not exceed the total amount of uninsured public funds deposits and accrued interest claimed by the public officials, among the public officials entitled to the proceeds in proportion to the public officials’ respective claims.

(9) If the amounts received by the State Treasurer from the assessments are inadequate, after all other available sources are applied, to meet the total claims of the public officials for the amount of their uninsured public funds deposits, the public officials may make claims against the closed depository as general creditors, but not against any bank depository other than the closed depository.

(10)(a) If the final amount of proceeds from the liquidation of collateral received by the State Treasurer from a closed depository exceeds the amount of the assessment against the closed depository under subsection (4)(a) of this section, the State Treasurer shall pay the amount of the excess to the closed depository.

(b) If the final amount of proceeds from the liquidation of collateral received by the State Treasurer from other bank depositories exceeds the amount of the assessment against the other bank depositories under subsection (4)(b) of this section, the State Treasurer shall pay the excess to the other bank depositories in proportion to the amounts paid to the State Treasurer under their assessments.

(c) If the final amount of proceeds from the liquidation of collateral received by the State Treasurer from a bank depository, other than the closed depository, under subsection (7) of this section exceeds the amount of the assessment against the bank depository, the State Treasurer shall pay the excess to the bank depository.

(11) The prohibition on transfers of assets set forth in ORS 711.410 (Transfer of assets after commission of act of insolvency or in contemplation of insolvency) does not apply to assessments, payments, transfers or sales of securities made pursuant to this section. [2007 c.871 §4; 2009 c.821 §10]

Atty. Gen. Opinions

Invest­ment of deferred compensa­tion funds, (1976) Vol 37, p 1284; county fair associa­tion as public corpora­tion, (1979) Vol 39, p 505

Chapter 295

Atty. Gen. Opinions

Invest­ment of funds by school district, (1974) Vol 36, p 827

1 Legislative Counsel Committee, CHAPTER 295—Depositories of Public Funds and Securities, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ors295.­html (2017) (last ac­cessed Mar. 30, 2018).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2017, Chapter 295, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano295.­html (2017) (last ac­cessed Mar. 30, 2018).
 
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent.