2017 ORS 295.038¹
Distribution of collateral after loss in credit union depository
  • assessments

(1) A credit union depository’s deposit of securities with a custodian under ORS 295.001 (Definitions for ORS 295.001 to 295.108) to 295.108 (State Treasurer rules) constitutes the credit union depository’s consent to the disposition of the securities in accordance with this section.

(2) If a loss occurs in a credit union depository, the credit union depository shall, as soon as possible, pay to the proper public officials all funds subject to the loss in accordance with the following procedures:

(a) Immediately after the loss occurs, the State Treasurer shall take possession of securities that the closed depository’s custodian has segregated as collateral for uninsured public funds deposits of the closed depository. The State Treasurer shall immediately liquidate as much of the collateral as the State Treasurer estimates is necessary, based on the most recent information available to the State Treasurer concerning the amount of uninsured public funds the credit union depository holds, and distribute 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 a receiver shall, within 20 days after issuing a restraining order or taking possession of the credit union depository, ascertain from the credit union depository’s records the amount of public funds on deposit in the credit union depository and the amount of public funds that are covered by deposit insurance or deposit guaranty bonds. The director or the receiver shall certify the amounts to the State Treasurer and to each public official who has public funds on deposit in the credit union depository.

(c) Within 10 days after receiving the certification from the director or the receiver, a public official who has public funds on deposit in the credit union depository shall furnish to the State Treasurer verified statements of the public funds that the public official has on deposit in the credit union depository.

(3) When the State Treasurer receives the certification from the director or the receiver and the verified statements from the public officials who have public funds on deposit in the credit union depository, the State Treasurer shall ascertain and fix the amount of public funds on deposit in the credit union depository, plus interest to the date the funds are distributed to the public official at the rate the credit union depository agreed to pay on the funds, minus any amount that deposit insurance or deposit guaranty bonds cover.

(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 credit union depositories as follows:

(a) First, against the credit union depository that suffered the loss, to the extent of the full value of the proceeds from the State Treasurer’s liquidation of the credit union depository’s collateral under subsection (2) of this section, plus the State Treasurer’s estimate of the amount of proceeds the State Treasurer expects to receive from collateral the State Treasurer has not yet liquidated; and

(b) Second, against all other credit union depositories on a proportionate basis determined as provided in subsection (5) of this section. The amount the State Treasurer assesses against another credit union depository may not exceed the credit union depository’s maximum liability.

(5) For purposes of subsection (4) of this section, the State Treasurer shall determine the proportionate share of each of the other credit union depositories by:

(a) Averaging, for each credit union depository, the total amounts of all uninsured public funds deposits the credit union depository reported on the credit union depository’s last two treasurer reports;

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

(c) Dividing the result of the calculation performed under paragraph (a) of this subsection by the results 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 a public official’s uninsured public funds deposits only against the closed depository and not against other credit union depositories, if the public official:

(a) Received appropriate notice about the closed depository from the State Treasurer under ORS 295.018 (Increase in required collateral of depository) (6)(a) or 295.031 (Notice to public officials regarding adequacy of collateral) (1) 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 failing 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) Assessments the State Treasurer makes against the closed depository are payable immediately from the proceeds of the collateral delivered to the State Treasurer. Assessments the State Treasurer makes against other credit union depositories are payable on the fifth business day following demand. If a credit union depository fails to pay an assessment, the State Treasurer shall take possession of and liquidate the securities the credit union depository segregated as collateral for uninsured public funds deposits that the credit union depository holds, or shall liquidate as much of the securities as is necessary to pay the credit union depository’s assessment.

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

(9) If, after all other available sources are applied, the amounts the State Treasurer receives from the assessments are inadequate to meet the total claims of the public officials to uninsured public funds deposits, the public officials may make claims against the closed depository as general creditors, but not against a credit union depository other than the closed depository.

(10)(a) If the final amount of proceeds the State Treasurer receives from the liquidation of collateral 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 the State Treasurer receives from the liquidation of collateral from other credit union depositories exceeds the amount of the assessment against the other credit union depositories under subsection (4)(b) of this section, the State Treasurer shall pay the excess to the other credit union depositories in proportion to the amounts the other credit union depositories paid in assessments to the State Treasurer.

(c) If the final amount of proceeds the State Treasurer receives from the liquidation of collateral from a credit union depository other than the closed depository under subsection (7) of this section exceeds the amount of the assessment against the credit union depository, the State Treasurer shall pay the excess to the credit union 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 in accordance with this section. [2010 c.101 §12]

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.