Brand new opinion ong anything else, there have been after that judge circumstances or statutory amendments you to definitely bear toward situations talked about in the opinion.
General Municipal Laws 10(3), 11(2): The latest terms from Standard Civil Law 10(1)(h) that restrict to help you 90 days the word off a keen qualified page from credit given once the protection to possess state government places and you can opportunities dont apply to a keen irrevocable letter out-of borrowing given by the a being qualified government mortgage financial.
Specifically, you may well ask whether the specifications out of General Municipal Law 10(1)(h) one basically maximum so you’re able to 3 months the definition of regarding a keen qualified page of borrowing from the bank issued since coverage getting local government dumps and you may assets relates to an enthusiastic irrevocable page away from credit awarded because of the a keen FHLB.
Standard Civil Legislation 10 and eleven regulate the new deposit and you can brief investment of monies because of the regional governing bodies, in addition to areas. Around General Civil Laws 10 and eleven, all the dumps and you may expenditures in excess of the amount insured under terms of the Federal Put Insurance rates Operate 1 have to be secured according to General Civil Laws 10(3) (Standard Civil Rules ten, 11).
This really is responding towards inquiry regarding the usage of a letter out-of borrowing from the bank granted because of the a national home loan bank (hereinafter FHLB) given that protection to have state deposits
Standard Civil Rules 10(3) provides numerous choices for securing for example way too much numbers, such as the greeting from an eligible page away from borrowing from the bank, payable to your local government, while the cover towards the commission of just one hundred or so 40 %, of your own aggregate number of social deposits on state, and agreed upon attract (Standard Municipal Rules 10[c][i]). Qualified letter regarding credit is defined for this reason in general Municipal Law 10(1)(h) so you can suggest:
[A]n irrevocable letter of credit issued in favor of the local government for a term not to ever exceed 3 months by a bank (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).
Civil Fund — Dumps and you will Assets (identity out of a keen irrevocable letter off borrowing from the bank issued while the security from the a qualifying government mortgage 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.
General Municipal Rules 10(3)(c) was revised for the 2002, although not, to help you specifically source the newest allowed of the regional governing bodies away from an enthusiastic irrevocable page from credit awarded by a keen FHLB to safe excessive deposits (L 2002, ch 615, effective endment and additionally renumbered established paragraph (c) out-of subdivision step 3 from area 10, just like the the fresh get $600 loan instantly subparagraph (c)(i).