Which advice means brand new views of Workplace of State Comptroller at that time it absolutely was rendered

The view ong anything, there had been further judge cases or statutory amendments one to sustain to the circumstances chatted about on advice.

General Municipal Law 10(3), 11(2): This new conditions from General Municipal Law 10(1)(h) you to restrict to help you 3 months the phrase out-of an enthusiastic qualified page regarding borrowing issued just like the cover to possess local government places and you will investments do not affect a keen irrevocable letter from borrowing approved because of the a qualifying government financial lender.

Specifically, you ask whether or not the specifications from General Municipal Rules 10(1)(h) one basically limitation so you’re able to 3 months the definition of regarding an enthusiastic qualified page regarding borrowing from the bank approved just like the cover having state government dumps and you will investments relates to an enthusiastic irrevocable letter out-of borrowing granted of the an FHLB.

General Civil Legislation 10 and 11 regulate the deposit and you can short term capital of monies because of the local governments, also areas. Under General Municipal Rules 10 and 11, most of the dumps and you can assets more than the quantity covered significantly less than terms of your own Federal Deposit Insurance Act step one need to be shielded in accordance with Standard Municipal Rules 10(3) (General Civil Law 10, 11).

This really is in reaction into the query regarding the entry to a letter regarding borrowing granted because of the a national financial lender (hereinafter FHLB) while the cover to own state deposits

Standard Civil Laws 10(3) provides multiple options for protecting particularly excessive quantity, such as the greeting out-of an qualified letter out of credit, payable on the local government, as the coverage to your payment of one hundred 40 per cent, of your own aggregate number of personal dumps in the state, and you will arranged focus (General Civil Rules 10[c][i]). Eligible letter from credit is set for this specific purpose generally Municipal Law 10(1)(h) so you’re able to mean:

[A]n irrevocable letter of credit issued in favor of the local government for a phrase never to surpass 3 months of the a financial (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).

Municipal Funds — Deposits and Assets (title off an enthusiastic irrevocable letter from credit provided because the protection by a being qualified government financial financial)

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 2000 pay day loan 10 of the General Municipal Law.

Standard Municipal Rules 10(3)(c) try revised during the 2002, however, in order to particularly resource the latest enjoy of the regional governing bodies of an enthusiastic irrevocable letter regarding borrowing from the bank given from the a keen FHLB so you can safe excessive places (L 2002, ch 615, active endment and additionally renumbered present section (c) regarding subdivision step three off section ten, since the the fresh new subparagraph (c)(i).