It advice represents the feedback of your Work environment of Condition Comptroller during the time it had been made

New advice ong anything, there had been subsequent courtroom cases otherwise legal amendments you to definitely incur on items discussed on viewpoint.

General Municipal Law 10(3), 11(2): The latest terms away from Standard Municipal Rules 10(1)(h) one to maximum to help you 3 months the expression away from a keen qualified page off borrowing from the bank awarded because the safety for local government dumps and you will financial investments do not apply at an enthusiastic irrevocable letter away from credit issued from the a being qualified government mortgage lender.

Especially, you ask whether the arrangements away from General Civil Rules 10(1)(h) that generally limit to help you ninety days the expression out of an eligible page regarding borrowing issued once the security getting local government places and you can opportunities applies to an irrevocable page out-of credit given of the an enthusiastic FHLB.

Standard Municipal Laws 10 and 11 control new put and you can temporary money away from funds by the local governments, also counties. Significantly less than Standard Civil Laws 10 and you can eleven, all dumps and you will opportunities more than extent insured not as much as arrangements of the Government Deposit Insurance coverage Act step 1 must be secure in line with General Municipal Laws 10(3) (General Municipal Rules 10, 11).

This is certainly as a result on query regarding your access to a letter of borrowing from the bank given by a federal home loan bank (hereinafter FHLB) due to the fact defense having county places

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Standard Municipal Rules 10(3) will bring numerous choices for protecting eg continuously numbers, such as the greeting away from an eligible letter out-of borrowing, payable for the state government, due to the fact coverage into percentage of one hundred 40 per cent, of the aggregate number of social dumps in the state government, and you may decideded upon notice (Standard Municipal Law 10[c][i]). Eligible letter of borrowing is defined for this reason generally Municipal Laws 10(1)(h) so you can imply:

[A]n irrevocable letter of credit issued in favor of the local government for a term not to ever go beyond ninety days by the 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 Finance — Places and you will Assets (term out of a keen irrevocable letter from borrowing granted due to the fact shelter because of the a qualifying government financial lender)

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 monthly installment loans Atlanta GA, 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 Laws 10(3)(c) is actually revised inside the 2002, however, to help you especially resource the fresh allowed because of the regional governing bodies out-of an irrevocable letter out-of borrowing approved from the an FHLB to help you secure a lot of deposits (L 2002, ch 615, energetic endment including renumbered present paragraph (c) regarding subdivision 3 of point 10, while the new subparagraph (c)(i).