This opinion is short for brand new feedback of your own Office of your State Comptroller during the time it absolutely was rendered

The latest viewpoint ong other things, there were after that courtroom cases otherwise statutory amendments one happen for the situations talked about on advice.

General Civil Rules 10(3), 11(2): New specifications away from Standard Civil Rules 10(1)(h) one to restrict so you can ninainsi quey days the term out-of an enthusiastic qualified page out of borrowing from the bank given due to the fact security getting local government dumps and you may investments dont apply to a keen irrevocable letter out of borrowing from the bank issued by the a qualifying government home loan bank.

Particularly, you may well ask if the terms regarding Standard Civil Law 10(1)(h) one basically restrict in order to 3 months the phrase of an enthusiastic qualified page regarding credit provided given that protection to own state government dumps and investments applies to an irrevocable letter out of credit issued because of the a keen FHLB.

General Municipal Law ten and you can 11 govern the fresh put and you will short term investment from monies because of the local governments installment loan lender Hudson PA, as well as counties. Around Standard Municipal Law ten and you may eleven, all the dumps and assets over the total amount insured lower than terms of Government Deposit Insurance Act step one have to be secured according to Standard Municipal Laws 10(3) (Standard Municipal Rules 10, 11).

This really is in reaction towards inquiry regarding the accessibility a page out-of borrowing provided because of the a federal home loan bank (hereinafter FHLB) just like the cover getting county dumps

Standard Municipal Laws 10(3) brings several options for securing including extreme wide variety, such as the invited of an enthusiastic eligible letter away from borrowing from the bank, payable to the local government, because the protection to your commission of just one hundred 40 percent, of your own aggregate quantity of public deposits throughout the state government, and you may decided desire (General Civil Laws 10[c][i]). Eligible page out-of borrowing is set for this function typically Municipal Laws 10(1)(h) so you’re able to imply:

[A]n irrevocable letter of credit issued in favor of the local government for a term to not ever exceed 90 days of the a lender (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 — Dumps and you can Investment (identity regarding a keen irrevocable letter away from borrowing issued because the safeguards because of the a being qualified federal home loan 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, 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 Civil Law 10(3)(c) is actually amended inside the 2002, yet not, in order to particularly site brand new enjoy by the local governing bodies off a keen irrevocable page regarding borrowing from the bank issued by the an FHLB in order to safe way too much dumps (L 2002, ch 615, effective endment and renumbered present section (c) regarding subdivision step three off part ten, given that the latest subparagraph (c)(i).