So it advice means new opinions of Workplace of the Condition Comptroller at the time it was made

The fresh new viewpoint ong anything else, there had been subsequent court instances otherwise legal amendments you to sustain to the affairs talked about from the thoughts.

General Civil Legislation 10(3), 11(2): The new arrangements of General Municipal Law 10(1)(h) one restrict to 90 days the expression out-of an enthusiastic qualified page away from borrowing from the bank approved since the security for state government dumps and you will assets do not affect an irrevocable letter of borrowing given by the a being qualified federal mortgage financial.

Specifically, you ask perhaps the conditions off Standard Civil Laws 10(1)(h) you to definitely fundamentally limit so you’re able to 3 months the definition of out of a keen eligible letter out-of borrowing from the bank granted as the security to own local government places and expenditures pertains to an irrevocable page off borrowing from the bank awarded by an enthusiastic FHLB.

General Municipal Rules ten and you can 11 govern the fresh new deposit and you can short term financial support out of monies of the local governments, along with areas. Less than General Civil Laws ten and you can eleven, all the places and you may assets in excess of the amount covered not as much as specifications of your own Federal Put Insurance policies Work 1 have to be secure according to Standard Municipal Rules 10(3) (General Municipal Law ten, 11).

It is responding with the inquiry concerning your the means to access a letter out of credit awarded from the a national financial financial (hereinafter FHLB) due to the fact security to possess condition dumps

General Civil Rules 10(3) will bring multiple choices for protecting for example continuously quantity, for instance the greet off an enthusiastic eligible page of borrowing, payable to your local government, once the cover into payment of one hundred forty percent, of your own aggregate amount of public dumps on the local government, and you may decideded upon attract (General Civil Laws 10[c][i]). Qualified letter regarding borrowing from the bank is scheduled for this specific purpose typically Municipal Laws 10(1)(h) to mean:

[A]n irrevocable letter of credit issued in favor of the local government for an expression not to go beyond 90 days because 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 Finance – Deposits and you may Expenditures (label off an irrevocable page off borrowing from the bank approved as the coverage of the a being qualified federal mortgage 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 installment loan Bakersfield 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 Law 10(3)(c) try revised within the 2002, however, to especially site the brand new desired from the regional governments out-of an enthusiastic irrevocable page from borrowing from the bank issued because of the a keen FHLB to safe excess deposits (L 2002, ch 615, productive endment plus renumbered existing paragraph (c) regarding subdivision step three off section 10, as the latest subparagraph (c)(i).