Current through Register Vol. 47, No. 17, September 10, 2024
4-1.
Definitions.
(a) "Association" means any state or
federally chartered savings and loan association having an office in the State
of Colorado.
(b) "Custodian" means
a state or national bank in Colorado, a savings and loan association in
Colorado, a Federal Home Loan Bank or branch thereof, or a Federal Reserve Bank
or branch thereof which holds eligible collateral in trust, escrow, or
safekeeping pursuant to C.R.S.
11-47-109.
(c) "Depository" means an association which
has been designated an eligible public depository.
(d) "Deposit pledge agreement" means a
written agreement between the custodian and the depository wherein the
depository transfers or delivers eligible collateral to a custodian in trust,
escrow, or safekeeping pursuant to the Savings and Loan Association Public
Deposit Protection Act for the purpose of securing 100% of the aggregate amount
of public deposits accepted and held by the depository which exceed that amount
insured by the Federal Deposit Insurance Corporation or its
successor.
(e) "Segregation of
collateral" means the transfer and delivery of eligible collateral by an
association pursuant to a deposit pledge agreement.
4-2.
Determination of Current Market
Quotation of Eligible Collateral.
The current market quotation of eligible collateral pledged
by a depository under the Savings and Loan Association Public Deposit
Protection Act shall be determined as follows:
(a) If the eligible collateral is regularly
traded and its value regularly quoted by the Federal Reserve Bank of New York
or a securities dealer, the current market quotation shall be as reported by
said Federal Reserve Bank of New York or securities dealer in its published
quotation sheets.
(b) Except as
provided in subsection (a) hereof, the current market quotation of eligible
collateral shall be as determined by a licensed Colorado securities
dealer.
(c) If the current market
quotation is determined by a licensed Colorado securities dealer pursuant to
subsection (b), the reports submitted to the Commissioner by the depository
shall include written confirmation of a current market quotation. Such written
confirmation shall be signed by said securities dealer.
(d) For eligible collateral consisting of
obligations wholly or partially guaranteed or insured as to payment of
principal by the United States or any agency thereof, or other obligations
evidenced by notes secured by first lien mortgages or deeds of trust, the
amount eligible for collateral pledging is 75% of the unpaid principal
balance.
4-3.
Mandatory Segregation and Identification of Collateral.
All eligible collateral required to be maintained or pledged
under the Savings and Loan Association Public Deposit Protection Act shall be
segregated from the other assets of the depository and held by a custodian in
trust, escrow, or safekeeping, pursuant to a deposit pledge agreement. Each
depository shall file a current executed copy of said deposit pledge agreement
with the Commissioner. All collateral so held shall be clearly identified as
being security maintained or pledged for the aggregate amount of uninsured
public deposits accepted and held on deposit by the specific depository.
4-4.
Provisions to be
Included in Deposit Pledge Agreements.
With respect to the segregation of collateral, each deposit
pledge agreement between the custodian and the depository shall be in a form
prescribed by the Commissioner and shall contain the following
provisions:
(a) That upon receiving
notice of default and seizure from the Commissioner, pursuant to C.R.S.
11-47-113, the custodian
maintaining custody of eligible collateral for the depository shall immediately
surrender title and possession of said collateral to the Commissioner.
(b) That for the purpose of
transfer of collateral to the custodian, in the case of insured, guaranteed or
conventional mortgage loans, the original note and deed of trust, at minimum,
shall be transferred. For other types of collateral, the security instrument
itself or the original safekeeping receipt for such security shall be
transferred.
(c) That the agreement
shall be terminated (1) if the Commissioner seizes all eligible collateral
pledged, or (2) by either party to the agreement, if 10 days' prior written
notice thereof is given to the other party and if such termination is approved
by the Commissioner. Upon any such termination, any remaining eligible
collateral pledged hereunder shall be returned to depository, and the custodian
shall be relieved of all further responsibility under the agreement.
(d) That if said custodian is a Federal Home
Loan Bank or a Federal Reserve Bank, the custodian shall promptly, upon the
request of the Commissioner and in a form prescribed by the Commissioner,
provide a written inventory of pledged collateral signed by one of its
officers.
4-5.
Surrender of Files Relating to Mortgage Loan Collateral.
Upon receiving notice of default and seizure of collateral
from the Commissioner, pursuant to C.R.S.
11-47-113, the depository, in the
case of insured, guaranteed or conventional mortgage loans pledged as
collateral, shall immediately surrender to the Commissioner all loan document
files relating to any eligible collateral pledged pursuant to C.R.S.
11-47-108.
4-6.
Release of Eligible
Collateral.
Upon written notice to a particular depository and custodian,
the Commissioner may require that all releases of collateral receive the
Commissioner's prior written approval. From the date of receipt of such notice
from the Commissioner, the custodian shall not effect any release of collateral
to the depository or any other person or entity in the absence of the
Commissioner's written approval.
4-7.
Reports to the
Commissioner.
The Commissioner may require reports from any depository
covering the information specified in C.R.S.
11-47-112(1) in
such form and at such frequency as he deems necessary. Such reports may include
financial statements of the depository. In order to accomplish the purpose of
C.R.S. 11-47-112, the Commissioner or his
designee may visit any office of a depository and shall have free access to the
records of the depository relating to the Savings and Loan Association Public
Deposit Protection Act.
4-8.
Additional Collateral Requirements
and Restrictions on Amounts of Public Deposits Held.
(a) If the tangible capital of a depository
does not meet the following requirements at the end of any calendar quarter,
pursuant to C.R.S.
11-47-112(6) (a),
the depository shall pledge additional eligible collateral in the following
manner:
(1) If the depository's tangible
capital is less than 4% but greater than or equal to 3% of total assets, the
depository shall pledge eligible collateral having a market value at all times
no less than 125% of the aggregate of uninsured deposits held by it.
(2) If the depository's tangible capital is
less than 3% but greater than or equal to 2% of total assets, the depository
shall pledge eligible collateral having a market value at all times no less
than 200% of the aggregate of uninsured deposits held by it.
(3) If the depository's tangible capital is
less than 2% of total assets, the depository shall pledge eligible collateral
having a market value at all times no less than 300% of the aggregate of
uninsured deposits held by it.
(b) In addition to the requirements of
subsection (a), if a depository's tangible capital is less than 3% of total
assets, said depository shall not accept any additional uninsured public
deposits or renew any uninsured public deposits that mature.
(c) In addition to the requirements of
subsections (a) and (b), if a depository's tangible capital is less than 2% of
total assets, said depository shall eliminate its uninsured public deposit
liability except its uninsured public deposit liability evidenced by a contract
with a specific maturity.
(d)
Compliance with this regulation shall be the responsibility of each depository
regardless of the frequency or form of the reports required by the
Commissioner.
(e) "Tangible
capital" means the sum of perpetual preferred stock, common stock, paid-in
capital in excess of par value, retained earnings, and unrealized gains or
losses on available-for-sale securities.
4-9.
Recordkeeping.
Each depository shall maintain sufficient records to evidence
its compliance with C.R.S.
11-47-108(1) and
to support the required reports filed with the Commissioner.
4-10.
Inclusion of Accrued and Credited
Interest.
Public deposits, as defined in C.R.S.
11-47-103(11),
shall include all interest or dividends accrued and credited to the individual
account of the governmental unit or to any other liability account on the books
of the depository.
4-11.
Verification of Collateral.
(a)
In addition to other required reports and examination procedures, the
Commissioner may, as he deems necessary, make a direct verification with the
custodian of all collateral pledged and held by the custodian on behalf of the
depository. All collateral so held by the custodian shall, at all times, be
accessible for verification by the Commissioner without the prior approval or
notification of the depository.
(b)
After the effective date of this rule, the above subsection (a) shall be
included as a provision in all future deposit pledge agreements executed
between a depository and its custodian.
4-13.
Minimum Amount of Eligible
Collateral.
(a) In accordance with
C.R.S. 11-47-112(6) (a),
the aggregate market value of the total pledged eligible collateral of an
eligible public depository shall, at all times, be no less than 100% of the
depository's uninsured public deposit liability, notwithstanding additional
amounts required by Section 4-8 of these regulations, or $250,000, whichever is
greater.
(b) Compliance with this
regulation shall be the responsibility of each depository regardless of the
frequency or form of reports required by the Commissioner.
