The fresh new viewpoint ong other things, there had been after that judge circumstances otherwise statutory amendments you to sustain to your activities discussed throughout the thoughts.

General Civil Law §§10(3), 11(2): New terms off General Municipal Rules §10(1)(h) one limitation to 3 months the term of an enthusiastic “qualified letter out-of borrowing” approved as safety getting local government places and assets don’t apply at an enthusiastic irrevocable letter of credit approved by a being qualified government home loan financial.

Particularly, you may well ask if the provisions of Standard Civil Law §10(1)(h) one to essentially restriction to help you 3 months the phrase out of an enthusiastic “qualified letter out of borrowing from the bank” provided due to the fact security to own state government dumps and investments applies to an irrevocable page out of borrowing granted by a keen FHLB.

General Municipal Legislation §§ten and you will 11 control brand new deposit and short term resource of monies of the regional governing bodies, including counties. Around Standard Municipal Laws §§ten and you may 11, most of the deposits and investment over the quantity insured significantly less than provisions of one’s Government Put Insurance Operate 1 need to be secure prior to General Civil Rules §10(3) (Standard Municipal Legislation §§ ten, 11).

This really is as a result on inquiry regarding your the means to access a letter of credit granted because of the a federal financial lender (hereinafter “FHLB”) since the safeguards to own state places

Standard Municipal Rules §10(3) brings multiple choices for protecting particularly too much numbers, like the anticipate out-of an enthusiastic “eligible letter away from borrowing”, payable towards state, due to the fact safeguards “towards percentage of just one hundred 40 percent, of your own aggregate amount of public dumps” regarding state government, and you may arranged attract (Standard Municipal Law § 10[c][i]). “Eligible letter out-of borrowing from the bank” is set for this purpose as a whole Municipal Rules §10(1)(h) to indicate:

[A]n irrevocable letter of credit issued in favor of the local government for a phrase not to meet or exceed 90 days of 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).

Municipal Funds — Deposits and you can Financial investments (title out of a keen irrevocable letter away from borrowing from the bank approved due to the fact safety 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 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.

Standard Municipal Rules § 10(3)(c) try amended inside 2002, but not, to help you specifically resource the new desired by the local governments out-of an “irrevocable page out-of borrowing” given of the an FHLB so you can safer way too much deposits (L Columbus installment loans no bank account 2002, ch 615, effective endment including renumbered existing part (c) regarding subdivision step three off section 10, while the the brand new subparagraph (c)(i).