Sec. 36a-333. (Formerly Sec. 36-386). Collateral requirements. (a) To secure
public deposits, each qualified public depository shall at all times maintain, segregated
from its other assets as provided in subsection (b) of this section, eligible collateral in
an amount at least equal to the following percentage of public deposits held by the
depository: (1) For any qualified public depository having a risk-based capital ratio of
ten per cent or greater, a sum equal to ten per cent of all public deposits held by the
depository; (2) for any qualified public depository having a risk-based capital ratio of
less than ten per cent but greater than or equal to eight per cent, a sum equal to twenty-five per cent of all public deposits held by the depository; (3) for any qualified public
depository having a risk-based capital ratio of less than eight per cent but greater than
or equal to three per cent, a sum equal to one hundred per cent of all public deposits
held by the depository; (4) for any qualified public depository having a risk-based capital
ratio of less than three per cent, and, notwithstanding the provisions of subdivisions (1)
to (3), inclusive, of this subsection, for any qualified public depository which has been
conducting business in this state for a period of less than two years except for a qualified
public depository that is a successor institution to a qualified public depository which
conducted business in this state for two years or more, a sum equal to one hundred and
twenty per cent of all public deposits held by the depository; provided, the qualified
public depository and the public depositor may agree on an amount of eligible collateral
to be maintained by the depository that is greater than the minimum amounts required
under subdivisions (1) to (4), inclusive, of this subsection; (5) notwithstanding the risk-based capital ratio provisions of subdivisions (1) to (3), inclusive, of this subsection,
for any qualified public depository that is an uninsured bank, a sum equal to one hundred
twenty per cent of all public deposits held by the depository; and (6) notwithstanding
the risk-based capital ratio provisions of subdivisions (1) to (3), inclusive, of this subsection, for any qualified public depository that is subject to an order to cease and desist,
or has entered into a stipulation and agreement, or a letter of understanding and
agreement with a bank or credit union supervisor, a sum equal to one hundred twenty
per cent of all public deposits held by the depository, provided, the qualified public
depository and the public depositor may agree on an amount of eligible collateral to be
maintained by the depository that is greater than the minimum amounts required under
subdivisions (1) to (6), inclusive, of this subsection. For purposes of this subsection,
the amount of all public deposits held by the depository shall be determined based on
either the public deposits reported on the most recent quarterly call report or the average
of the public deposits reported on the four most recent quarterly call reports, whichever
amount is greater. For purposes of this subsection, the depository's risk-based capital
ratio shall be determined, in accordance with applicable federal regulations and regulations adopted by the commissioner in accordance with chapter 54, based on the most
recent quarterly call report, provided (A) if, during any calendar quarter after the issuance
of such report, the depository experiences a decline in its risk-based capital ratio to a
level that would require the depository to maintain a higher amount of eligible collateral
under subdivisions (1) to (4), inclusive, of this subsection, the depository shall increase
the amount of eligible collateral maintained by it to the minimum required under subdivisions (1) to (4), inclusive, of this subsection based on such lower risk-based capital ratio
and shall notify the commissioner of its actions; and (B) if, during any calendar quarter
after the issuance of such report, the commissioner reasonably determines that the depository's risk-based capital ratio is likely to decline to a level that would require the depository to maintain a higher amount of eligible collateral under subdivisions (1) to (4),
inclusive, of this subsection, the commissioner may require that the depository increase
the amount of eligible collateral maintained by it to the minimum required under subdivisions (1) to (4), inclusive, of this subsection based on the commissioner's determination
of such lower risk-based capital ratio.
(b) Each qualified public depository having a risk-based capital ratio of eight per
cent or greater shall transfer eligible collateral maintained under subsection (a) of this
section to its own trust department, provided such trust department is located in this
state unless the commissioner approves otherwise, to the trust department of another
financial institution, provided such eligible collateral shall be maintained in such other
financial institution's trust department located in this state unless the commissioner
approves otherwise, or to a federal reserve bank or federal home loan bank. Each qualified public depository having a risk-based capital ratio of less than eight per cent shall
transfer eligible collateral maintained under subsection (a) of this section to the trust
department of a financial institution that is not owned or controlled by the depository
or by a holding company owning or controlling the depository, provided such eligible
collateral shall be maintained in such other financial institution's trust department located in this state unless the commissioner approves otherwise, or to a federal reserve
bank or federal home loan bank. Such transfers of eligible collateral shall be made in a
manner prescribed by the commissioner. Eligible collateral shall be valued at market
value or as determined by the commissioner if market value is not readily determinable,
and the value of such eligible collateral shall be determined and adjusted on a quarterly
basis. Without the requirement of any further action, the commissioner shall have, for
the benefit of public depositors, a perfected security interest in all such eligible collateral
held in such segregated trust accounts, granted pursuant to and in accordance with the
terms of the agreement between the public depositor and the qualified public depository.
Such security interest shall have priority over all other perfected security interests
and liens.
(c) The depository shall have the right to make substitutions of eligible collateral
at any time without notice. The depository shall provide written notice to its public
depositors of any reduction in the amount of eligible collateral maintained under subsection (a) of this section.
(d) The income from the assets which constitute segregated eligible collateral shall
belong to the depository without restriction.
(e) Eligible collateral pledged to secure public deposits under subsection (a) of this
section shall have a minimum market value as expressed in the following collateral
ratios:
Form of Eligible
Collateral Pledged
| Collateral Ratio
(Market value
divided by public
deposit plus
accrued interest) |
| 1. United States Treasury bills, notes and bonds | |
| A. Maturing in less than one year | 102% |
| B. Maturing in one to five years | 105% |
| C. Maturing in more than five years | 110% |
| D. Zero-coupon treasury securities with maturities exceeding ten years | 120% |
| 2. Actively traded United States government agency securities | |
| A. Maturing in less than one year | 103% |
| B. Maturing in one to five years | 107% |
| C. Maturing in more than five years | 115% |
| 3. United States government agency variable rate securities | 103% |
4. Government National Mortgage Association mortgage pass-through or
participation certificates or similar securities | |
| A. Current issues | 115% |
| B. Older issues | 120% |
| C. Issues for which prices are not quoted | 125% |
| 5. Other United States government securities | 125% |
6. Other mortgage pass-through or participation certificates
or similar securities | 125% |
| 7. One-to-four family residential mortgages | 125% |
| 8. State and municipal bonds | |
| A. General obligation bonds | |
| i. Maturing in less than one year | 102% |
| ii. Maturing in one to five years | 107% |
| iii. Maturing in more than five years | 110% |
| B. Revenue bonds | |
| i. Maturing in less than one year | 105-110% |
| ii. Maturing in one to five years | 110-120% |
| iii. Maturing in more than five years | 120-130% |
(1967, P.A. 517, S. 5; P.A. 77-614, S. 156, 587, 610; P.A. 78-303, S. 85, 136; P.A. 87-9, S. 2, 3; P.A. 91-245, S. 4;
P.A. 94-122, S. 158, 340; P.A. 95-155, S. 23, 29; P.A. 03-196, S. 9; P.A. 04-136, S. 34.)
History: P.A. 77-614 and P.A. 78-303 allowed substitution of banking commissioner references for references to Public
Deposit Protection Commission, effective January 1, 1979; (Revisor's note: Pursuant to P.A. 87-9 "banking commissioner"
was changed editorially by the Revisors to "commissioner of banking"); P.A. 91-245 deleted existing Subsecs. (a) and
(b), added new Subsec. (a) re eligible collateral requirements, added new Subsec. (b) re segregation of eligible collateral,
added notice requirements to Subsec. (c), made a technical change to Subsec. (d) and added Subsec. (e) re minimum market
value for eligible collateral; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-386 transferred to
Sec. 36a-333 in 1995; P.A. 95-155 added provisos in Subsec. (b) re location of the trust department and location at which
eligible collateral is maintained, effective June 27, 1995; P.A. 03-196 amended Subsec. (a) by adding Subdiv. (5) re
collateral requirement for uninsured bank, and Subdiv. (6) re collateral requirement for depository that is subject to order
to cease and desist, or has entered into a stipulation and agreement, or a letter of understanding and agreement with a bank
or credit union supervisor, effective July 1, 2003; P.A. 04-136 amended Subsec. (a)(5) to delete reference to Sec. 36a-70(t)(1), effective May 12, 2004.
Sec. 36a-334. (Formerly Sec. 36-387). Procedure upon loss. When the commissioner determines that a loss has occurred, the commissioner shall as soon as possible
make payment to the proper public officers of all public deposits subject to such loss,
pursuant to the following procedure: (1) For the purposes of determining the sums to
be paid, the commissioner or receiver shall, within twenty days after issuance of a restraining order or taking possession of any qualified public depository, ascertain the
amount of public deposits held by the depository as disclosed by its records and the
amount thereof covered by deposit insurance and certify the amounts to each public
depositor having public funds on deposit in the depository; (2) within ten days after
receipt of such certification, each such public depositor shall furnish to the commissioner
verified statements of its deposits in the depository as disclosed by its records; (3) upon
receipt of such certificate and statements, the commissioner shall ascertain and fix the
amount of such public deposits, net after deduction of any deposit insurance, and assess
the same against the depository in which the loss occurred; (4) the assessment made by
the commissioner shall be payable on the second business day following demand, and
in case of the failure of the qualified public depository so to pay, the commissioner
shall immediately take possession of the eligible collateral segregated by the depository
pursuant to sections 36a-330 to 36a-338, inclusive, and liquidate the same for the purpose
of paying such assessment; (5) upon receipt of the assessment, the commissioner shall
reimburse the public depositors of the depository in which the loss occurred to the extent
of the depository's net deposit liability to them.
(1967, P.A. 517, S. 6; P.A. 77-614, S. 158, 610; P.A. 87-9, S. 2, 3; P.A. 91-245, S. 5; P.A. 92-12, S. 79; P.A. 94-122,
S. 159, 340.)
History: P.A. 77-614 replaced bank commissioner with banking commissioner and references to Public Deposit Protection Commission with references to said commissioner, effective January 1, 1979; (Revisor's note: Pursuant to P.A. 87-9 "banking commissioner" was changed editorially by the Revisors to "commissioner of banking"); P.A. 91-245 deleted
provisions re assessment of loss against all other qualified public depositories in proportion to their maximum liability
and made technical changes; P.A. 92-12 redesignated Subdivs; P.A. 94-122 made technical changes, effective January 1,
1995; Sec. 36-387 transferred to Sec. 36a-334 in 1995.
Sec. 36a-335. (Formerly Sec. 36-388). Subrogation of commissioner to depositor's rights. Upon payment to any public depositor, the commissioner shall be subrogated to all of such depositor's right, title and interest against the depository in which
the loss occurred and shall share in any distribution of its assets ratably with other
depositors. Any sums received from any distribution shall be paid to the public depositors to the extent of any unpaid net deposit liability. If the commissioner incurs expense
in enforcing any such claim, the amount thereof shall be paid as a liquidation expense
of the depository in which the loss occurred.
(1967, P.A. 517, S. 7; P.A. 77-614, S. 159, 610; P.A. 91-245, S. 6.)
History: P.A. 77-614 replaced references to Public Deposit Protection Commission with references to banking commissioner, effective January 1, 1979; P.A. 91-245 deleted provisions re payments to qualified public depositories against
which assessments were made; Sec. 36-388 transferred to Sec. 36a-335 in 1995.
Sec. 36a-336. (Formerly Sec. 36-389). Public deposits in qualified public depository or out-of-state bank. No public deposit shall be made except in a qualified
public depository or in an out-of-state bank if (1) the deposit is permitted by a statute
of this state and (2) such out-of-state bank provides eligible collateral for such deposit
in excess of the Federal Deposit Insurance Corporation insurance limit in an amount
satisfactory to the public depositor but in any event affording protection at least equal
to that provided under sections 36a-330 to 36a-338, inclusive.
(1967, P.A. 517, S. 8; P.A. 81-193, S. 14, 16; P.A. 92-12, S. 80; P.A. 94-7, S. 3; 94-122, S. 160, 340.)
History: P.A. 81-193 deleted "Except as provided in section 36-392,"; P.A. 92-12 redesignated Subdivs; P.A. 94-7
amended section to require an out-of-state depository to provide collateral in excess of the Federal Deposit Insurance
Corporation insurance limit; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-389 transferred to
Sec. 36a-336 in 1995.
Sec. 36a-337. (Formerly Sec. 36-390). Securing of public deposits. Private insurance in lieu of eligible collateral. (a) All qualified public depositories shall have
power to secure public deposits in accordance with sections 36a-330 to 36a-338, inclusive. Except as provided in said sections, no bond or other security shall be required of
or given by any qualified public depository for any public deposit.
(b) In lieu of eligible collateral required under section 36a-333, at least to the extent
provided by said section, not more than fifty per cent of the public deposits held by
any qualified public depository may be secured solely by a private insurance policy
purchased by the depository, the depositor, or any other third party. Any private insurance policy used to secure public deposits shall be issued by an insurance company
licensed to do business in Connecticut.
(1967, P.A. 517, S. 9; P.A. 91-177; 91-245, S. 7; P.A. 94-122, S. 161, 340.)
History: P.A. 91-177 made technical changes to the existing section, designated said section as Subsec. (a), and added
Subsec. (b) re private insurance in lieu of eligible collateral; P.A. 91-245 made technical changes; P.A. 94-122 made
technical changes, effective January 1, 1995; Sec. 36-390 transferred to Sec. 36a-337 in 1995.
Sec. 36a-338. (Formerly Sec. 36-391). Report of public depository. On each call
report date, each qualified public depository shall file with the commissioner a written
report, certified under oath, indicating its risk-based capital ratio and total capital, as
determined in accordance with applicable federal regulations and regulations adopted
by the commissioner in accordance with chapter 54, the total amount of public deposits
held by it and the amount and nature of the eligible collateral segregated and designated
to secure the public deposits in accordance with sections 36a-330 to 36a-338, inclusive.
Each depository shall furnish a copy of its most recent report to any public depositor
having public funds on deposit in the depository, upon request of the depositor. Any
public depository which refuses or neglects to furnish any report or give any information
as required by this section shall no longer be a qualified public depository and shall be
excluded from the right to receive public deposits.
(1967, P.A. 517, S. 10; P.A. 77-614, S. 160, 610; P.A. 87-9, S. 2, 3; P.A. 91-245, S. 8; P.A. 94-122, S. 162, 340.)
History: P.A. 77-614 replaced bank commissioner with banking commissioner and references to Public Deposit Protection Commission with references to said commissioner, effective January 1, 1979; (Revisor's note: Pursuant to P.A. 87-9 "banking commissioner" was changed editorially by the Revisors to "commissioner of banking"); P.A. 91-245 added
requirements for reporting risk-based capital ratio and total capital, deleted provisions re examination by the commissioner
or the Comptroller of the Currency, required depositories to furnish copies of report to public depositories and provided
for failure to do so, and made technical change; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-391 transferred to Sec. 36a-338 in 1995.