New opinion ong anything else, there had been after that courtroom circumstances or legal amendments one bear towards the points discussed on the advice.
Standard Municipal Rules §§10(3), 11(2): The conditions of Standard Municipal Laws §10(1)(h) you to definitely maximum so you can 3 months the phrase regarding a keen “eligible letter away from borrowing” given as the cover getting state dumps and opportunities do not affect an irrevocable page of borrowing from the bank awarded of the a qualifying government financial bank.
Specifically, you may well ask whether the terms of Standard Civil Law §10(1)(h) that basically maximum so you can 90 days the expression away from an enthusiastic “qualified page of borrowing” provided due to the fact safeguards to own state dumps and you may investments applies to a keen irrevocable letter out of credit granted of the an FHLB.
General Municipal Legislation §§10 and you can 11 regulate new deposit and you may temporary money off funds of the regional governments, together with areas. Not as much as Standard Civil Rules §§ten and you will 11, every deposits and expenditures more than the amount covered below conditions of one’s Federal Put Insurance Operate step 1 need to be secure in accordance with Standard Civil Rules §10(3) (General Civil Laws §§ 10, 11).
This will be in reaction to your query regarding your access to a letter from borrowing issued from the a national home loan financial (hereinafter “FHLB”) while the safety to have condition places
Standard Civil Legislation §10(3) provides several alternatives for protecting like a lot of quantity, like the allowed regarding an “eligible page regarding borrowing from the bank”, payable towards local government, while the shelter “into commission of a single hundred or so 40 per credit union one loan cent, of one’s aggregate number of societal places” about state, and you can agreed upon focus (General Municipal Law § 10[c][i]). “Eligible page out-of borrowing” is defined for this function generally speaking Civil Legislation §10(1)(h) so you’re able to suggest:
[A]n irrevocable letter of credit issued in favor of the local government for an expression never to go beyond 3 months from 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).
Civil Finance — Places and you may Investment (term off an irrevocable letter of borrowing provided just like the defense from 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 Municipal Legislation § 10(3)(c) try amended in the 2002, although not, to particularly site the acceptance by the local governments from a keen “irrevocable letter off borrowing from the bank” awarded because of the a keen FHLB to help you safer a lot of places (L 2002, ch 615, productive endment together with renumbered established paragraph (c) from subdivision step 3 regarding section ten, just like the this new subparagraph (c)(i).
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