Florida Senate - 2017 COMMITTEE AMENDMENT
Bill No. SB 1170
Ì379464GÎ379464
LEGISLATIVE ACTION
Senate . House
Comm: RCS .
03/14/2017 .
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The Committee on Banking and Insurance (Hutson) recommended the
following:
1 Senate Amendment (with title amendment)
2
3 Delete lines 99 - 213
4 and insert:
5 Section 2. Section 280.042, Florida Statutes, is created to
6 read:
7 280.042 Conditions for designating credit unions as
8 qualified public depositories; withdrawal by the Chief Financial
9 Officer from a collateral agreement and return of deposits;
10 limit on public deposits.—
11 (1) The Chief Financial Officer may not designate a credit
12 union as a qualified public depository as defined under s.
13 280.02, unless, at the time the credit union submits its
14 agreement of contingent liability and its collateral agreement:
15 (a) The credit union submits a signed statement from a
16 public official indicating that if the credit union is
17 designated as a qualified public depository, the public official
18 intends to deposit more than $250,000 of public funds with the
19 credit union; and
20 (b) At least four other credit unions have each submitted
21 an agreement of contingent liability, a collateral agreement,
22 and a signed statement from a public official indicating that if
23 the credit union is designated as a qualified public depository,
24 the public official intends to deposit more than $250,000 of
25 public funds with the credit union.
26 (2) The Chief Financial Officer must withdraw from a
27 collateral agreement previously entered into with a credit union
28 if fewer than five credit unions are designated as qualified
29 public depositories during any period of 90 calendar days or
30 longer.
31 (3) A credit union that is a party to a collateral
32 agreement from which the Chief Financial Officer withdraws in
33 accordance with subsection (2) may no longer be designated as a
34 qualified public depository. Within 10 business days after the
35 Chief Financial Officer notifies the credit union that the Chief
36 Financial Officer has withdrawn from the collateral agreement,
37 the credit union must return all public deposits that the credit
38 union holds to the public official who deposited the funds. The
39 notice provided for in this subsection may be sent to a credit
40 union by regular mail or by e-mail.
41 (4) The Chief Financial Officer may limit the amount of
42 public deposits which any credit union may hold in order to
43 ensure that no single credit union holds an amount of public
44 deposits which might adversely affect the integrity of the
45 public deposits program.
46 Section 3. Section 280.07, Florida Statutes, is amended to
47 read:
48 280.07 Mutual responsibility and contingent liability.—
49 (1) Any bank, savings bank, or savings association that is
50 designated as a qualified public depository and that is not
51 insolvent shall guarantee public depositors against loss caused
52 by the default or insolvency of other banks, savings banks, or
53 savings associations designated as qualified public
54 depositories.
55 (2) Any credit union that is designated as a qualified
56 public depository and that is not insolvent shall guarantee
57 public depositors against loss caused by the default or
58 insolvency of other credit unions designated as qualified public
59 depositories.
60
61 Each qualified public depository shall execute a form prescribed
62 by the Chief Financial Officer for such guarantee which must
63 shall be approved by the board of directors and shall become an
64 official record of the institution.
65 Section 4. Subsections (1) and (3) of section 280.08,
66 Florida Statutes, are amended to read:
67 280.08 Procedure for payment of losses.—When the Chief
68 Financial Officer determines that a default or insolvency has
69 occurred, he or she shall provide notice as required in s.
70 280.085 and implement the following procedures:
71 (1) The Division of Treasury, in cooperation with the
72 Office of Financial Regulation of the Financial Services
73 Commission or the receiver of the qualified public depository in
74 default, shall ascertain the amount of funds of each public
75 depositor on deposit at such depository and the amount of
76 deposit or share insurance applicable to such deposits.
77 (3)(a) The loss to public depositors shall be satisfied,
78 insofar as possible, first through any applicable deposit or
79 share insurance and then through demanding payment under letters
80 of credit or the sale of collateral pledged or deposited by the
81 defaulting depository. The Chief Financial Officer may assess
82 qualified public depositories as provided in paragraph (b),
83 subject to the segregation of contingent liability in s. 280.07,
84 for the total loss if the demand for payment or sale of
85 collateral cannot be accomplished within 7 business days.
86 (b) The Chief Financial Officer shall provide coverage of
87 any remaining loss by assessment against the other qualified
88 public depositories. The Chief Financial Officer shall determine
89 such assessment for each qualified public depository by
90 multiplying the total amount of any remaining loss to all public
91 depositors by a percentage which represents the average monthly
92 balance of public deposits held by each qualified public
93 depository during the previous 12 months divided by the total
94 average monthly balances of public deposits held by all
95 qualified public depositories, excluding the defaulting
96 depository, during the same period. The assessment calculation
97 must shall be computed to six decimal places.
98 Section 5. Section 280.09, Florida Statutes, is amended to
99 read:
100 280.09 Public Deposits Trust Fund.—
101 (1) In order to facilitate the administration of this
102 chapter, there is created the Public Deposits Trust Fund,
103 hereafter in this section designated as “the fund.” The proceeds
104 from the sale of securities or draw on letters of credit held as
105 collateral or from any assessment pursuant to s. 280.08 must
106 shall be deposited into the fund. The Chief Financial Officer
107 must segregate and separately account for any collateral
108 proceeds, assessments, or administrative penalties attributable
109 to a credit union from any collateral proceeds, assessments, or
110 administrative penalties attributable to any bank, savings bank,
111 or savings association. Any administrative penalty collected
112 pursuant to this chapter shall be deposited into the Treasury
113 Administrative and Investment Trust Fund.
114 (2) The Chief Financial Officer is authorized to pay any
115 losses to public depositors from the fund, subject to the
116 limitations provided in subsection (1), and there are hereby
117 appropriated from the fund such sums as may be necessary from
118 time to time to pay the losses. The term “losses,” for purposes
119 of this chapter, shall also include losses of interest or other
120 accumulations to the public depositor as a result of penalties
121 for early withdrawal required by Depository Institution
122 Deregulatory Commission Regulations or applicable successor
123 federal laws or regulations because of suspension or
124 disqualification of a qualified public depository by the Chief
125 Financial Officer pursuant to s. 280.05 or because of withdrawal
126 from the public deposits program pursuant to s. 280.11. In that
127 event, the Chief Financial Officer is authorized to assess
128 against the suspended, disqualified, or withdrawing public
129 depository, in addition to any amount authorized by any other
130 provision of this chapter, an administrative penalty equal to
131 the amount of the early withdrawal penalty and to pay that
132 amount over to the public depositor as reimbursement for such
133 loss. Any money in the fund estimated not to be needed for
134 immediate cash requirements shall be invested pursuant to s.
135 17.61.
136 Section 6. Paragraph (a) of subsection (3) of section
137 280.03, Florida Statutes, is amended to read:
138 280.03 Public deposits to be secured; prohibitions;
139 exemptions.—
140 (3) The following are exempt from the requirements of, and
141 protection under, this chapter:
142 (a) Public deposits deposited in a bank, credit union, or
143 savings association by a trust department or trust company which
144 are fully secured under trust business laws.
145 Section 7. Subsection (11) of section 280.05, Florida
146 Statutes, is amended to read:
147 280.05 Powers and duties of the Chief Financial Officer.—In
148 fulfilling the requirements of this act, the Chief Financial
149 Officer has the power to take the following actions he or she
150 deems necessary to protect the integrity of the public deposits
151 program:
152 (11) Sell securities for the purpose of paying losses to
153 public depositors not covered by deposit or share insurance.
154 Section 8. Subsection (1) of section 280.052, Florida
155 Statutes, is amended to read:
156 280.052 Order of suspension or disqualification;
157 procedure.—
158 (1) The suspension or disqualification of a bank, credit
159 union, or savings association as a qualified public depository
160 must be by order of the Chief Financial Officer and must be
161 mailed to the qualified public depository by registered or
162 certified mail.
163 Section 9. Paragraph (c) of subsection (1) and paragraph
164 (c) of subsection (2) of section 280.053, Florida Statutes, are
165 amended to read:
166 280.053 Period of suspension or disqualification;
167 obligations during period; reinstatement.—
168 (1)
169 (c) Upon expiration of the suspension period, the bank,
170 credit union, or savings association may, by order of the Chief
171 Financial Officer, be reinstated as a qualified public
172 depository, unless the cause of the suspension has not been
173 corrected or the bank, credit union, or savings association is
174 otherwise not in compliance with this chapter or any rule
175 adopted pursuant to this chapter.
176 (2)
177 (c) Upon expiration of the disqualification period, the
178 bank, credit union, or savings association may reapply for
179 qualification as a qualified public depository. If a
180 disqualified bank, credit union, or savings association is
181 purchased or otherwise acquired by new owners, it may reapply to
182 the Chief Financial Officer to be a qualified public depository
183 prior to the expiration date of the disqualification period.
184 Redesignation as a qualified public depository may occur only
185 after the Chief Financial Officer has determined that all
186 requirements for holding public deposits under the law have been
187 met.
188 Section 10. Section 280.055, Florida Statutes, is amended
189 to read:
190 280.055 Cease and desist order; corrective order;
191 administrative penalty.—
192 (1) The Chief Financial Officer may issue a cease and
193 desist order and a corrective order upon determining that:
194 (a) A qualified public depository has requested and
195 obtained a release of pledged collateral without approval of the
196 Chief Financial Officer;
197 (b) A bank, credit union, savings association, or other
198 financial institution is holding public deposits without a
199 certificate of qualification issued by the Chief Financial
200 Officer;
201 (c) A qualified public depository pledges, deposits, or
202 arranges for the issuance of unacceptable collateral;
203 (d) A custodian has released pledged collateral without
204 approval of the Chief Financial Officer;
205 (e) A qualified public depository or a custodian has not
206 furnished to the Chief Financial Officer, when the Chief
207 Financial Officer requested, a power of attorney or bond power
208 or bond assignment form required by the bond agent or bond
209 trustee for each issue of registered certificated securities
210 pledged and registered in the name, or nominee name, of the
211 qualified public depository or custodian; or
212 (f) A qualified public depository; a bank, credit union,
213 savings association, or other financial institution; or a
214 custodian has committed any other violation of this chapter or
215 any rule adopted pursuant to this chapter that the Chief
216 Financial Officer determines may be remedied by a cease and
217 desist order or corrective order.
218 (2) Any qualified public depository or other bank, credit
219 union, savings association, or financial institution or
220 custodian that violates a cease and desist order or corrective
221 order of the Chief Financial Officer is subject to an
222 administrative penalty not exceeding $1,000 for each violation
223 of the order. Each day the violation of the order continues
224 constitutes a separate violation.
225
226 ================= T I T L E A M E N D M E N T ================
227 And the title is amended as follows:
228 Delete lines 6 - 12
229 and insert:
230 Security for Public Deposits Act; creating s. 280.042,
231 F.S.; specifying conditions that must be met before
232 the Chief Financial Officer may designate a credit
233 union as a qualified public depository; requiring the
234 Chief Financial Officer to withdraw from a collateral
235 agreement with a credit union under certain
236 circumstances; providing construction and notice and
237 public deposit return requirements after such
238 withdrawal; authorizing the Chief Financial Officer to
239 limit, for a certain purpose, the amount of public
240 deposits a credit union may hold; amending s. 280.07,
241 F.S.; specifying the mutual responsibility and
242 contingent liability of certain credit unions
243 designated as qualified public depositories;
244 conforming a provision to changes made by the act;
245 amending s. 280.08, F.S.; conforming provisions to
246 changes made by the act; providing that certain
247 assessments by the Chief Financial Officer upon
248 qualified public depositories are subject to certain
249 segregation of contingent liability provisions;
250 amending s. 280.09, F.S.; requiring the Chief
251 Financial Officer, in administering the Public
252 Deposits Trust Fund, to segregate and separately
253 account for certain proceeds, assessments, or
254 penalties attributable to a credit union from those
255 attributable to a bank, savings bank, or savings
256 association; providing that payment of losses is
257 subject to such limitations; amending ss. 280.03,
258 280.05, 280.052, 280.053, 280.055, 280.085, 280.10,
259 280.13, and 280.17,