Section 135.182 | Ohio pooled collateral program.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) As used in this section:

(1) "Public depository" means that term as defined in section 135.01 of the Revised Code, but also means an institution that receives or holds any public deposits as defined in section 135.31 of the Revised Code.

(2) "Public depositor" means that term as defined in section 135.01 of the Revised Code, but also includes a county and any municipal corporation that has adopted a charter under Article XVIII, Ohio Constitution.

(3) "Public deposits," "public moneys," and "treasurer" mean those terms as defined in section 135.01 of the Revised Code, but also have the same meanings as are set forth in section 135.31 of the Revised Code, but for purposes of this section does not include the moneys of metropolitan housing authorities.

(B)(1) Not later than July 1, 2017, the treasurer of state shall create the Ohio pooled collateral program. Under this program, each institution designated as a public depository that selects the pledging method prescribed in division (A)(2) of section 135.18 or division (A)(2) of section 135.37 of the Revised Code shall pledge to the treasurer of state a single pool of eligible securities for the benefit of all public depositors at the public depository to secure the repayment of all uninsured public deposits at the public depository, provided that at all times the total market value of the securities so pledged is at least equal to either of the following:

(a) One hundred two per cent of the total amount of all uninsured public deposits;

(b) An amount determined by rules adopted by the treasurer of state that set forth the criteria for determining the aggregate market value of the pool of eligible securities pledged by a public depository pursuant to division (B) of this section. Such criteria shall include, but are not limited to, prudent capital and liquidity management by the public depository and the safety and soundness of the public depository as determined by a third-party rating organization.

(2) The treasurer of state shall monitor the eligibility, market value, and face value of the pooled securities pledged by the public depository. Each public depository shall carry in its accounting records at all times a general ledger or other appropriate account of the total amount of all public deposits to be secured by the pool, as determined at the opening of business each day, and the total market value of securities pledged to secure such deposits, and report such information to the treasurer of state in a manner and frequency as determined by the treasurer of state pursuant to rules adopted by the treasurer of state. A public depositor shall be responsible for periodically confirming the accuracy of its account balances with the treasurer of state; otherwise, the treasurer of state shall be the sole public depositor responsible for monitoring and ensuring the sufficiency of securities pledged under this section.

(3) If, on any day, the total market value of the securities pledged by the public depository is less than that specified in division (B)(1)(a) or (b) of this section, whichever is applicable, the public depository shall have two business days to pledge additional eligible securities having a market value sufficient, when combined with the market value of eligible securities already pledged, to satisfy the requirement of division (B)(1)(a) or (b) of this section, as applicable, to secure the repayment of all uninsured public deposits at the public depository.

(C) The public depository shall designate a qualified trustee approved by the treasurer of state and place with such trustee for safekeeping the eligible securities pledged pursuant to division (B) of this section. The trustee shall hold the eligible securities in an account indicating the treasurer of state's security interest in the eligible securities. The treasurer of state shall give written notice of the trustee to all public depositors for which such securities are pledged. The trustee shall report to the treasurer of state information relating to the securities pledged to secure such public deposits in a manner and frequency as determined by the treasurer of state.

(D) In order for a public depository to receive public moneys under this section, the public depository and the treasurer of state shall first execute an agreement that sets forth the entire arrangement among the parties and that meets the requirements described in 12 U.S.C. 1823(e). In addition, the agreement shall authorize the treasurer of state to obtain control of the collateral pursuant to division (D) of section 1308.24 of the Revised Code.

(E) The securities or other obligations described in division (D) of section 135.18 of the Revised Code shall be eligible as collateral for the purposes of division (B) of this section, provided no such securities or obligations pledged as collateral are at any time in default as to either principal or interest.

(F) Any federal reserve bank or branch thereof located in this state or federal home loan bank, without compliance with Chapter 1111. of the Revised Code and without becoming subject to any other law of this state relative to the exercise by corporations of trust powers generally, is qualified to act as trustee for the safekeeping of securities, under this section. Any institution mentioned in section 135.03 or 135.32 of the Revised Code that holds a certificate of qualification issued by the superintendent of financial institutions or any institution complying with sections 1111.04, 1111.05, and 1111.06 of the Revised Code is qualified to act as trustee for the safekeeping of securities under this section, other than those belonging to itself or to an affiliate as defined in section 1101.01 of the Revised Code.

(G) The public depository may substitute, exchange, or release eligible securities deposited with the qualified trustee pursuant to this section, provided that such substitution, exchange, or release is effectuated pursuant to written authorization from the treasurer of state, and such action does not reduce the total market value of the securities to an amount that is less than the amount established pursuant to division (B) of this section.

(H) Notwithstanding the fact that a public depository is required to pledge eligible securities in certain amounts to secure public deposits, a qualified trustee has no duty or obligation to determine the eligibility, market value, or face value of any securities deposited with the trustee by a public depository. This applies in all situations including, but not limited to, a substitution or exchange of securities, but excluding those situations effectuated by division (I) of this section in which the trustee is required to determine face and market value.

(I) The qualified trustee shall enter into a custodial agreement with the treasurer of state and public depository in which the trustee agrees to comply with entitlement orders originated by the treasurer of state without further consent by the public depository or, in the case of collateral held by the public depository in an account at a federal reserve bank, the treasurer of state shall have the treasurer's security interest marked on the books of the federal reserve bank where the account for the collateral is maintained. If the public depository fails to pay over any part of the public deposits made therein as provided by law and secured pursuant to division (B) of this section, the treasurer of state shall give written notice of this failure to the qualified trustee holding the pool of securities pledged against the public deposits, and at the same time shall send a copy of this notice to the public depository. Upon receipt of this notice, the trustee shall transfer to the treasurer of state for sale, the pooled securities that are necessary to produce an amount equal to the public deposits made by the public depositor and not paid over, less the portion of the deposits covered by any federal deposit insurance, plus any accrued interest due on the deposits. The treasurer of state shall sell any of the bonds or other securities so transferred. When a sale of bonds or other securities has been so made and upon payment to the public depositor of the purchase money, the treasurer of state shall transfer such bonds or securities whereupon the absolute ownership of such bonds or securities shall pass to the purchasers. Any surplus after deducting the amount due to the public depositor and expenses of sale shall be paid to the public depository.

(J) Any charges or compensation of a qualified trustee for acting as such under this section shall be paid by the public depository and in no event shall be chargeable to the public depositor or to any officer of the public depositor. The charges or compensation shall not be a lien or charge upon the securities deposited for safekeeping prior or superior to the rights to and interests in the securities of the public depositor. The treasurer and the treasurer's bonders or surety shall be relieved from any liability to the public depositor or to the public depository for the loss or destruction of any securities deposited with a qualified trustee pursuant to this section.

(K) A public depositor, treasurer, or the public depositor's or treasurer's bonders or surety are not liable for the loss of funds if a public depository fails to comply with the terms set forth in the agreement provided for in division (D) of this section for the appropriate level of collateral, as required under division (B)(1)(a) or (b) of this section, to secure the public deposits made under that agreement.

(L)(1) The following information is confidential and not a public record under section 149.43 of the Revised Code:

(a) All reports or other information obtained or created about a public depository for purposes of division (B)(1)(b) of this section;

(b) The identity of a public depositor's public depository;

(c) The identity of a public depository's public depositors.

(2) Nothing in this section prevents the treasurer of state from releasing or exchanging such confidential information as required by law or for the operation of the pooled collateral program.

(M) The treasurer of state may impose reasonable fees, including late fees, upon public depositories participating in the pooled collateral program to defray the actual and necessary expenses incurred by the treasurer in connection with the program. All such fees collected by the treasurer shall be deposited into the state treasury to the credit of the administrative fund created in section 113.20 of the Revised Code.

(N) The treasurer of state may adopt rules necessary for the implementation of this section and sections 135.18 and 135.181 of the Revised Code. Such rules shall be adopted in accordance with Chapter 119. of the Revised Code.

Last updated September 8, 2023 at 10:51 AM

Available Versions of this Section

• September 29, 2015 – House Bill 64 - 131st General Assembly
• December 22, 2015 – House Bill 340 - 131st General Assembly
• September 29, 2017 – Amended by House Bill 49 - 132nd General Assembly
• March 2, 2022 – Amended by Senate Bill 115 - 134th General Assembly
• October 3, 2023 – Amended by House Bill 33 - 135th General Assembly