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COMMITTEE AMENDMENT ADOPTED
April 6, 2004
S. 668
S. Printed 4/06/04--S.
Read the first time April 29, 2003.
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 6-5-15, SO AS TO AUTHORIZE A BANK OR SAVINGS AND LOAN ASSOCIATION, UPON DEPOSIT OF FUNDS BY A MUNICIPALITY, COUNTY, SCHOOL DISTRICT, OTHER LOCAL GOVERNMENT UNIT OR POLITICAL SUBDIVISION, OR A COUNTY TREASURER, TO SECURE THE DEPOSITS BY DEPOSIT INSURANCE, SURETY BONDS, COLLATERAL SECURITIES, OR LETTERS OF CREDIT TO PROTECT THE LOCAL ENTITY AGAINST LOSS, AND TO PROVIDE THE REQUIREMENTS FOR SECURING DEPOSITS THAT EXCEED THE AMOUNT OF INSURANCE COVERAGE PROVIDED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION.
Amend Title To Conform
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Chapter 5, Title 6 of the 1976 Code is amended by adding:
"Section 6-5-15. (A) As used in this section, 'local entity' means the governing body of a municipality, county, school district, other local government unit or political subdivision, or a county treasurer.
(B) A bank or savings and loan association, upon the deposit of funds by a local entity, must secure these deposits by deposit insurance, surety bonds, collateral securities, or letters of credit to protect the local entity against loss in the event of insolvency or liquidation of the institution or for any other cause.
(C) To the extent that these deposits exceed the amount of insurance coverage provided by the Federal Deposit Insurance Corporation, the bank or savings and loan association at the time of deposit must:
(1) furnish an indemnity bond in a responsible surety company authorized to do business in this State; or
(2) pledge as collateral:
(a) obligations of the United States;
(b) obligations fully guaranteed both as to principal and interest by the United States;
(c) general obligations of this State or any political subdivision of this State; or
(d) obligations of the Federal National Mortgage Association, the Federal Home Loan Bank, Federal Farm Credit Bank, or the Federal Home Loan Mortgage Corporation; or
(3) provide an irrevocable letter of credit issued by the Federal National Mortgage Association, the Federal Home Loan Bank, Federal Farm Credit Bank, or the Federal Home Loan Mortgage Corporation, in which the local entity is named as beneficiary and the letter of credit otherwise meets the criteria established and prescribed by the local entity.
(D) The local entity must exercise prudence in accepting collateral securities or other forms of deposit security."
SECTION 2. This act takes effect upon approval by the Governor.
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