Effective July 31, 2006, certain regulations concerning public deposits were amended.  The text of the amended regulations follows.  A complete compilation of Department of Banking regulations in Word format may also be found on this Web site.

Section 1.  Section 36a-332-1 of the Regulations of Connecticut State Agencies is amended to read as follows:
Sec. 36a-332-1.  Definitions
As used in sections 36a-332-2 to 36a-332-8, inclusive, and sections 36a-333-1 and 36a-333-2 of the Regulations of Connecticut State Agencies:
(1)  “Commissioner” means “commissioner” as defined in section 36a-2 of the Connecticut General Statutes;
(2)  “Eligible collateral” means “eligible collateral” as defined in section 36a-330 of the Connecticut General Statutes;
(3)  “Financial institution” means “financial institution” as defined in section 36a-330 of the Connecticut General Statutes;
(4)  “Net worth” means, in the case of a Connecticut credit union, “net worth” as defined in section 36a-441a of the Connecticut General Statutes and, in the case of a federal credit union, “net worth” as defined in 12 CFR 702.2;
(5)  “Public deposit” means “public deposit” as defined in section 36a-330 of the Connecticut General Statutes;
(6)  “Qualified public depository” or “depository” means “qualified public depository” or “depository” as defined in section 36a-330 of the Connecticut General Statutes; and
(7)  “Total assets” means “total assets” as defined in 12 CFR 702.2.

Sec. 2.  Section 36a-332-2 of the Regulations of Connecticut State Agencies is amended to read as follows:
Sec. 36a-332-2.  Requirements for qualification as qualified public depository
In order to qualify as a qualified public depository, a financial institution shall:
(1)  Have its principal office in Connecticut, except in the case of an out-of-state bank that maintains in this state a branch as defined in section 36a-410 of the Connecticut General Statutes.
(2)  In the case of a Connecticut credit union, comply with the net worth requirement of section 36a-441a of the Connecticut General Statutes.
(3)  In the case of a federal credit union, comply with the net worth requirement of 12 CFR 702.
(4)  Have assets which shall at all times exceed its liabilities.

Sec. 3.  Section 36a-332-4 of the Regulations of Connecticut State Agencies is amended to read as follows:
Sec. 36a-332-4.  Requirements for financial institutions to serve as trustee for segregated eligible collateral
No financial institution shall accept a transfer of eligible collateral from a qualified public depository pursuant to subsection (b) of section 36a-333 of the Connecticut General Statutes unless such financial institution (1) is authorized under law to exercise fiduciary powers in this state, (2) meets the requirements of section 36a-332-2 of the Regulations of Connecticut State Agencies, as applicable, and (3) is federally insured or receives the approval of the commissioner.  If a financial institution ceases to meet such requirements, it shall give immediate notice to the qualified public depository and the commissioner who shall thereupon instruct such institution with respect to the disposition of eligible collateral.

Sec. 4.  Section 36a-332-5 of the Regulations of Connecticut State Agencies is amended to read as follows:
Sec. 36a-332-5.  Requirements for the transfer of eligible collateral
(a)  Prior to the transfer of eligible collateral to a financial institution serving as trustee or the designation of collateral already in the custody of such financial institution as eligible collateral, the qualified public depository shall receive written confirmation in the form of a certified notice from such financial institution that it is in compliance with section 36a-332-4 of the Regulations of Connecticut State Agencies and forward a copy of the confirmation to the commissioner.
(b)  Each qualified public depository shall enter into a written trust agreement with the financial institution, federal reserve bank or federal home loan bank serving as trustee.  Such agreement shall identify that the collateral to be transferred or designated is eligible collateral subject to the requirements of part III of chapter 665a of the Connecticut General Statutes, governing public deposits, and sections 36a-332-1 to 36a-332-8, inclusive, and sections 36a-333-1 and 36a-333-2 of the Regulations of Connecticut State Agencies.
(c)  Each transfer or designation of eligible collateral shall be accompanied by a certified statement from the qualified public depository showing the par value or original face amount, current par value, description and interest rate, CUSIP number, maturity date, market value and security rating, where applicable, of the eligible collateral being transferred or designated and the name of the financial institution, federal reserve bank or federal home loan bank serving as trustee receiving or holding such collateral.  A copy of the certified statement shall be maintained on file with the qualified public depository.

Sec. 5.  Section 36a-332-7 of the Regulations of Connecticut State Agencies is amended to read as follows:
Sec. 36a-332-7.  Reports to commissioner
Each qualified public depository shall file with the commissioner the following:
(a)  Call reports for each of the quarters ending March thirty-first, June thirtieth, September thirtieth and December thirty-first.  Each report shall be submitted to the commissioner not later than thirty days after the date ending the quarter covered by the report.
(b)  Written reports, certified under oath, for each of the quarters ending March thirty-first, June thirtieth, September thirtieth and December thirty-first, indicating its total capital, risk-based capital ratio, public deposits, the interest or other pecuniary consideration such depository allows for or upon such deposit or payment and the amount, nature and value of the eligible collateral segregated and designated therefor in accordance with part III of chapter 665a of the Connecticut General Statutes and sections 36a-332-1 to 36a-332-8, inclusive, and sections 36a-333-1 and 36a-333-2 of the Regulations of Connecticut State Agencies.  Each report shall be filed not later than thirty days after the date ending the quarter covered by the report.  Each qualified public depository shall retain a copy of such reports for a period of seven years.

Sec. 6.  Subsection (b) of section 36a-332-8 of the Regulations of Connecticut State Agencies is amended to read as follows:
(b)  For purposes of sections 36a-332-1 to 36a-332-7, inclusive, of the Regulations of Connecticut State Agencies, in the case of a Connecticut credit union and a federal credit union, “total capital” means the total of all reserves plus undivided earnings.

Sec. 7.  Subsection (b) of section 36a-333-1 of the Regulations of Connecticut State Agencies is amended to read as follows:
(b)  In the case of a Connecticut credit union and a federal credit union, “risk-based capital ratio” means net worth divided by total assets.

Statement of Purpose:  To update the procedures for the protection of public deposits and the requirements for qualified public depositories.