No. 28281: R628-11. Maximum Amount of Uninsured Public Funds Allowed to be Held by Any Qualified Depository

DAR File No.: 28281
Filed: 10/12/2005, 12:06
Received by: NL

 

NOTICE OF REVIEW AND STATEMENT OF CONTINUATION

Concise explanation of the particular statutory provisions under which the rule is enacted and how these provisions authorize or require the rule:

Section 51-7-18.1 of the Money Management Act (Title 51, Chapter 7) requires that the Money Management Council determine the maximum amount of public deposits a qualified depository may hold over the federal insurance amount. This section requires that process be done in rule.

 

Summary of written comments received during and since the last five-year review of the rule from interested persons supporting or opposing the rule:

When the rule was changed the Council received letters from two financial institutions whose allotments were lowered by the new ratios and the use of tier 1 capital. They requested that the Council re-consider amending the rule and not use tier 1 capital or change the ratios as the basis for the allotment.

 

Reasoned justification for continuation of the rule, including reasons why the agency disagrees with comments in opposition to the rule, if any:

The Council considered the issues noted above in the summary of written comment. However, in light of the failure in 2004 of a financial institution who continued to have a very large maximum allotment based on the old language up to the day it closed, the Council felt that they had reason to tighten up the calculations to possibly better identify an institution that may be having problems. This allotment calculation will hopefully move maximum allotments of uninsured public funds down quicker if an institution begins to have problems and will let the Council know they need to look at any issues surrounding the institution in a more timely manner. Additionally, this rule needs to be in place to allow public entities to maintain deposits at financial institutions so that they may continue to do business.

 

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Money Management Council
Administration
Room E315 EAST OFFICE BLDG
STATE CAPITOL COMPLEX
PO BOX 142315
SALT LAKE CITY UT 84114-2315

 

Direct questions regarding this rule to:

Ann Pedroza at the above address, by phone at 801-538-1883, by FAX at 801-538-1465, or by Internet E-mail at [e-mail]

 

Authorized by:

Bruce B. Cohne, Chair