The new viewpoint ong whatever else, there were subsequent court instances or legal amendments you to incur to the situations chatted about about opinion.
Standard Municipal Law §§10(3), 11(2): The conditions away from Standard Civil Law §10(1)(h) one restriction to ninety days the phrase out of an enthusiastic “eligible letter of credit” awarded since shelter getting state government places and you can opportunities don’t connect with an enthusiastic irrevocable letter out of borrowing awarded from the a qualifying government mortgage financial.
Especially, you ask perhaps the specifications from Standard Municipal Laws §10(1)(h) that essentially restriction in order to 3 months the definition of off an enthusiastic “eligible letter regarding borrowing” given due to the fact protection to own state government places and you will opportunities applies to an enthusiastic irrevocable page of borrowing from the bank approved by an FHLB.
Standard Municipal Rules §§ten and you may eleven govern the fresh put and short term money away from funds of the regional governments, as well as counties. Less than General Civil Legislation §§10 and you will 11, all places and you may opportunities more than extent covered around arrangements of Government Put Insurance policies Act step one have to be secured in accordance with General Municipal Laws §10(3) (General Municipal Laws §§ ten, 11).
This is exactly in reaction with the query about your access to a page regarding borrowing from the bank awarded of the a national home loan bank (hereinafter “FHLB”) as safeguards to own state dumps
General Civil Legislation §10(3) will bring numerous choices for securing including way too much amounts, including the greeting off an “qualified letter of borrowing”, payable to the local government, as safeguards “on payment of a single hundred or so 40 %, of your aggregate level of personal dumps” in the state, and you will agreed upon desire (General Municipal Law § 10[c][i]). “Eligible page away from borrowing from the bank” is placed for this purpose as a whole Municipal Laws §10(1)(h) so you’re able to mean:
[A]n irrevocable letter of credit issued in favor of the local government for a phrase never to exceed 3 months by a lender (other than the bank with which the money is being deposited or invested) whose commercial paper and other unsecured short-term debt obligations (or, in the case of a bank which is the principal subsidiary of a holding company, whose holding company’s commercial paper and other unsecured short-term debt obligations) are rated in one of the three highest rating categories (based on the credit of such bank or holding company) by at least one nationally recognized statistical rating organization or by a bank (other than the bank with which the money is being deposited or invested) that is [in compliance] with applicable federal minimum risk-based capital requirements (emphasis added).
Municipal Financing — Dumps and you may Investment (term out of an irrevocable letter from borrowing awarded as cover because of the a qualifying government home loan financial)
For purposes of General Municipal Law §10, a “bank” is defined to mean a national banking association (see 12 USC §21 et seq.) or a corporation, other than a trust company, organized under or subject to the provisions of article 3 of the New York State Banking Law (General Municipal Law §10[d]; Banking Law §2). FHLBs, which are supervised by the Federal Housing Finance Board, are separate regional corporations, owned by those savings and loan associations, cooperative banks, homestead associations, insurance companies, savings bank, and other insured depository institutions within the region that are eligible and have become members of the FHLB (12 USC §§1422a, 1424, 1426, 1432). 2 As such, they do not fall within the definition of “bank” for purposes of acceptance of an “eligible letter of credit” under section 10 of the General Municipal Law.
General Municipal Legislation § 10(3)(c) are amended within the 2002, but not, so you can specifically reference new anticipate by the local governments regarding an “irrevocable page off borrowing from the bank” awarded because of the a keen FHLB so you’re able to safer too much places (L 2002, ch 615, energetic endment also renumbered current section (c) off subdivision 3 of area 10, as the this new subparagraph (c)(i).