Collateralization of State Accounts

Methods of Collateralizing State Accounts

O.C.G.A. § 45-8-12 requires depositories to collateralize public funds and O.C.G.A. § 45-8-13 allows depositories to collateralize public funds using either a dedicated pledge or pledging pool method. The State Depository Board has created two pledging pool programs. The Georgia Bankers Association (GBA) administers both programs.

Dedicated Method and Single Bank Pledging Pool

Under the Dedicated method, a depository collateralizes deposits made by a public depositor and administers each account separately. The depository must maintain collateral equal to 110% of the public funds it holds less the amount of deposit insurance. Under the Single Bank pooled method, a depository collateralizes deposits made by a public depositor through a pool of collateral established by the depository with a custodian. If a depository elects the pooled method, it may use the pooled method with some public depositors and the dedicated method with other public depositors.

Multibank Pledging Pool (Secure Deposit Program)

Large banks (≥$50 billion) are required, and others may apply, to participate in the contingent liability pool. The State Banking Commissioner and State Treasurer determine collateral pledging tiers according to the method approved by the State Depository Board. Public reporting of banks participating in the Secure Deposit Program and pledging information by bank  are available monthly.