Article - State Finance and Procurement
(a) State money
on deposit with a financial institution shall be secured by:
(1) deposit insurance;
as required by this section.
(b) (1) The
collateral for State money on deposit with a financial institution:
(i) must have,
at all times, a market value that equals or exceeds the State money
that is on deposit with the financial institution and is not covered
by deposit insurance; and
(ii) must be approved
by the Treasurer.
(2) If the collateral
is a surety bond under § 6-202 of this subtitle:
(i) the surety
bond shall be in a form and amount acceptable to the Treasurer as
determined by the Treasurer from time to time; and
(ii) the financial
institution that provides the surety bond as collateral shall immediately
notify the Treasurer if the rating assigned to the issuing insurance
company by any rating agency, found acceptable to the Treasurer under §
6-202 of this subtitle, is withdrawn or downgraded, in which event
the financial institution shall immediately provide the Treasurer
with substitute collateral permitted under § 6-202 of this subtitle.
(3) Subject to
the requirements of this subsection, a financial institution may change
its collateral from time to time.
(c) (1) A
custodian shall hold the collateral under this section for the benefit
of the State.
(2) A financial
institution may use as a custodian:
(i) any banking
institution that is approved by the Commissioner of Financial Regulation
to conduct commercial banking business in the State;
(ii) a federal
reserve bank; or
(iii) any national
banking association that is approved by the Comptroller of the Currency
to conduct banking business in the State.
(3) A financial
institution may not be approved as custodian for the collateral of
a depositary unless the assets of the financial institution equal
or exceed 200% of the value of the collateral to be held for the depositary.