§ 9-4-508 — Collateral pool boards - Powers and duties

Tennessee § 9-4-508

• Jurisdiction: Tennessee
• Title: 9

Text

The collateral pool board has the following powers, together with all powers incidental thereto or necessary for the performance of those hereinafter stated: (1) The board may establish criteria, as may be necessary, to: (A) Approve entry into the collateral pool by a public depository; (B) Order discontinuance of participation in the program by a qualified public depository; (C) Restrict the total amount of public deposits held by a public depository that is subject to the authority of the board; (D) Establish collateral-pledging levels based on qualitative and quantitative standards as well as the number of participating qualified public depositories and the financial performance of such participants; and (E) Suspend or disqualify, or disqualify after suspension, any qualified public depository that has violated this part or rules adopted under this part. Any public depository that is suspended or disqualified pursuant to this subdivision (1) is subject to § 9-4-517 governing withdrawal from the public deposit security program and return of pledged collateral; (2) If the board has reason to believe that any qualified public depository or any other financial institution subject to the authority of the board is or has been violating this part or rules adopted under this part, it may issue to the qualified public depository or other financial institution an order to cease and desist from the violation or to correct the condition giving rise to or resulting from the violation. The board may suspend or disqualify any qualified public depository for violation of any order issued pursuant to this subdivision (2); (3) The board may establish a minimum amount of required collateral to provide for the contingent liability; (4) The board may establish a process by which to determine, to the greatest extent practicable, that a qualified public depository is securing all its public deposits through the collateral pool; (5) The board may review administration of the pool by the state treasurer and prepare an annual report on the condition of the pool; (6) The board may, at its discretion, require every qualified public depository to pay on a periodic basis an operating fee as may be set by the board. In determining whether to set a fee and the amount to be paid, the board may consider any matter which, in its discretion, it deems relevant including, but not limited to, the number of participating qualified public depositories and the financial performance of such participants; (7) The board, upon six (6) affirmative votes, may: (A) Promulgate reasonable and substantive procedural rules as are necessary to carry out the purpose and intent of this part, including, but not limited to, an increase or decrease in collateral pledge levels, except as provided in this part. Such rules must be adopted pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5; (B) Admit public depositories for participation in the collateral pool; (C) Delegate the board's duties to the state treasurer as the board deems appropriate. In exercising such delegation, the state treasurer is authorized to exercise such powers as are vested in the board that are necessary to fulfill the delegated duties and responsibilities, and may assign any such duties and responsibilities to the state treasurer's staff as the state treasurer deems necessary and proper; and (D) Revise the benchmark levels to be less stringent upon applicants; (8) The board may delegate any of its powers conferred in this section to the state treasurer; (9) The board may purchase insurance from insurers licensed to do business in this state for the purpose of providing coverage against loss caused by the default or insolvency of qualified public depositories. Any loss may be satisfied from such insurance prior to the assessment against qualified public depositories as provided in § 9-4-512(3) ; and (10) In exigent circumstances, and notwithstanding any law to the contrary, including § 9-4-509 and the Uniform Administrative Procedures Act, the board may make temporary changes to the required collateral and collateral pledge levels contained in the board's rules, including, but not limited to, the qualitative and quantitative standards for determining collateral pledge levels and the admission criteria; provided, that the following conditions are met and the substance of the changes are not otherwise inconsistent with applicable law: (A) The changes to the required collateral and collateral pledge levels must be approved by six (6) affirmative votes of the board and in a board meeting that complies with title 8, chapter 44, part 1; (B) In addition to providing a public meeting notice and board agenda, the board shall also provide the following to members of the public and other interested parties: (i) The specific changes to be contemplated by the board; (ii) The reasons for the changes; (iii) The effective date and expiration date of the changes; and (iv) The opportunity for members of the public and other interested parties to submit comments to the changes in advance of the meeting that must be addressed by the board during the board meeting and included in the minutes of the meeting; (C) The board shall make a determination, to be included in the minutes of the meeting, that exigent circumstances exist to necessitate a change in the required collateral or collateral pledge levels; and (D) The changes approved by the board must be made on a defined temporary basis. Once the changes expire, the required collateral and collateral pledge levels, including, but not limited to, the qualitative and quantitative standards for collateral pledge levels, and the admission criteria, must revert to the standards contained in the board's rules.

Legislative History

Amended by 2022 Tenn. Acts, ch. 1066, Secs.s7, s8 eff. 5/25/2022. Acts 1990, ch. 1043, § 1; 1992, ch. 592, §§ 17-20, 24; 1996, ch. 621, § 11; 1997 , ch. 217, §§ 4, 7.