(a)  Every financial institution subject to this chapter shall deposit with the general treasurer an amount that is at all times equal in value to twenty percent (20%) of the entire capital stock of the financial institution, in:

(1)  Bonds, of at least a double A (“AA”) rating or equivalent, of this state or of any state or of the United States;

(2)  Bonds, rated at least double A (“AA”) or equivalent, notes, or other financial obligations of any town or city in this state;

(3)  Any securities of the classes in which the sinking fund commission of this state is authorized to invest the moneys received by it;

(4)  First mortgages on improved real estate in this state of the class required for financial institution investments;

(5)  Mortgages insured and debentures issued by the federal housing administration; or

(6)  Obligations of national mortgage associations.

Terms Used In Rhode Island General Laws 19-3.1-8

  • Executor: A male person named in a will to carry out the decedent
  • Guardian: A person legally empowered and charged with the duty of taking care of and managing the property of another person who because of age, intellect, or health, is incapable of managing his (her) own affairs.
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • real estate: may be construed to include lands, tenements, and hereditaments and rights thereto and interests therein. See Rhode Island General Laws 43-3-10
  • town: may be construed to include city; the words "town council" include city council; the words "town clerk" include city clerk; the words "ward clerk" include clerk of election district; the words "town treasurer" include city treasurer; and the words "town sergeant" include city sergeant. See Rhode Island General Laws 43-3-9
  • Trustee: A person or institution holding and administering property in trust.
  • United States: include the several states and the territories of the United States. See Rhode Island General Laws 43-3-8

(b)  These investments shall be held by the general treasurer as an additional security for the faithful performance by the financial institution of its duties as trustee, executor, custodian, conservator, guardian, assignee, or receiver, and also as an additional security for the repayment of deposits with the financial institution by executors, administrators, custodians, conservators, guardians, assignees, or receivers, or trustees on special agreement, made to exonerate the depositors under this title from personal liability to the estates on account of which these deposits were made. The parties intended to be secured by the deposits shall, in case of loss, be first fully indemnified out of the deposit, in preference to all other creditors of the financial institution. However, whenever the deposit or any part of it consists of mortgages on real estate, the financial institution so depositing it shall execute an assignment of the deposit and of the debts secured by it in favor of the general treasurer, in trust, for the uses and purposes listed in this section. No financial institution shall accept or assume to perform any of the trust duties mentioned in this section or receive any deposits from any of the trustees until the deposit has been made. If the security required by this section is one that is maintained in the Federal Reserve book entry system or the depository trust company book entry system or any similar entity, then the financial institution required to make the deposit shall designate the general treasurer as the pledgee of the security and provide written notification to the general treasurer identifying the security.

History of Section.
P.L. 1995, ch. 82, § 41.