Virginia Code 2.2-4404: Procedure for payment of losses by dedicated method
When the Treasury Board determines that a qualified public depository securing public deposits in accordance with this section is a defaulting depository, it shall as promptly as practicable take steps to reimburse public depositors of all uninsured public deposits using the following procedures:
Terms Used In Virginia Code 2.2-4404
- Defaulting depository: means any qualified public depository determined to be in default or insolvent. See Virginia Code 2.2-4401
- Eligible collateral: means securities or instruments authorized as legal investments under the laws of the Commonwealth for public sinking funds or other public funds as well as Federal Home Loan Bank letters of credit issued in accordance with guidelines promulgated by the Treasury Board. See Virginia Code 2.2-4401
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- Qualified public depository: means any national banking association, federal savings and loan association or federal savings bank located in Virginia, any bank, trust company or savings institution organized under Virginia law, or any state bank or savings institution organized under the laws of another state located in Virginia authorized by the Treasury Board to hold public deposits according to this chapter. See Virginia Code 2.2-4401
- State: when applied to a part of the United States, includes any of the 50 states, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands, and the United States Virgin Islands. See Virginia Code 1-245
- Treasury Board: means the Treasury Board of the Commonwealth created by § 2. See Virginia Code 2.2-4401
1. The Treasury Board shall ascertain the amount of uninsured public deposits held by the defaulting depository with the cooperation of the Commissioner of Financial Institutions, the receiver appointed for such depository or by any other means available.
2. The amount of such uninsured public deposits ascertained as provided in subdivision 1, plus any costs associated with liquidation of the eligible collateral of the defaulting depository, shall be assessed by the Treasury Board against the defaulting depository. The State Treasurer shall promptly take possession of the eligible collateral deposited by such depository with the depository’s escrow agent, as is necessary to satisfy the assessment of the Treasury Board and shall liquidate the same and turn over the net proceeds to the Treasury Board.
3. Upon receipt from the State Treasurer of the eligible collateral liquidated, the Treasury Board shall reimburse the public depositors from the proceeds of the collateral up to the extent of the depository’s deposit liability to them, net of any applicable deposit insurance.
1984, c. 135, § 2.1-363.1; 2001, c. 844; 2009, c. 64; 2010, cc. 640, 674.