412:2-409 Conservator's segregation of deposits. (a) In the commissioner's discretion, the commissioner may order or permit a conservator to accept deposits, notwithstanding the insolvency of the Hawaii financial institution; provided, that such deposits so received shall not be subject to any limitation as to payment or withdrawal, shall be segregated and kept apart from prior deposits, and shall not be used to liquidate any indebtedness of the institution existing at inception of the conservatorship or any subsequent debt incurred for the purpose of liquidating such prior indebtedness. Such deposits received by the conservator shall be kept in cash, invested in direct obligations of the United States, or deposited with a federally insured financial institution.

(b) Any order requiring segregation of deposits under this section shall remain effective no longer than thirty days after the conservator has returned possession and control of the affairs of the Hawaii financial institution to its board of directors. At least thirty days prior to the resumption of such possession and control, the conservator shall publish in a newspaper of general circulation in every county where the financial institution has places of business open to the public, a notice stating the date that possession and control will be returned to the board of directors, and that deposits received during the conservatorship will no longer be segregated in accordance with this section more than thirty days after that date. The notice shall be in a form approved by the commissioner and shall also be conspicuously posted at the principal office and each branch and agency office of the financial institution. The notice shall also be mailed to every person who has deposited funds with the institution during the conservatorship at the depositor's last known address as reflected in the records of the institution. [L 1993, c 350, pt of 1]

 

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