412:4-112 Pledging of assets. (a) No financial institution shall give a preference to any depositor by pledging the assets of the financial institution, except as otherwise authorized by this chapter; provided that any financial institution may for any purpose borrow money and pledge or hypothecate its assets as collateral security therefor.

(b) A financial institution may pledge its assets to secure deposits or borrowing of public funds. For purposes of this section, "public funds" means funds belonging:

(1) To the State, if credited to the State or to the official credit of the director of finance;

(2) To any county within the State, if credited to such county or to the official credit of the treasurer or similar fiscal officer of the county;

(3) To the government of any state or foreign country, or any territory or possession thereof, or any of its political subdivisions, instrumentalities or municipalities, in which the pledging financial institution has a branch office, if credited to such government or to the official credit of the treasurer or similar fiscal officer thereof;

(4) To the United States, if credited in such manner and under such rules and regulations as may be prescribed by the United States government.

Once the financial institution has complied with all conditions necessary for the return of any assets it has pledged to secure the deposit or borrowing of the public funds, the government official in possession of such assets shall promptly return the same to the financial institution. If such assets are not so returned, the financial institution shall have its appropriate remedies at law and in equity, including, in the case of the State or any county of the State, the remedies under chapter 38; provided, that nothing in this subsection shall permit the avoidance of any requirements or liabilities imposed on the State or any county under chapter 38. [L 1993, c 350, pt of 1]

 

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