Protecting public funds for Oregon governments and taxpayers

Across the state, government entities are able to conveniently and safely deposit public funds at local bank branches and credit unions. The money is protected through a program at Treasury known as the Public Funds Collateralization Program.

Banks and credit unions that want to provide deposit services for governments must first be approved as “qualified depositories.” The list of these institutions is a public record. Government entities must only use these depositories.

The federal government has insurance programs for bank and credit union deposits. However, if the volume of deposits are more than the maximum covered by insurance, then institutions must pledge a sufficient amount of collateral, based on their respective financial health.

That helps ensure that if the financial institution closes for whatever reason, the public funds can be recovered. As a result, taxpayers and governments are protected.

Overview

ORS chapter 295  governs the collateralization of Oregon public funds and provides the statutory requirements for the Public Funds Collateralization Program (PFCP) , including what qualifies as collateral.

Depositories

All depositories are required to submit reports to Treasury, providing information including public funds balances in excess of insurance limits, total public funds on deposit, depository net worth, and capitalization information. Depositories are categorized as well capitalized, adequately capitalized, or undercapitalized, and those categories help determine the thresholds for collateral and the required frequency of reporting.

Local Governments

Public officials are required to verify that deposit accounts in excess of deposit insurance limits are maintained at only those financial institutions included on the list of qualified depositories .

Public officials also are required to report at least annually, or within three days of a change, the depositories they do business with, and provide current contact information. Click here to learn how to report changes in depositories.

Custodian 

A custodian institution holds the securities pledged by each qualified depository. Depositories can request approval to pledge more, or to release, securities from their custodian account. Requests must meet relevant statutory and program requirements, before they can be approved by PFCP staff.

More information 

For additional information or to report a new depository relationship or the termination of a relationship, contact the PFCP staff at 503-378-3400 or public.funds@ost.state.or.us.