2005 Minnesota Statutes

     46.045 Mandatory insurance of accounts. 

    Subdivision 1.    Continuing requirement.  Every bank 
 shall at all times maintain in effect insurance of its deposits 
 by the Federal Deposit Insurance Corporation, an agency of this 
 state or a federal agency established for the purpose of 
 insuring deposits in banking institutions.  In the case of 
 fiduciary funds deposited with the bank, this insurance 
 requirement may be met by depositing collateral security under 
 section 48.74.  A bank which fails to meet this requirement for 
 insurance of its deposits shall either dissolve, merge or 
 consolidate with another bank which is insured by the Federal 
 Deposit Insurance Corporation, an agency of this state or a 
 federal agency established for the purpose of insuring deposits 
 in banks.  For purposes of this section, "bank" means a bank 
 defined in section 46.046, subdivision 2, which accepts deposits.

    Subd. 2.    Application for insurance; uninsured banks.  
 Notwithstanding subdivision 1, a bank which does not have 
 insurance of its deposits or a commitment for insurance of its 
 deposits by the Federal Deposit Insurance Corporation, an agency 
 of this state, or a federal agency established for the purpose 
 of insuring deposits in banks or collateral security deposited 
 under section 48.74 on March 19, 1982, must apply for insurance 
 of deposits not later than July 1, 1983.  A bank subject to this 
 subdivision which has been denied a commitment for insurance of 
 its deposits shall either dissolve, merge, or consolidate with 
 another bank which is insured or apply in writing within 30 days 
 of denial to the commissioner of commerce for additional time to 
 obtain an insurance commitment.  The commissioner shall grant 
 additional time to obtain the insurance commitment upon 
 satisfactory evidence that the bank has made or is making a 
 substantial effort to achieve the conditions precedent to 
 issuance of the commitment.  Additional time shall not extend 
 later than July 1, 1984.  

    Subd. 2a.    Certain trust companies; secured deposit 
 exceptions; violations.  The requirements of this section may 
 be met by trust companies not exercising banking powers, with 
 the exception of deposit activities as defined in this 
 subdivision, provided the following conditions are met:  

    (a) the number of nonfiduciary deposit accounts does not 
 exceed 35, and; 

    (b) the total amount held in nonfiduciary deposit accounts 
 does not exceed five percent of the aggregate of the trust 
 company's capital stock, surplus, and undivided profits, and; 

    (c) the nonfiduciary funds deposited with the trust company 
 referred to in (a) and (b) shall be secured against loss by the 
 assignment, transfer to, and deposit with the commissioner of 
 commerce or a designee, of direct obligations of the United 
 States government in an amount, based upon the securities market 
 value, of not less than 110 percent of such deposited funds, 
 with the right of the trust company to collect the income and to 
 substitute other like securities of equal value, and; 

    (d) each account holder must be disclosed to in writing 
 that the account is not insured by the federal or state 
 governments or their agencies, and; 

    (e) the determination of the limitations in (a) and (b) 
 shall be made by the trust company from the records of the trust 
 company and based upon statement of financial condition at the 
 close of each business day, and security deposit defined in (c) 
 adjusted if needed within one business day thereafter, and; 

    (f) any violation of the requirements in (a) to (e) shall 
 be grounds for action by the commissioner under sections 46.24 
 to 46.33.  

    Subd. 3.    Insurance of accounts in new bank.  No bank 
 shall be issued a certificate of authorization after the 
 effective date of Laws 1982, chapter 473, sections 1 to 29 
 unless the bank has obtained a commitment for insurance of its 
 deposits by the Federal Deposit Insurance Corporation, an agency 
 of this state or a federal agency established for the purpose of 
 insuring deposits of banks. 

    Subd. 4.    Deposit insurance.  In any case where 
 Minnesota Statutes require, either generally or by reference to 
 a specific program, that deposits in any financial institution 
 be insured, the requirement shall be deemed satisfied if the 
 deposits are insured in the requisite amount by an agency of the 
 federal government insuring deposits. 

    HIST: 1982 c 473 s 1; 1983 c 289 s 20,114 subd 2; 1984 c 576 s 
 2; 1986 c 444; 1993 c 257 s 3