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Minnesota Legislature

Office of the Revisor of 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.
History: 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