A F E Security for Alabama Funds Enhancement Young Boozer, State Treasurer
History • That Fateful Call • The Headlines • We have a problem • Get a solution
The Process • Pledging Statute • Under Pledged • Over Pledged • Bank Group Organized • Other States • Best Result
The Solution • SAFE • Enacted 2001 • Going Strong
SAFE: Description Statute: Title 41, Chapter 14A, Code of Alabama (effective January 1, 2001) Participants • Board of Directors • SAFE Staff • Alabama Banks • Alabama Public Depositors • Custodian SAFE Program Rules Monthly Reporting by Banks
SAFE Board of Directors State Treasurer Young Boozer, Chair Lucinda Cockrell CPA and Sumter County Administrator Robert Davis President and CEO, RBC Centura Bank Ken Givens Chief Financial Officer, Aliant Bank John Harrison Superintendent of the Alabama Department of Banking Penny Smith Deputy Finance Director and Treasurer for the city of Auburn Alvis Storey President, Merchants & Farmers Bank of Greene County Kimberlea Wilson Senior Vice President, Regions Financial Corporation
SAFE: Program Benefits • Cost/Time Savings • Increased Efficiency • Improved Liquidity • Improved Security • Triple “Insurance” Coverage
SAFE: Key Definitions Covered Public Entities Various governmental units of the state, counties, municipalities and other government entities or officials Funds owned by a covered public entity are considered public funds.
SAFE: Key Definitions Public Deposits Monies of any covered public entity or covered public official deposited in a bank, such as demand deposit accounts, savings accounts and certificates of deposit
SAFE: Key Definitions Qualified Public Depositoryor QPD Any bank that has met all SAFE Program requirements has been designated by the Treasurer to receive and hold public deposits By law, a bank must be a QPD to have public deposits.
What defines a QPD? • Is organized and exists in the U.S. • Is authorized to conduct the business of making loans and taking deposits in the State of Alabama • Has FDIC insurance • Executes necessary SAFE Program forms
What is a Public Entity? • A state and its political subdivisions • Counties and their agencies • Municipalities and their agencies • Public corporations • Improvement authorities
Public Depositor ResponsibilitiesSAFE Rules 892-X-1-.09 • Deposit monies in QPD • Declare monies are public deposits • Verify annual account information received from bank as of September 30 • Contact bank if no statement is received or information is incorrect • If bank defaults, submit claim form to SAFE
Public Deposits Not in SAFE • Act 2009-471 amended §41-14A-3 to allow public depositors to place funds in QPDs that are not covered by SAFE • Deposits are managed by an Alabama bank that distributes the deposits among several banks and each bank deposit is within FDIC limits
What happens when… ? A bank is SOLD • It re-opens on Monday under its new name. • There is no affect on public deposits. • It has 90 days to update SAFE documents.
What happens when… ? A bank FAILS • FDIC manages bank affairs • Public depositor files a SAFE claim form within 120 days for deposits not covered under FDIC (§ 41-14A-9)
SAFE Stats • 164 participating Alabama banks • 4 non-participating banks: • Oakworth Capital (Birmingham) • Bank of Ozarks (Mobile) • Beal Bank (Irondale) • First Progressive Bank (Brewton) • Net Collateral Pool $7.9 Billion
Questions? www.treasury.alabama.gov Click SAFE