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Public Comment Period for Proposed Changes to the Collateral Rules

The Indiana Board for Depositories seeks any public comment or feedback on changes to the Collateral Rules that were presented to the Board at a special meeting on November 10, 2020. The Board is scheduled to vote to finalize the recommendations at its next regularly scheduled meeting on December 17, 2020.

If you would like to offer comments on the proposed changes at the board meeting on the December, 17, 2020, please let BFD staff know by emailing them to rlocke@tos.in.gov before 5:00p.m. EST on Friday, December 11, 2020.

Comments may also be submitted in writing by emailing them to rlocke@tos.in.gov before 5:00p.m. EST on Tuesday, December 15, 2020.

Primer on Proposed Changes

Clean Version of Proposed Final Rules

Proposed Final Rules with Changes Tracked

Proposed Collateralization Matrix

Collateral Class

Collateral Basis

Bank Insight National Rating

FIS FedFIS Rating

Pledge or
Pledge and Deliver

0%

N/A

N/A

N/A

N/A

50%

Average Daily Balance of Net Public Funds for the previous quarter

N/A

3.99 ≤ n ≥ 3.50

Pledge

100% (FedFIS)

Actual Daily Balance of Net Public Funds for previous day

N/A

n ≥ 4.00

Pledge and Deliver

100% (Bank Insight)

Actual Daily Balance of Net Public Funds for previous day

0 ≤ n ≥ 10

N/A

Pledge and Deliver

Collateralization Triggering Events

  • 100% Collateralization – any one (1) quarter
    • Bank Insight Rating ≤ 10; OR
    • FedFIS Rating ≥ 4.00
  • 50% Collateralization – two (2) consecutive quarters
    • FedFIS Rating ≥ 3.50 and ≤ 3.99

Collateralization Terminating Events

  • 100% to 50% – four (4) consecutive quarters
    • Bank Insight Rating > 10; AND
    • FedFIS Rating < 4.00 with any one (1) quarter or more with FedFIS Rating ≥ 3.50
  • Any to 0% – four (4) consecutive quarters
    • Bank Insight Rating > 10; AND
    • FedFIS Rating < 3.50

September 24, 2020

On September 24, 2020, the Indiana Board for Depositories made changes to the collateralization matrix - continuing the use of a second rating to analyze those institutions would have been required to collateralize deposits at 50% under the historical system. The Board voted to revise the matrix to apply this dual rating to all depositories whose Bank Insight National Rating was a 20 through a 39. This second rating, the FIS Rating presented by FedFis, must have be a 3.50 or greater for the second quarter of 2020 to trigger collateralization at 50% of net public funds on deposit for these financial institutions. All other collateral requirements remain the same as before the board meeting.

For any questions or clarification, please reach out to the Indiana Board for Depositories.


June 26, 2020

On June 25, 2020, the Indiana Board for Depositories made changes to the collateralization matrix - adding a second rating to analyze those institutions whose Bank Insight National Rating was a 33 through a 39. This second rating, the FIS Rating presented by FedFis, must have be a 3.25 or greater for the first quarter of 2020 to trigger collateralization at 50% of net public funds on deposit for these "cusper" financial institutions. All other collateral requirements remain the same as before the board meeting.

For any questions or clarification, please reach out to the Indiana Board for Depositories.

Next Board Meeting

NOTICE

On Thursday, March 18, 2021, at 10:00 a.m.,
the Indiana Board for Depositories will meet virtually

The Indiana Board for Depositories will meet in Executive Session
pursuant to IC 5-14-1.5-6.1 and IC 5-13-12-2 to discuss the financial strength of a particular institution
and the collateral requirements of particular institutions as authorized by IC 5-13-12-2(c)(1-3).

The Board will meet directly following the Executive Session in a Public Session to perform its official business.

Virtual Board Meeting Link

Submitted by Ryan Locke
Deputy Treasurer of State

One North Capitol Avenue, Suite 900, Indianapolis, IN 46204-2043
Phone: (317) 232-5258 Fax: (317) 232-6650 Email: rlocke@tos.in.gov

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