In March 2019, the Nebraska Legislature passed LB622 which amended the Public Funds Deposit Security Act to provide an additional method whereby financial institutions could secure public deposits held with the institution that exceed the insurance limits provided by the Federal Deposit Insurance Corporation (FDIC). In additional to the direct method, financial institutions may now pledge a pool of eligible collateral to secure the aggregate balance of uninsured public deposits held with the institution.
The amendments provided authorization for the Director of the Department of Banking & Finance to appoint an administrator to carry out its rights and responsibilities in respect to the pooled method.
In May of 2020, the Director appointed the Nebraska Bankers Insurance and Services Company (NBISCO) as the Administrator of the Single Bank Pooled Collateral program for the State of Nebraska.
- Ensure each participating Financial Institution has signed a Security Agreement and Custodial Agreement
- Review the Administrator's most recent Annual Financial Report
- Ensure Administrator has a performance bond or Letter of Credit in place as required by the Administrator Agreement.
- Review a sample of invoices from the Administrator to participating Financial Institutions to ensure fees comply with those established in the Administrator Agreement.
- Review the Administrator's insurance coverage to ensure compliance with the Administrator Agreement.
- Review list of pledged instruments for each participating Financial Institution for compliance.
- For any letters of credit pledged, review the signed letters to ensure that the Administrator is listed as beneficiary.
- Reconcile a sample of monthly Financial Institution reports submitted to the Administrator with the monthly Compliance report.
- Reconcile a sample of monthly Financial Institution reports with the Qualified Trustee reports
- Review a sample of Securities Pledged/Released forms and reconcile with the next month's pledged securities report.
- Review depositor verification procedures between Financial Institution and Administrator
- If a default has occurred during the exam period, verify that procedures, as established by the Act, were adhered to.
- Review prior exam findings (if applicable) for remediation.
- Review training procedures for depositories at on-boarding.
- Review instances of pledge deficiencies, subsequent notification, and resolution (if applicable).