Louisiana Senate Bill SB88

Louisiana 2010 Regular Session

• Introduced: 3/29/10
• Refer: 3/29/10
• Report Pass: 4/14/10
• Engrossed: 4/19/10
• Refer: 4/20/10
• Report Pass: 6/7/10
• Enrolled: 6/17/10
• Chaptered: 7/6/10
• Passed: 7/6/10

Caption

Exempts certain deposits insured or guaranteed by a governmental agency insuring bank deposits that is organized under federal law from security requirements. (8/15/10) (EN NO IMPACT See Note)

Impact

The primary impact of SB88 is the alteration of the financial landscape for governmental depositors within Louisiana. By exempting federally secured deposits from stringent security measures, the bill creates a streamlined framework for how these deposits are handled. This could reduce administrative burdens and allow government agencies to allocate resources more effectively, focusing on operational needs rather than compliance with excessive security regulations. However, this also raises questions about the level of financial protection for public funds, potentially leaving a gap in safety protocols that could affect fiscal responsibility.

Summary

Senate Bill No. 88, introduced by Senator Morrell, proposes an amendment to R.S. 39:1242(C) concerning the security for deposits related to financial institutions and governmental agencies. This bill aims to exempt certain deposits that are insured or guaranteed by a governmental agency, specifically those established under federal law, from the existing security requirements. The change is intended to simplify the financial process for government entities by reducing the need for additional securities for deposits that are already insured, thus promoting a more efficient approach to public funds management.

Sentiment

The sentiment surrounding SB88 appears to be cautiously optimistic among proponents, particularly from those in governmental roles who advocate for deregulation where prudent. Supporters argue that the bill is a step forward in optimizing state financial practices and encourages a more manageable approach to dealing with federally insured deposits. Nevertheless, there exists a concern from some financial oversight groups who fear that loosening security standards might expose public funds to unnecessary risks, potentially leading to a public backlash on accountability and transparency.

Contention

A notable point of contention regarding SB88 revolves around the balance between efficient government operation and the safeguarding of taxpayer funds. Supporters argue that the regulatory relief granted through this bill would not compromise the integrity of insured deposits, while opponents caution against complacency in financial management. There is an ongoing debate about whether the benefits of reducing security requirements outweigh the potential risks involved, setting the stage for lively discussions among legislators and stakeholders concerned about fiscal policy and management.