DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part of the
legislative instrument. The keyword, one-liner, abstract, and digest do not constitute part of the law
or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 634 Engrossed 2020 Regular Session Huval
Abstract: Removes the maturity date restrictions on securities that banks pledge to secure local
public funds.
Present law requires a bank to provide security for deposits made by a political subdivision of the
state. Specifies acceptable securities.
Proposed law authorizes the following additional forms of security for such deposits:
(1)Bonds, debentures, notes, or other indebtedness issued by a state of the United States of
America other than Louisiana or any such state's political subdivisions provided that the
indebtedness has a long-term rating of A3 or higher by Moody's Investors Service, a long-
term rating of A- or higher by Standard & Poor's or a long-term rating of A- or higher by
Fitch, Inc., or a short-term rating of M1G1 or VM1G1 by Moody's Investors Service, a short-
term rating of A-1 or A-1+ by Standard & Poor's, or a short-term rating of F1 or F1+ by
Fitch, Inc.
(2)Bonds, debentures, notes, or other indebtedness issued by domestic United States
corporations provided that the indebtedness has a long-term rating of Aa3 or higher by
Moody's Investors Service, a long-term rating of AA- or higher by Standard & Poor's, or a
long-term rating of AA- or higher by Fitch Ratings, Inc.
Proposed law also provides that no provision of law limits or restricts the duration of bonds,
debentures, notes, or other indebtedness that are used a security for deposits or investments made
by a political subdivision.
(Amends R.S. 39:1221 and 1242(A)(4); Adds R.S. 39:1242(E))