RÉSUMÉ DIGEST
ACT 289 (HB 634) 2020 Regular Session Huval
Existing law requires a bank to provide security for deposits made by a political subdivision
of the state. Existing law specifies acceptable securities.
New 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 Ratings, 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 Ratings, 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.
New law 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.
Effective Aug. 1, 2020.
(Amends R.S. 39:1221 and 1242(A)(4); Adds R.S. 39:1242(E))