Relating to the collateralization of certain public funds; providing administrative penalties.
Impact
The introduction of the pooled collateral program will have significant implications for both state regulations and participating financial institutions. The bill mandates that each participating institution secures its public deposits with eligible securities that equal at least 102 percent of the deposit amounts. This increased security measure is a protective step to ensure that public funds remain safeguarded against potential losses. Concurrently, the legislation allows participating institutions to utilize a single custodial account for their pooled securities, easing the administrative burden associated with managing multiple accounts for various depositor entities.
Summary
SB638 aims to amend Chapter 2257 of the Government Code to introduce a pooled collateral program that seeks to secure deposits of certain public funds. The bill establishes a framework for financial institutions to participate in a centralized collateralization system designed to protect public money deposited with them. This program is intended to streamline the collateral management process and enhance transparency between the Comptroller and participating financial institutions. By pooling collateral rather than requiring individual institutions to manage their own collateral for public deposits, the legislation facilitates a more efficient use of resources.
Contention
While proponents of SB638 argue that the bill will strengthen the security of public funds and provide a more uniform approach to collateral management, critics may voice concerns over the potential impacts of increased regulatory compliance on local institutions. The imposition of penalties for violations of collateralization requirements, such as failing to maintain the necessary collateral amounts or not adhering to reporting requirements, may be seen as excessive and could disproportionately affect smaller financial institutions. As a result, the bill could encounter resistance from entities worried about the regulatory burdens it introduces.
Additional_notes
Overall, SB638 represents a significant shift in how public funds are handled within Texas, moving towards a centralized and more standardized collateralization procedure. Its implications could reverberate across the banking sector, influencing how financial institutions engage with governmental entities and manage public funds. The effectiveness of this bill will largely depend on the subsequent rules adopted by the comptroller and the willingness of financial institutions to engage with the new program in a manner that meets compliance requirements.
Identical
Relating to the collateralization of certain public funds and to custodians with which certain pledged securities may be deposited; providing administrative penalties.
Relating to authorized investments of public money by certain governmental entities and the confidentiality of certain information related to those investments.
Relating to the regulation of sports wagering; requiring occupational permits; authorizing fees; imposing a tax; decriminalizing wagering on certain sports events; creating criminal offenses; providing administrative penalties.
Relating to the regulation of sports wagering; requiring occupational permits; authorizing fees; imposing a tax; decriminalizing wagering on certain sports events; creating criminal offenses; providing administrative penalties.
Relating to the regulation of money services businesses; creating a criminal offense; creating administrative penalties; authorizing the imposition of a fee.
Relating to the disclosure of certain gifts, grants, contracts, and financial interests received from a foreign source by certain state agencies, public institutions of higher education, and state contractors, and to the approval and monitoring of employment-related foreign travel and activities by certain public institution of higher education employees; providing civil and administrative penalties.
Relating to the disclosure of certain gifts, grants, contracts, and financial interests received from a foreign source by certain state agencies, public institutions of higher education, and state contractors, and to the approval and monitoring of employment-related foreign travel and activities by certain public institution of higher education employees; providing civil and administrative penalties.
Relating to the funding of projects by the Public Utility Commission of Texas to promote the reliability and resiliency of the power grid in this state; authorizing the issuance of revenue bonds.
Relating to the collateralization of certain public funds and to custodians with which certain pledged securities may be deposited; providing administrative penalties.
Relating to the establishment and administration of a state bullion depository and the investment of certain public money in precious metals and depository accounts.