Creates new provisions relating to banks that secure public funds
Impact
The implementation of HB 1313 is expected to simplify the process for governmental entities to deposit funds securely. It allows them the option to utilize a pooled method of securing their deposits rather than adhering strictly to the traditional individual direct pledge method. This flexibility is particularly significant for smaller governmental entities that may find it logistically challenging to manage multiple securities for each deposit.
Summary
House Bill 1313 seeks to update existing regulations related to banking institutions that secure deposits of public funds by repealing the current section 362.490 of RSMo and enacting a new section. The bill introduces the concept of a single bank pooled method that allows a banking institution to secure deposits from multiple governmental entities through a collective pool of securities, as opposed to requiring separate securities for each entity. This aims to streamline the process of securing public funds while ensuring adequate protections for those deposits.
Contention
Discussion surrounding HB 1313 has revealed potential points of contention regarding the adequacy of protection for public funds. Some critics may express concerns that moving to a pooled security system could diminish the accountability and individual security that governmental entities currently have under the direct pledge method. The shift emphasizes a central administrator's role who will manage the pooled securities, which could be perceived as a reduction of local control and oversight over public funds.