Compliance Bulletin

CBA-Sponsored Bill on Local Agency Deposits Enacted
August 24, 2015

CBA sponsored a bill to expand the 10 percent limit on surplus funds that local agencies are permitted to place in non-CD reciprocally-insured deposits of a single provider. The limit for reciprocally-insured CDs is 30 percent. The lower cap for non-CD deposits gives banks that offer the service little incentive to compete for agency deposits. Meanwhile the state Legislature found that the characteristics of these non-CD deposits were not very different from CDs. AB 283, signed last week by Governor Jerry Brown and effective in January 2016, treats CD reciprocal deposits and non-CD reciprocal deposits the same for purposes of a local agency’s aggregate investment cap. See CBA’s Regulatory Compliance Bulletin for more information