Each depositor insured to at least $250,000 per insured bank

Pledge of Government Securities for the Purpose of Securing Bank Deposits In Excess of $100,000

FDIC-90-10

February 16, 1990

Gerald J. Gervino, Senior Attorney

In your letter to us, you inquire concerning the pledging of government securities to cover deposits in excess of $100,000 maintained by a public unit in your bank. You specifically ask for our opinion as to whether or not the bank may secure public funds with government securities to the extent that the funds exceed our insurance limitations.

The FDIC has no rule or regulation that prohibits a pledge of government securities for the purpose of securing bank deposits. We suggest that you may wish to contact local bank regulatory authorities or local counsel for an opinion with respect to local law.