55B - RESO INVESTMENT POLICY - Laserfiche WebLink

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Also, while not expressly prohibited by State law, unregistered securities, such as Rule 144A securities, may not be purchased by local agencies because local agencies do not meet the Securities and Exchange Commission definition of Qualified Institutional Buyers (QIB) 3 Section 53635.2 states that all local agency money may be invested in investments set forth in 53601 or deposited for safekeeping in state or national banks, savings associations, federal associations, credit unions, or federally insured industrial loan companies in this State. It also specifies certain requirements that such financial institutions must satisfy to hold local agency money. MINIMUM LEGAL REQUIREMENT: To be eligible to receive local agency money, a financial institution must receive an overall rating of not less than "satisfactory' from the appropriate federal supervisory agency for meeting the criteria specified in Section 2906 of Title 12 of the U.S. Code (Community Reinvestment Act of 1977). The Community Reinvestment Act of 1977 (Act) requires financial institutions to demonstrate their commitment to meeting the credit needs of local communities in which they are chartered to do business. For the purpose of the Act, the appropriate federal supervisory agency includes: The Comptroller of the Currency with respect to national banks; • The Board of Governors of the Federal Reserve System with respect to state chartered banks that are members of the Federal Reserve system and bank holding companies; • The Federal Deposit Insurance Corporation (FDIC) with respect to state chartered banks and savings banks that are not members of the Federal Reserve system and the deposits of which are insured by the FDIC; and • The Director of Office of Thrift Supervision with respect to savings associations (the deposits of which are insured by the FDIC) and savings holding companies. 3 CDIAC's "Issue Brief. Rule 144A Securities" prooides a sun n ary ofsecurities in this class: zozuzo. treasurer.ca.goz/cdiar/issuebrief.i20130Zpdf. LOCAL AGENCY INVESTMENT GUIDELINES 55B-47