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Also, while not expressly prohibited by State law, unregistered securities, such as Rule 144A <br />securities, may not be purchased by local agencies because local agencies do not meet the <br />3 <br />Securities and Exchange Commission definition of Qualified Institutional Buyers (QIB). <br />What requirements must a financial <br />II.B <br />institution satisfy before a local agency <br />may deposit its money init? \[Section 53635.2\] <br />Section 53635.2 states that all local agency money may be invested in investments set forth in <br />53601 or deposited for safekeeping in state or national banks, savings associations, federal <br />associations, credit unions, or federally insured industrial loan companies in this State. It also <br />specifies certain requirements that such financial institutions must satisfy to hold local <br />agency money. <br />MINIMUM LEGAL REQUIREMENT: <br />To be eligible to receive local agency money, a financial institution must receive an overall <br />meeting the criteria specified in Section 2906 of Title 12 of the U.S. Code (Community <br />Reinvestment Act of 1977). The Community Reinvestment Act of 1977 (Act) requires financial <br />institutions to demonstrate their commitment to meeting the credit needs of local <br />communities in which they are chartered to do business. For the purpose of the Act, the <br />appropriate federal supervisory agency includes: <br />to state chartered banks and savings <br />The Comptroller of the Currency <br />banks that are not members of the <br />with respect to national banks; <br />Federal Reserve system and the <br />deposits of which are insured by the <br />The Board of Governors of the <br />FDIC; and <br />Federal Reserve System with respect <br />to state chartered banks that are <br />The Director of Office of Thrift <br />members of the Federal Reserve <br />Supervision with respect to savings <br />system and bank holding <br />associations (the deposits of which <br />companies; <br />are insured by the FDIC) and <br />savings holding companies. <br />The Federal Deposit Insurance <br />Corporation (FDIC) with respect <br />3 <br /> CDIAC's "Issue Brief: Rule 144A Securities" provides a summary of securities in this class: <br />www.treasurer.ca.gov/cdiac/issuebriefs/201307.pdf. <br />LOCAL AGENCY INVESTMENT GUIDELINES <br /> <br />