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<br /> <br />City of Santa - Annual Page <br />43 July 1, 2021 - <br />Statement of Investment Policy June 30, 2022 <br />53601.8. <br /> <br />Notwithstanding any other provision of this code, a local agency that has the authority under law to invest <br />funds, at its discretion, may invest a portion of its surplus funds in deposits at a commercial bank, savings <br />bank, savings and loan association, or credit union that uses a private sector entity that assists in the <br />placement of deposits. The following conditions shall apply: <br />(a) The local agency shall choose a nationally or state-chartered commercial bank, savings bank, savings <br />and loan association, or credit union in this state to invest the funds, which shall be known as the “selected” <br />depository institution. <br />(b) The selected depository institution may use a private sector entity to help place local agency deposits <br />with one or more commercial banks, savings banks, savings and loan associations, or credit unions that are <br />located in the United States and are within the network used by the private sector entity for this purpose. <br />(c) The selected depository institution shall request that the local agency inform it of depository institutions at <br />which the local agency has other deposits, and the selected depository institution shall provide that <br />information to the private sector entity. <br />(d) Any private sector entity used by a selected depository institution to help place its local agency deposits <br />shall maintain policies and procedures requiring all of the following: <br />(1) The full amount of each deposit placed pursuant to subdivision (b) and the interest that may accrue on <br />each such deposit shall at all times be insured by the Federal Deposit Insurance Corporation or the National <br />Credit Union Administration. <br />(2) Every depository institution where funds are placed shall be capitalized at a level that is sufficient, and be <br />otherwise eligible, to receive such deposits pursuant to regulations of the Federal Deposit Insurance <br />Corporation or the National Credit Union Administration, as applicable. <br />(3) At the time of the local agency’s investment with a selected depository institution and no less than <br />monthly thereafter, the private sector entity shall ensure that the local agency is provided with an inventory <br />of all depository institutions in which deposits have been placed on the local agency’s behalf, that are within <br />the private sector entity’s network. <br />(4) Within its network, the private sector entity shall ensure that it does not place additional deposits from a <br />particular local agency with any depository institution identified pursuant to subdivision (c) as holding that <br />local agency’s deposits if those additional deposits would result in that local agency’s total amount on <br />deposit at that depository institution exceeding the Federal Deposit Insurance Corporation or the National <br />Credit Union Administration insurance limit. <br />(e) If a selected depository uses two or more private sector entities to assist in the placement of a local <br />agency’s deposits, the selected depository shall ensure that it does not place additional deposits from a <br />particular local agency with a depository institution if those additional deposits would result in that local <br />agency’s total amount on deposit at that depository institution exceeding the Federal Deposit Insurance <br />Corporation or the National Credit Union Administration insurance limit. <br />(f) The selected depository institution shall serve as a custodian for each such deposit. <br />(g) On the same date that the local agency’s funds are placed pursuant to subdivision (b) by the private <br />sector entity, the selected depository institution shall receive an amount of insured deposits from other <br />financial institutions that, in total, are equal to, or greater than, the full amount of the principal that the local <br />agency initially deposited through the selected depository institution pursuant to subdivision (b). <br />(h) Notwithstanding subdivisions (a) to (g), inclusive, a credit union shall not act as a selected depository <br />institution under this section unless both of the following conditions are satisfied: <br />(1) The credit union offers federal depository insurance through the National Credit Union Administration.