Wyo. Code R. 021-0002-5
Banking Division
Chapter 5: First Lien Mortgages as Collateral to Secure Public Funds
Effective Date: 10/24/1979 to 04/18/2014
Rule Type: Superceded Rules & Regulations
Reference Number: 021.0002.5.10241979
Date Filed 10/24/79
Expr Date
Supr Date
Repeal Date
Document Type RULES
Section 1. First Lien Mortgages. The basis for these rules is the enactment by the Forty-Fifth Legislature of the State of Wyoming which amended Section 1, W.S. 9-7-1125 to provide that banks and/or savings and loan associations may offer as security for deposits of public funds, in addition to those securities previously listed, conventional real estate first mortgages at a ratio of one and one-half to one (1.5:1) of the value of public funds secured thereby. The purpose of these rules is to set forth the procedures for pledging such conventional real estate first mortgages and to provide reporting requirements with a view to assure the protection of uninsured deposits of public monies with the banks and savings and loan associations in this state.
It shall be the duty and responsibility of the proper public entity treasurer to receive and verify the adequacy of the collateral, with the prior approval of the proper governing board, at such time as the funds are placed upon deposit with the depository financial institution and in such amount as to insure adequacy in the required ratio for the term of the deposit. When it is determined by the municipality that conventional real estate mortgages are to be accepted as security for its deposit of public funds, the following alternative for evidencing such collateralization may be accepted and conditions relating thereto shall be followed:
a. Collateral may be held in custody by the trust department of the depository when such trust department is formally organized and established pursuant to the authority of the proper bank regulatory authority, or a trust company chartered by the State of Wyoming, or any third party financial institution (bank or savings and loan association) authorized to hold property in escrow, and provided that the collateral shall include:
(1) The original note. (2) Copy of title insurance policy or legal opinion
(3) Delivery to the proper public fund treasurer, joint custody receipt and/or escrow agreement identifying the collateral as set forth in Section 2 of this regulation.
b. In lieu of the above, the collateral may be held by the proper treasurer who shall be responsible as provided by W.S. 9-71109, in which case the collateral shall contain the following:
(1) Original note. (2) Title insurance policy or legal opinion. (3) Assignment of mortgage filed and recorded. (4) Copy of payment schedule reflecting principal balance at time of pledge.
c. Depository institutions having offered and delivered conventional real estate mortgages as collateral for public fund deposits shall identify the copies of notes and mortgages remaining in the institution's files so as to evidence to officers, employees and regulatory examiners that such assets are in fact pledged. All supporting documentation ordinarily contained in the individual real estate files will be retained for review by the Banking Commissioners.
d. Collateral held, safekeeping receipts, joint custody receipts and escrow agreements held by the proper public fund treasurer shall be released by said treasurer promptly upon return of public funds to his (her) custody with copies for both depository institution and the escrow agent or trustee. Any assignment which may have been filed shall likewise be released promptly.
Section 2. Semi-Annual Reports. On or before the twentieth day of April and October of each year, each depository of public funds which has pledged conventional real estate mortgages shall report to the proper treasurer the following information for each public fund for which pledge has been given effective as of the preceding March 31 or September 30, as applicable, (a copy of which shall be forwarded to the State Banking Commissioner) the following information with respect to such collateral pledged:
(1) Identification of public fund secured by pledge. (2) Loan number.
(3) Current principal balance due.
(4) Note as to any material decrease in the value of the collateral.
(5) A statement that the note is not in default. Default is defined as being past due in excess of forty-five (45) days.
Section 3. Reports of Significant Changes of Eligible Collateral. Upon acquiring knowledge of any significant deficiency adversely affecting the eligibility of collateral, the depository institution shall immediately report such change to the proper public fund treasurer and shall promptly replace the deficient collateral with an acceptable pledge. A significant deficiency in collateral shall include a default in payment for more than fortyfive (45) days or any decrease in the value to the property less than the value initially tendered.
Section 4. Substitutions. Substitutions may be made by the depository institution to the trustee provided notice is given to the proper treasurer at the time of substitution.
Section 5. Property Value. It shall be the responsibility of the depository institution to provide the proper governing board such evidence as it may require as to the value of the collateral offered.
Section 6. Violation - Penalty. Willful violation of any of these regulations shall be grounds for cancellation, suspension or revocation of authority to act as an eligible depository.