Public Deposit Collateral Pool Programs

The Georgia Bankers Association (GBA) administers two public deposit collateral pool programs for the Office of the State Treasurer of the State of Georgia. The programs are The Georgia State Pledging Pool Program and the Georgia Secure Deposit Program.

Summary of Public Deposit Collateralization Methods in Georgia

Office of the State Treasurer Bank Policy (Sept. 2019)

Office of the State Treasurer Banking website

Georgia State Pledging Pool (Single Bank Pool)

Under this program, a bank pools its collateral against its entire portfolio of public deposits instead of pledging to each depositor.

  • The bank is required to pledge collateral equal to or greater than 110% of the net public deposits (total minus FDIC coverage) of its public unit depositors that agree to have their deposits protected by the program.
  • Collateral is pledged to the State Treasurer of the State of Georgia.
  • In the event of a default or loss, the Treasurer seizes the collateral, liquidates it and pays depositors the amount in their accounts not covered by FDIC insurance.
  • A bank must be eligible to be a state depository to participate. Generally that means the bank is at least adequately capitalized.
  • If your bank establishes a pool, each public depositor decides whether to participate, not the bank. They simply sign a form we provide you to authorize their participation. Participants provide us a monthly report that tracks their aggregate public deposits and the value of the securities pledged.
  • There is a $500 application fee and a monthly fee of $8.50 per depositor covered by the program to participate. GBA has administered this program for the Office of the State Treasurer since 1999.
  • The current banks using the pool have about 150 public depositors covered.

Georgia Secure Deposit Program (Multibank Contingent Liability Pool)

In 2016, the Georgia General Assembly passed and Gov. Deal signed SB 283 authorizing a multibank contingent liability pledging pool to protect public deposits.

  • The program potentially allows banks to pledge collateral at levels ranging from 25% to 110%.
  • Collateral is pledged to the State Treasurer of the State of Georgia. Participants agree to contingent liability provisions to join the other banks in the program in covering losses to depositors not covered by FDIC insurance or the sale of collateral pledged to the program, based on their pro rata share of deposits covered by the program.
  • All banks that accept public deposits in Georgia and also have total assets of more than $50 billion are required to participate in this program.
  • Banks with lower assets may also apply to participate in the program.
  • Participants report monthly information about their total deposits in the program, collateral types, amounts pledged and their depositors covered by the program. Reports about the banks that participate, the depositors covered by the program and a summary of participant deposit and collateral positions are posted publicly each month.
  • Banks that participate in the Secure Deposit Program are not allowed to use the direct pledging method or the single-bank Georgia State Pledging Pool Program. So, there‚Äôs no opt-out or exemption from being covered by the program for public depositors of banks participating.