How the Program Works
The application form for the depository institution and its partnering public entity, including the collateral security agreement, will soon be posted on this website. The agreement must have original signatures by both parties. Any collateral security agreement form used other than the one provided must first be approved by the Comptroller.
Only the parent institution of a depository institution may apply if deposits are to be held in any of its Texas branch locations. Branch institutions may not apply. The applying institution must maintain its main office or at least one branch office in Texas.The application requires:
- a statement of the institution's paid capital stock and surplus, if any;
- the applicant's condition according to the most recent financial statement from the date the application is submitted;
- that the applicant will maintain a separate, accurate, and complete record relating to a pledge of collateral, a deposit of public funds, and a transaction related to a pledge of collateral;
- and that the depository institution will provide, upon request, the Comptroller or a public entity information or confirmation regarding a deposit of public funds or a pledge of collateral.
The Comptroller will review the application and consider whether the organization's management and condition warrants the placing of public funds in their possession. The Comptroller may consider financial indicators that concern capital adequacy, asset quality, earnings and liquidity.
The Comptroller must also approve the related custodian trustee and the Comptroller and custodian trustee must have executed a custodian trust agreement.
Once an application is approved, the Comptroller will notify the depository institution and public entity, and the Comptroller will provide both of them with instructions and requirements for participation, including access to the program website.
Approval is effective until August 31st of each odd-numbered year, and the depository institution must re-apply for approval every two years.
Once approved, the depository institution must submit a new collateral security agreement for each new public entity before accepting its deposits.