Rural Water - Quarter 4, 2008 - (Page 20)

BANK COLLATERAL in Nervous Times WE HAVE ONLY to look back to the ’80s and ’90s to remember the record number of bank failures and recall how trying that situation can be for public entities. No one expects bank failures of that earlier magnitude, but the key to assuring the safety of public funds is to know that you have full contractual and statutory control over the situation. There are a number of major control checkpoints that are beneficial to assure you have done enough to protect your assets sitting in time (CD) and demand (accounts) deposits for your entity. The elements you need for safety (and peace of mind) are listed below as a quick review. FIRREA Compliance First and foremost, assure that you have a written and current depository/collateral agreement and that it is compliant with the Financial Institutions Resource and Recovery Enforcement Act (FIRREA). FIRREA is the statutory baseline for the FDIC when they come in to close or bridge a bank. The four conditions in the Act must be met in order for the Federal Deposit Insurance Corporation (FDIC) to honor the collateral agreement you have in place with your bank. The Act’s four key conditions are: 1. The agreement must be in writing. Is your depository agreement in place, in writing and up-to-date? If your bank has merged or been acquired and assignment of services or ownership was made, it might be a good time to reexecute the agreement with the new entity just to ensure that all terms and conditions are met and have been assumed by all parties. ©WWW.ISTOCKPHOTO.COM/VASILIY YAKOBCHUK 20 • Fourth Quarter 2008

Table of Contents for the Digital Edition of Rural Water - Quarter 4, 2008

Rural Water - Quarter 4, 2008
From the President
Rural Water: Where are We Headed?
The Future of Water in America
Bank Collateral Controls in Nervous Times
Bottle of Water or Billion Dollar Bully?
Aqua Chocolate No Mas
Why Even Small Water Systems Should Have Personnel Policy Manuals
Safe Drinking Water
Regulatory Update
2008 NRWA Industry Event
Throwing My Loop
Index to Advertisers
From the CEO

Rural Water - Quarter 4, 2008