Cash Management - Information for Banks
Frequently Asked Questions
What are the requirements to become designated as a depository to accept deposits on behalf of the State of New York?
- The bank must be a commercial bank unless legislation has been passed that allows savings banks to participate in a particular program.
- The bank must be willing to pledge collateral for all deposits as outlined in Section 105 and Section 106 of New York State Finance Law.
- The bank must have at least a LACE rating of a C+ or a comparable rating by another rating agency.
- The bank must complete and have on file with the Comptroller's
Office a "Bank Undertaking and Assignment of Security."
My bank is a savings bank, what types of deposits can we accept?
- State agency bank accounts must be deposited in commercial
banks only. However, savings banks may participate
in the Excelsior
Linked Deposit Program and the Banking
Development District Program.
Does my bank have to meet the same requirements to participate in the Excelsior Linked Deposit Program and the Banking Development District?
- No. Each program has their own unique requirements
before funds may be deposited into a bank. Please
refer to the specific programs for requirements.
What types of securities can be pledged as collateral to secure State deposits?
- Securities used as collateral for State deposits must be held at the State's fiscal agent.
- For demand deposit accounts, acceptable securities that may be used are outlined in State Finance Law Section 105 and include U.S. Treasuries, New York State Municipals and Government National Mortgage Association (GNMAs). Banks may also use a surety bond to secure State deposits. The bond must be issued by a AAA rated insurance company.
- For certificates of deposits, acceptable securities that
may be used are outlined in New York State Finance
Law Section 98a.
My bank requires a third party agreement for collateral, do you sign them?
- No. Since securities must be held at the State's fiscal agent, we already have an agreement with them.
My bank currently does not have any State deposits. How can we obtain them?
- There are several ways in which banks can obtain State
- Large banking relationships are generally bid through the competitive bidding process. All Request for Proposals must be published in the New York State Contract Reporter. You may subscribe to the New York State Contract Reporter by going to www.nyscr.com.
- Several State facilities deposit client and inmate funds in Certificate of Deposits through the competitive bidding process. To add your bank's name to the list who participate in the bidding, you should contact the individual facility's business office.
- Each agency also maintains their own bank accounts. It would be up to your bank to solicit banking services to the agency's business offices. Banks generally select banks based on location, costs and the services that are provided. Once an agency agrees to open a new account with a bank, they will formally request the establishment of the account from the Comptroller's Office.
- The State also offers the Excelsior Deposit Program and the Banking Development District Program which has their own unique requirements. Please refer to the specific programs for further information.