Section 1700-04-01-.04 - DETERMINATION OF COLLATERAL PLEDGE LEVEL(1) Collateral Pledge Level. A qualified public depository shall pledge eligible collateral having a market value of not less than the greater of the average daily balance or average monthly balance of public deposits held by the qualified public depository multiplied by the qualified public depository's collateral pledging level. The collateral pledging level for all qualified public depositories shall be calculated quarterly according to the following schedule: (a) The collateral pledge level shall equal one hundred percent (100%) for the following: public depositories meeting seven (7) out of the nine (9) benchmarks and three (3) out of the four (4) capital ratios pursuant to rule 1700-04-01-.03(2)(b) and (c); and public depositories electing to use the Community Bank Leverage Ratio Framework contained in 12 CFR Part 3, 12 CFR Part 217, 12 CFR Part 324 meeting six (6) out of the eight (8) benchmarks and two (2) out of the three (3) capital ratios pursuant to rule 1700-04-01-.03(2)(b) and (c).(b) The collateral pledge level shall equal one hundred fifteen percent (115%) for the following: public depositories meeting fewer than seven (7) out of the nine (9) benchmarks or fewer than three (3) out of the four (4) capital ratios pursuant to rule 1700-04-01-.03(2)(b) and (c); and public depositories electing to use the Community Bank Leverage Ratio Framework contained in 12 CFR Part 3, 12 CFR Part 217, 12 CFR Part 324 meeting fewer than six (6) out of the eight (8) benchmarks or fewer than two (2) out of the three (3) capital ratios pursuant to rule 1700-04-01-.03(2)(b) and (c).(c) The Board may determine from time to time the benchmark levels referenced in this chapter. The benchmarks established by the Board for collateral pool admission may differ from the benchmark levels established by the Board for evaluating collateral pool pledge levels. The financial information necessary in determining whether the benchmark levels have been met by a qualified public depository for a given quarter shall be taken from the quarterly report provided to the board from the public depository or any other source the State Treasurer deems reliable.(2) Minimum Pledged Collateral. Notwithstanding the average daily balance or average monthly balance, qualified public depository shall maintain a minimum of pledged eligible collateral whose market value is not less than one hundred thousand dollars ($100,000.00).(3) Temporary Increases in Collateral. A qualified public depository which accepts any public deposit that causes its public deposits to exceed the greater of its average daily balance, or average monthly balance by twenty-five percent (25%) shall be required to pledge additional eligible collateral with the Treasurer within two (2) business days of the deposit. The additional eligible collateral shall be equal to the difference between the actual public deposits and the greater of the average daily balance or average monthly balance times the applicable collateral pledge level. The additional eligible collateral shall not be required if deposits causing the increase are withdrawn within the two (2) business days and prior to pledging of the additional collateral. Additional pledged collateral shall be included in required collateral and held by the Treasurer until the next regular monthly report is filed.Tenn. Comp. R. & Regs. 1700-04-01-.04
Original rule filed April 30, 1992; effective July 30, 1992. Amendment filed August 30, 1996; effective December 27, 1996. Amendment filed October 29, 1999; effective February 28, 2000. Amendment filed May 31, 2000; effective September 28, 2000. Amendment filed October 30, 2001; effective February 28, 2002. Amendments filed June 23, 2015; effective September 21, 2015. Amendments filed August 19, 2021; effective 11/17/2021.Authority: T.C.A. §§ 9-4-503, 9-4-504, 9-4-508, 9-4-508(1)(D), and 9-4-508(7).