Qualification and Fiduciary Powers: Deposits of Securities

(a)It shall be a criminal offense against this Title for a bank to act as fiduciary unless it is authorized by its charter to exercise trust powers and has qualified by depositing with the Commissioner evidences of indebtedness acceptable to him which:

(1)Are payable to bearer or recorded in the Commissioner’s name;

(2)Constitute readily marketable legal investments for funds held by a bank as a fiduciary; and

(3)Have a value equal to ten percent (10%) of the minimum capital and surplus requirements set forth in § 106204 of this Act.

(b)A bank shall have the right to receive the income on evidences of the indebtedness deposited with the Commissioner as long as the bank continues to conduct its business in the ordinary course.

(c)A bank which fails to maintain its deposit in conformity with this section shall, upon order of the Commissioner, resign its fiduciary positions.

(d)Upon liquidation, abandonment of trust powers, or resignation from all fiduciary positions, the deposit shall be made available for the ratable satisfaction of claims involving fiduciary accounts. Any surplus remaining after the satisfaction of all such claims shall be returned to the bank.