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Treasurer advises leaving pledged securities in place despite bank’s release request
Summary
The county treasurer told commissioners Independence Bank asked to release pledged securities that currently secure county deposits; the treasurer recommended leaving pledges in place because county balances fluctuate seasonally and the bank must obtain signatures to release the securities.
Daniels County’s treasurer briefed commissioners at the Feb. 17 meeting about a request from Independence Bank to release pledged securities that currently act as collateral for county deposits exceeding FDIC insurance limits.
The treasurer said the bank proposed releasing roughly $2.74 million in pledged instruments, which would leave a smaller pool of securities to cover county balances. A bank representative told the treasurer it can add pledged instruments automatically if the county balance later rises, but it cannot release pledged securities without the county’s signature. The treasurer said she was not comfortable signing a release because county deposits routinely fluctuate seasonally (the transcript cites multi-million-dollar swings when taxes are collected) and recommended leaving the pledges in place.
Commissioners agreed that leaving the securities as they are is reasonable; no signature was provided to release collateral during the meeting. The treasurer said she would retain the bank paperwork and warned commissioners that if deposits spike above current pledged levels in the near term, the bank will add pledged instruments to cover insured limits automatically.
