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R.S. 39:1224 requires the bonds, or other such instruments furnished as security, to be deposited with the depositing authority or with an unaffiliated bank or trust company or Federal Reserve Bank or any Federal Home Loan Bank or its successor. This security is deemed to be under the control and in the possession of the depositing authority (the public entity) and deemed to be held in its name. They do not have to be actually in their name. Therefore, the deposits are properly collateralized.
Please see LLA’s Banking Law FAQ which can be found on the Legal Assistance & FAQs Overview page of the LLA Website.
Louisiana Legislative Auditor website: 06/02/2025 09:36:04 AM
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