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Tennessee's Bank Collateral Pool was authorized by the General Assembly in 1990 to allow banks and local governments statewide to participate in a pool designed to provide greater efficiency and a lower risk when collateralizing public funds.

Important Message: Response from Treasurer Lillard Concerning the Impact of the Recent US Credit Downgrade on the Collateral Program
(August 9, 2011)

Tennessee Code Annotated 9-4-103 lists the acceptable collateral to secure all public deposits in Tennessee.  The recent action taken by Standard and Poor’s to downgrade the credit rating of the United States and certain government agencies from AAA to AA+ does not have any impact on the securities that are acceptable collateral. more...

 

 

 

  • What pledge level percentage will I be required to use?
  • Are there any fees associated with the Collateral Pool?
  • Will I be responsible for any reporting to the Collateral Pool?
  • How do I pledge and release securities?
  • How do I know if I am over-pledged or under-pledged?
  • How do I know what security is pledged as collateral to an individual depositor?

  • What pledge level percentage will I be required to use?
    The collateral pool utilizes three levels: 90%, 100% and 115%. The 90% level is reserved for those banks that exceed the stringent benchmarks set by the collateral pool board. The 100% level is reserved for those banks that exceed benchmarks set by the collateral pool board, but are not as stringent as the 90% benchmarks. The 115% pledge level is usually reserved for banks that have been in operation for less than three years, but also for banks that are having trouble meeting the benchmarks set by the board. For more details, click here.

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    Are there any fees associated with the Collateral Pool?
    There are no fees for a bank to join or operate in the collateral pool.

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    Will I be responsible for any reporting to the Collateral Pool?
    Yes. Banks are required to submit two reports. One is a monthly depository report that is to be submitted by the 15th of each month. The other report is the Annual Management Certification and Annual Certification for Independent Auditors. This report is due every year by March 31. A quarterly report is no longer required, but be aware that the Treasurer has the discretion to ask the banks to begin submitting it once again. Click here to find all the reporting requirements and information.

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    How do I pledge and release securities?
    When you want to pledge or release a security pledged to the collateral pool, email a pledge or release form for each applicable security to an employee in the Cash Management division of the Treasury Department. The form can be located on this page's top menu bar under the 'Forms' link. After the form has been received via email, the Cash Management employee will then notify your trustee custodian to either pledge or release a security per your instructions.

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    How do I know if I am over-pledged or under-pledged?
    This is the responsibility of Cash Management. We monitor your collateral position on a daily basis and will notify you of any deficiencies in collateral. If you believe you are over-pledged, call us, and we will be happy to check your position.

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    How do I know what security is pledged as collateral to an individual depositor?
    This is impossible to know. By operating in the Collateral Pool, you will aggregate your deposits and report one figure for the bank on a monthly basis. Collateral is then pledged against that figure until you report again the following month. As long as collateral exceeds this monthly target, the bank and individual depositor can be assured that all deposits are secured.

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