§1220. Selection of depositories

A. Local depositing authorities shall, except as otherwise provided in this Chapter, select as the depositories of their funds, financial institutions domiciled or having branch offices located in the parish or municipality or congressional district of the depositing authority, subject to the following conditions:

(1)(a) The depositing authority must allocate its funds to each qualifying bank within the area in the ratio that the total capital, declared surplus and undivided profits allocated to said depositing authority of each qualifying bank, as shown by its statement filed with its application, bears to the total capital, declared surplus, and undivided profits of all banks qualifying as fiscal agents in the area.

(b) Whenever a qualifying bank is a branch office of a bank not domiciled in the jurisdiction of the depositing authority such bank must allocate capital to such branch, which allocation shall be the same as that determined under the provisions of R.S. 47:1968, and thereafter the depositing authority may allocate its funds to the branch bank within the area in the ratio that the capital of the branch bank bears to the total capital of all other banks or branches domiciled within the jurisdiction of the depositing authority.

(c) Whenever a qualifying bank is domiciled in the jurisdiction of the depositing authority and has branches outside the jurisdiction of the depositing authority and has allocated capital to such branches pursuant to R.S. 47:1968 and this Subparagraph, such bank must allocate capital to its offices and branches within the jurisdiction of the depositing authority on the same basis as that provided under R.S. 47:1968, and thereafter the depositing authority may allocate its funds to the bank offices and branches within the jurisdiction of the depositing authority in the ratio that the capital of such bank offices and branches within the jurisdiction bears to the total capital of all other banks or branches domiciled within the jurisdiction of the depositing authority.

(d) The depositing authority may, in its discretion, allocate funds to any qualifying group of banks located in the same city or parish, pursuant to a written agreement entered into by all the members of the group and filed with their application to qualify.

(2) Unless secured with permissible collateral within three days of the deposit, no amount in excess of two hundred percent of the capital stock, declared surplus, and undivided profits of any bank shall be deposited in any one bank by one depositing authority, provided that deposits which are swept from the bank's deposit account at the close of business each day for purchase of securities that qualify as collateral for public deposits shall not be counted in this calculation.

(3) No bank shall be eligible to qualify to receive the deposits of any public funds which has not accompanied its application for the deposit with a sworn statement of its financial condition, as shown by its books, at the close of business in the first day of the month prior to the month in which the application was made.

(4) Repealed by Acts 2013, No. 32, §3.

(5) No bank selected as a depository shall assess depositing authorities, the state, or any department, board, commission, or institution thereof, a fee for credit inquiries, deposit verifications or audit confirmations concerning accounts of the depositing authority.

B. For the purposes of this Section, an electronic funds transfer mechanism shall not be considered a branch office; "branch office," within the context of this Section, shall be defined as a full service branch office.

Amended by Acts 1962, No. 424, §1; Acts 1977, No. 729, §1; Acts 1981, No. 638, §1; Acts 1983, No. 343, §1; Acts 1986, No. 220, §1; Acts 1989, No. 436, §1, eff. June 30, 1989; Acts 1992, No. 587, §2; Acts 1993, No. 509, §2, eff. April 1, 1993; Acts 1994, 3rd Ex. Sess., No. 61, §2, eff. July 6, 1994; Acts 1995, No. 1126, §3, eff. June 29, 1995; Acts 2001, No. 735, §1, eff. June 25, 2001; Acts 2004, No. 620, §1; Acts 2013, No. 32, §3.