(a) A bank may pledge its assets only:
(1) To enable it to act as an agent for the sale of obligations of the United States;
(2) To secure borrowed funds;
(3) To secure the public funds of a governmental entity; and
(4) For other purposes that are approved by the commissioner.
(b) As used in this section, unless the context otherwise requires:
(1) “Governmental entity” means:
(A)
(i) The United States government or any agency thereof; or
(ii) Any instrumentality of the United States the funds of which are required by law to be secured; and
(B) The state of Tennessee or any other state, counties, incorporated municipalities and their political subdivisions or any utility district organized under the laws of a state or an interstate compact; and
(2) “Public funds” means:
(A) Funds in which the entire beneficial interest is owned by a governmental entity; or
(B) Funds held in the name of a public official charged with the duty to receive or administer funds and acting in the person's official capacity.
(c) A financial institution authorized to secure public funds of any governmental entity shall do so in the same manner and under the same conditions as state deposits under title 9, chapter 4, or as provided in a collateral pool as provided in title 9, chapter 4, part 5.
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