SAVINGS AND LOAN ASSOCIATION AND CREDIT UNION ACCOUNTS - 19463

(Revised: 06/2024)

 

Agencies/Departments may be authorized either by statute or by approval from the Department of Finance, Fiscal Systems and Consulting Unit (FSCU), to deposit state moneys with savings and loan associations or credit unions outside the centralized State Treasury System (CTS).

Agencies/Departments that have statutory authority to deposit state moneys with savings and loan associations or credit unions outside the CTS without FSCU approval should adhere to the conditions prescribed by the Director of Finance and shall notify the State Treasurer’s Office (STO) by letter stating:

• The name and location of the savings and loan association or credit union.
• The amount, source, and purpose of the funds to be deposited.
• The type and term of the deposit arrangement. 

Agencies/Departments without such statutory authority shall request approval from FSCU to deposit state money with savings and loan associations or credit unions outside the CTS. For information on submitting requests for approval, see SAM Sections 7040 and 8002.

The Director of Finance prescribes the following conditions for depositing state moneys with savings and loan associations or credit unions outside the CTS authorized by statute or approved by FSCU:

1. Unless otherwise exempted by statute, an agency/department shall have written approval from the FSCU to maintain the savings and loan association or credit union account outside the CTS.
2. Except as otherwise provided by law, no state officer other than the Treasurer shall deposit General Fund money with savings and loan associations or credit unions.
3. Deposits shall not exceed the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA) limit in any one savings and loan association or credit union, including all of its branches. An agency/department may deposit in excess of the FDIC or NCUA limit in any one savings and loan association or credit union if the agency/department notifies the STO that deposit collateral requirements have been met. For information on collateral requirements, see SAM Section 8002.
4. Annually, by August 31, or the following business day if August 31 falls on a weekend, agencies/departments shall submit Report No. 14, Report of Accounts Outside the State Treasury, via FI$Cal. Report No. 14 shall state the balance as of June 30, the purpose and authority for each savings and loan association or credit union account. If the account has been closed during the reporting period, agencies/departments shall specify the date the account was closed. For information on year-end reports, see SAM Sections 7930, 7951, and 7975.
5. Annually, by August 31, or the following business day if August 31 falls on a weekend, agencies/departments shall submit account statements via FI$Cal stating account balances as of June 30, for each account indicating collateralization on Report No. 14.
6. Agencies/Departments shall properly complete a savings and loan association or credit union account signature card before making withdrawals. The same statement shown in SAM Section 8001.3 pertaining to the necessity of two authorized signatures for withdrawals in excess of $15,000 is required.
7. In accordance with Government Code section 16600, agencies/departments shall deposit only with eligible savings and loan associations or credit unions.

Any agency/department that maintains account balances close to the FDIC or NCUA limit will periodically review its savings and loan association or credit union account balances to make certain that the maximum insured amount will not be exceeded when interest earnings are added to the accounts.

Agencies/Departments are responsible for making arrangements with the savings and loan associations or credit unions to allow interest payments to be sent directly to the agency/department when such payments would increase the balance of an account in excess of the maximum insurable amount. Upon approval of FSCU, agencies/departments may deposit these excess amounts in another eligible savings and loan association, credit union, or within the CTS approved depository banks. For information on approved depositories, see SAM Section 8031.

The deposit of state moneys in savings and loan association or credit union accounts should permit the maximum earnings of interest and the ready access to a reasonable amount of cash to meet unusual demands, in addition to cash held in the CTS account to meet ordinary withdrawal demands.

Agencies/Departments should ensure that time or interest-bearing term deposits are held until the expiration of the certificate or certificate of deposit to avoid early withdrawal penalties. Federal regulations require a substantial interest penalty for early withdrawals of principal. Generally, no interest is earned for 90 days immediately preceding the withdrawal, and any applicable interest earnings are calculated at the current rate on regular accounts.