CDARs Deposit Reporting Instructions
GC 53635 (CDARS Program) was enacted into law in 2005. Under GC Sections 53661(e) and 53663(b), every depository is required to file reports of local agency deposits held by such depository. Since most of the CDARS funds are local agency deposits, depositories are required to report such deposits to the Administrator of Local Agency Security Program unless the depository can demonstrate that such funds are not local agency deposits.
The purpose of the CDARS Program is to spread the deposit to various depositories, each have an amount under the FDIC insured amount. Thus, all the funds under the CDARS Program are covered by FDIC Insurance pursuant to this CDARS Program. However, even though part of the local agency deposits is FDIC insured, the depository is required to pledge collateral on all local agency deposits unless the treasurer of local agency waives security for the portion of any deposits as is insured pursuant to federal law. Therefore, the depository that accepts the local agency funds must have a waiver if it does not wish to pledge collateral on the FDIC insured portion. A waiver is not required on deposits received by a depository through the CDARS program.