74-6

74-6

November 19, 1974

Dear Mr. ________:

This is in reply to your inquiry regarding Financial Code Section 1562.

Financial Code Section 1562 provides, in part, that whenever a commercial bank, acting as trustee, deposits with itself trust funds awaiting investment or distribution, such commercial bank shall pledge, as security for such deposit, securities eligible for investment by savings banks having a market value not less than the amount of trust funds deposited. In our view, this provision of Section 1562, which requires the securing of a deposit of trust funds, applies only to a deposit of trust funds awaiting investment or distribution and does not apply to a deposit of trust funds in an interest-bearing account as an investment.

If yon have any questions regarding our opinion in this matter, please feel free to contact us.

Very truly yours,

DONALD E. PEARSON
Superintendent of Banks
By

JAMES F. CARRIG
Counsel
JFC:ap

cc: State Banking Department, LA

bcc: Opinion File