90-6

April 24, 1990

Re: Sale of Securities With Agreement to Repurchase

Dear M ________:

This is in reply to your letter of March 5, l990 requesting a written response.

This is to confirm my oral advice to you of March 28, 1990 that securities sold by a state bank with an agreement to repurchase such securities by such bank constitutes a borrowing by the selling state bank which is subject to Financial Code Section 1202.

In your case, ________ proposes to sell securities to ________ under an agreement to repurchase. Based on the facts set forth in your letter of March 5, 1990, such a sale of securities under an agreement to repurchase would be regarded as a borrowing by the selling bank which is subject to Financial Code Section 1202.

Please contact us if you have any further questions.

Very truly yours,

JAMES E. GILLERAN
Superintendent of Banks

By

DIANA H. NISHIURA
Counsel

DHN:ma

cc: State Banking Department, San Francisco