Rep. Stanley asks Joint Committee on Financial Services to issue favorable action on his bill providing for the security of public deposits

Rep. Stanley testified on behalf of legislation he filed (House Bill 1113) to establish a framework for qualifying public depositories in addition to instituting rules for determining the collateral for public deposits. Massachusetts is one of several states that do not require banks holding public deposits from cities, towns and districts to secure them with acceptable capital. Local municipalities need security and safety of public funds and deposits.

The safety of public funds should be the foremost objective in public fund management. Collateralization of public deposits through the pledging of appropriate securities and surety of bond by depositories is an important safeguard for such deposits. Programs in other states pertaining to the collaterization of public deposits have generally proven to be beneficial for both the public sector and its depositories.