Municipals Pledged to Sweep Accounts

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Question:

Can municipals be pledged to our sweep accounts? If not, what regulation prohibits that? I can’t seem to find a definite answer on what is allowed to be pledged towards these accounts.

Answer:

Any authority your bank may have to pledge securities as collateral for uninsured deposits is a function of state law. Generally, it is only allowed when the deposit is public funds.

First published on BankersOnline.com 11/16/09