3. Depository of Funds
C.3.01 - Collateralization of Funds:
The System elects, consistent with the Public Funds Collateral Act (Texas Government Code Section 2257) to have depository institutions pledge eligible securities, as defined by the System’s Investment Policy, as collateral for deposits, rather than surety bonds.
All approved securities provided as security will be held by a Federal Reserve Bank or a federally insured financial institution acceptable to the System and the Depository as a third party custodian, subject to a written tri-party agreement.
C.3.02 - Optional Services:
The System may include in the contract for depository services provisions for the depository institution to provide services other than traditional demand deposit services. The System may allow the Depository institution to provide services such as provision of Automatic Teller Machines (ATM’s) on System premises; electronic check conversion services; merchant processing services; provision of declining balance debit cards to augment System programs to expand electronic funds transfers; courier or armored car services; remote check acceptance services, or any other service as deemed appropriate by the System.
LSCS Policy Manual Section adopted by the Board of Trustees on August 7, 2008