The law requires the Treasury Division to have collateral for all State monies on deposit with financial institutions. See M.S. 9.031, Subd. 2, 3, and 4.

Most people are aware that the Federal Deposit Insurance Corporation (FDIC) insures all deposits up to a maximum of $250,000 for each depositor. This insurance is available to the State as well. HOWEVER, the State has much more than $100,000 on deposit at various times during the day. In the event of a bank failure, the Treasury Division must make sure that ALL of the State's deposits are protected.

The Treasury Division requires each depository to post collateral in an amount equal to 110% of the amount on deposit. If a bank fails, the State could seize the collateral in lieu of the amount deposited. The extra 10% is additional protection against a sudden devaluation of the collateral.

Questions about collateral should be directed to:

Joe Howe or Shirley Tigges
Minnesota Management & Budget
4th Floor Centennial Building
658 Cedar Street
St. Paul, MN 55155
651-201-8091