programsTreasury and Financial Systems

Texas Pooled Collateral Program

Under Texas law, a depository institution must pledge security to collateralize deposits of public funds by a public entity in excess of federal deposit limits. The Pooled Collateral Program allows a depository institution to pool collateral for public entities, and requires the Comptroller to regulate and monitor the Program. Under this Program, the Comptroller ensures that the securities pledged as collateral have a market value greater than the deposits.

Benefits

The Pooled Collateral Program is designed to produce benefits for both depository institutions and local public entities.

Depository institutions will be able to centralize the processing and management of all pledging and maintenance of collateral through the state rather than with each entity. They will be able to better manage fluctuations with an aggregate collateral requirement than with many separate fluctuations among many separate pledge arrangements. They will be able to report to a single state entity instead of multiple entities, as well as report electronically.

Public entities may save time by allowing the Comptroller to manage and, together with the public entity, monitor collateral for their public funds. Under the program, the Comptroller provides daily market pricing of all collateral.

There is no cost to the public entity for participating.

Comptroller's Role

The Pooled Collateral Program was established by the 81st Texas Legislature, Regular Session 2009. Senate Bill 638 amended Chapter 2257, Government Code, by adding Subchapter F as an alternative to collateralization under Subchapter B.

This law requires the Comptroller to establish the Pooled Collateral Program by administrative rule. The Comptroller's rules amend the Texas Administrative Code, Title 34, Part 1, Chapter 4 "Treasury Administration" by adding Subchapter A - Local Pooled Collateral Program.

The Pooled Collateral Program operates as an alternative to the individual collateralization of local public funds. The Comptroller assumes the role of ensuring that all public deposits in the Pooled Collateral Program have a pledge of securities from a depository institution, and that this collateral has a market value greater than the public deposits. In this role, the Comptroller establishes guidelines for program participation, acts as a central repository for reporting and information, enforces penalties as needed, and assesses fees to cover the costs of administering the program.

If you have any questions about, including applying for or entering online reports for, the Pooled Collateral Program, please contact our staff at 800-531-5414, ext. 3-5902 or 5-9761, or you may dial directly at 512-463-5902 or 512-305-9761.

You may also email any questions to: collateral@cpa.texas.gov

Our mailing address is:

Texas Comptroller of Public Accounts
Treasury Operations
Cash and Securities Management Division
208 E. 10th Street, Room 636
Austin, Texas, 78701