Answers to commonly asked questions about the protection of public funds on deposit

Who are the members of the Public Deposit Protection Commission?

Governor, Lieutenant Governor, and the State Treasurer as Chair

Where do I find the Laws, Rules, and PDPC Resolutions?
What is a public depositary?

“Public depositary” means a financial institution that has been approved by the commission to hold public deposits, and has segregated, for the benefit of the commission, eligible collateral having a value of not less than its maximum liability RCW 39.58.010(15). 

What is a public deposit?

“Public deposit” means public funds on deposit with a public depositary (RCW 39.58.010).

What are public funds?

“Public funds” means moneys under the control of a treasurer, the state treasurer, or custodian belonging to, or held for the benefit of, the state or any of its political subdivisions, public corporations, municipal corporations, agencies, courts, boards, commissions, or committees, including moneys held as trustee, agent, or bailee belonging to, or held for the benefit of, the state or any of its political subdivisions, public corporations, municipal corporations, agencies, courts, boards, commissions, or committees (RCW 39.58.010).

Where can I find a list of approved public depositaries?

Click for a listing of all approved public depositaries and links to their web pages

Where can I find the acceptable types of collateral a financial institution can pledge?

“Eligible collateral” means the securities or letters of credit enumerated in RCW 39.58.050 (5), (6) and (7). Additional types of collateral determined to be eligible by rule or resolutions can be located under Laws, Rules, and PDPC Resolutions.

What are the collateralization requirements?
  • 100% of the greater of your Maximum Liability or WA Public Deposits Uninsured balance.
  • Well Capitalized–greater of either maximum liability or 50% of WA Public Deposits Uninsured [this option increases your maximum liability from 10% to 25%].
  • 100% on excess deposits above deposit limitations.
Where can I locate deposit balances and Washington proportional net worth of public depositaries?

PDPC provides a report online listing public deposit balances and WA proportional net worth balances.

What are the deposit limitations?
  • 100% of WA Proportional Net Worth limit if single Public Depositor.
  • 150% of WA Proportional Net Worth limit if multiple Public Depositors, and not to exceed 30% of Total Public Deposits unless 100% collateralized on excess.
What are the requirements to become a depositary?

Any financial institution may become, and thereafter operate as, a public depositary upon approval by the commission and segregation of collateral in the manner as set forth in this chapter, and subject to compliance with all rules and policies adopted by the commission. A public depositary shall at all times pledge and segregate eligible collateral in an amount established by the commission by rule or noticed resolution. “Financial institution” means any national or state chartered commercial bank or trust company, savings bank, savings association, or federal or state chartered credit union, or branch or branches thereof, located in this state and lawfully engaged in business. See chapter 39.58 RCW, chapter 389-12 WAC, and PDPC resolutions for requirements.

What is the process to become a qualified public depositary?
  • Submit an application letter with certificates of authority.
  • Provide proof of meeting meetings of the directors or loan committees approval to enter into a depositary pledge agreement if your financial institution is planning on pledging securities as collateral.
  • Review of your application and financial information.
  • Approval status is authorized by the Chair under delegation of authority granted by resolution.
How often are public depositaries required to report to PDPC?

Monthly and quarterly reporting requirements as defined in chapter 39.58 RCW and chapter 389-12 WAC

Does PDPC authorize demand accounts for public funds in institutions located outside the state?

The commission, or the chair upon delegation by the commission, upon good cause shown, may authorize, for such time and upon such terms and conditions as the commission or chair deem appropriate, a treasurer to maintain a demand deposit account with a banking institution located outside the state of Washington learn more:

Does a release or reduction of collateral require approval?

Collateral is valued at market value and the market value of pledged collateral shall not be reduced by withdrawal or substitution except by prior authorization, in writing, by the commission as per Chapter 39.58 RCW and chapter 389-12 WAC.

Can collateral be pledged without a depositary pledge agreement (DPA)?

Yes, the commission may accept as collateral a letter of credit from a federal home loan bank or a federal reserve bank on behalf of a public depositary, naming the commission as beneficiary. Such letters are not subject to a completed depositary pledge agreement. As such, the commission must act as the safekeeping agent for letters of credit. All securities pledged as collateral required a fully executed tri-party DPA.

What is a trustee?

“Trustee” means a third‐party safekeeping agent which has completed a depositary pledge agreement with a public depositary and the commission. Such third‐party safekeeping agent may be a federal home loan bank, or such other third‐party safekeeping agent approved by the commission. Contact PDPC administrator for more details.